Lawmakers Ask Biden and the Justice Department to Act on Lumber

Filed in Advocacy, Material Costs by on March 5, 2021 33 Comments

Reps. Jim Costa (D-Calif.) and Jodey Arrington (R-Texas) sent a letter to President Biden and the Department of Justice on March 4 urging the administration to respond to rising building materials prices and supply shortages, particularly, lumber, that are harming the housing market and threaten the economic recovery.

Using data provided by NAHB, the lawmakers stated that “shortages of lumber have nearly tripled the price of lumber since mid-April 2020, causing the price of a new single-family home to increase by more than $24,000.”

NAHB’s top priority is to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price. NAHB is urging the Commerce Department to investigate why lumber production — particularly sawmill output — remains at such low levels during a period of prolonged high demand.

Reps. Costa and Arrington mirrored our concerns and stressed the need to boost sawmill activity in their letter to Biden and the Department of Justice. “Unfortunately, this unprecedented price increase on new homeowners, as well as home builders, will persist until new sawmills come online and current mills re-open and operate at full capacity,” the letter stated. “To address this issue, we ask your Administration to facilitate a discussion with all stakeholders, including sawmills, home builders, loggers, and distributors, to ensure all needs are met in a timely manner.”

The two lawmakers also attached a letter sent last fall to President Trump that was signed by nearly 100 members of the 116th Congress seeking action on the lumber issue.

For more information, contact Alex Strong.

 

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  1. What would they like the president of the United States to do? This is a market issue. We do not live in a socialist, centralist government. Why not have the president respond to rising gasoline prices? Why not have the president respond to high home prices and builder’s charging too much for new homes?

    • DJ Smith says:

      I’m not saying you’re wrong in some instances but there are some of us who try to be as fair as possible. In fact, when my buyers typically sell their homes after only living there a short period, they typically make good money upon selling. I’m not sure what the answer is but if it keeps trending in this direction, we are going to see a repeat of 2008.

    • Rick Koze says:

      True capitalism would mean no tariffs on Canadian lumber imports. Protecting mills who can’t operate efficiently sounds a lot less like capitalism to me. Protecting the few at the expense of many is bad business. Unlike China, Canada is our friend. Oh yes I almost forgot we have this other thing in our country called anti-trust. Clear price collusion and supply control going on here.

    • David says:

      You say this is a market issue yet you want the president to do something about high home prices and what builders charge. As a builder, the same house I built 3 years ago now cost me 35% more to build do to material, labor and lot price increases. Would you be surprised to know that the builders average net profit is around 9.7% .

    • C Frame says:

      Somebody should look into it… I own forrest land here in Idaho and I am a builder. The loggers I know and talk to tell me the lumber yards are full. Plenty of logs… sawmills are FULL of logs… just not being processed in normal times. Everyone is scratching their heads. Raw log/delivery prices have NOT gone up.. the loggers could deliver more… so the literal log jam seems to be happening at the mills. And that is all over from what I hear. Collusion? Happy this is not a socialist country… but free market does need some oversight and transparency. Glad there is going to be some prodding into why something has tripled in price without any real reason. Demand is high… supply is plentiful… why the log jam?

      • jean says:

        That’s sad. I have a project that we started the process last year – the supplies have gone up 20k in the last 6 months. If people keep paying, there’s no incentive. I suppose the extra cash that 85% of the population got helped a little.

    • Jordyn says:

      I build in the Mid Atlantic and I’m a small 3-4 custom homes per year builder. I charge cost plus – very straightforward, it’s the cost to build the house and my builder fee to general contract. I’m to a point where I can’t build it at a profit for myself. Appraisers are starting to appraise lower than what the market would dictate because they very simply don’t understand the cost of building right now. My last two deals fell apart because banks and appraisers are saying the market is ‘artificially high’ – I frankly don’t know what to do. Not operating is not an option so I’m moving towards spec builds almost exclusively because I can’t manage customers expectations. Just my thoughts.

    • Donald Meltzer says:

      The US does have anti-gouging laws, onces that have been brought to the forefront on more than one occasion, including during the current pandemic. From what is decribed by at least one author below, the mills should be reminded that gouging is not considered an acceptable practice,and what the consequences of gouging are.

  2. Richard White says:

    Dear President Biden,
    Please open up the Wall to all lumber mills.
    Allow everyone who wants a chance at freedom, jobs, healthcare and schools to flood in. Allow all workers Desirous of employment to take off their masks and work freely outside without the tyranny of Government over-regulation.
    But then, who is listening?
    Rick

  3. Jeff Girard says:

    A good start would be to remove the duties on Canadian imports

    • Kim Reierson-Kelsh says:

      finally an intelligent response

    • Mark Edy says:

      I am total agreement. There have been duties on Canadian lumber too long. The US cannot supply enough to cover our own needs and yet we have placed duties on the Canadian products, much of which we cannot produce ourselves. The duty originally was an issue brought about by Southern Yellow Pine producers many years ago. They complained that they couldn’t compete with the Canadian products despite the fact that the yellow pine manufacturers had both the cheapest labor pool in the country as well as the lowest log prices. Beyond that, the transportation costs of Canadian lumber to markets in which they competed was significantly greater.

      • Jeff Girard says:

        Yup, the good old boys keep filling their pockets at the expense of the US consumer. What else is new? I’ ll tell you what; the big Canadian mills are buying the older inefficient US mills, investing in new equipment and taking advantage of the cheap over supplied log situation in the South and printing $$$$

      • Neil Lotvedt says:

        This is the best comment I have heard, thank you and pass this on.

  4. Red says:

    The government has already contributed to the increase in prices. Work from home, no vacation spending, stimulus payouts… there ya go.

  5. Britt says:

    As long as the government is paying people to stay home, there is no incentive for those same people to work. All of us in the construction industry have trouble finding help. Therefore less work is getting done but the need for housing keeps increasing. Therefore supply and demand causes material costs to rise.

  6. Howard says:

    Keep adding increases to unemployment insurance and workers will stay home. Three hundred ($300.00) dollars a week in extra unemployment benefits will prevent laid off workers from returning. In may parts of the Country that extra money is an incentive to stay off. No workers and the mills can’t get back to full capacity.

    • Greg says:

      At the same time, some of these workers must stay home to care for their children if schools are closed. The need to now have to pay for childcare outweighs the benefit of working. Many workers would lose money in this situation, therefore they choose to stay home with their kids and collect unemployment. Reopen the schools. People can get back to work.

  7. Zach says:

    It takes about $400 million and 3 years to build a new OSB mill (add another 2 years for the planning phase), and about a year to restart a mothballed one. Mills are already at capacity everywhere and can not keep up with demand. This information about getting mills to produce more is false and these reps do not know how supply chain works.

    • Phillip says:

      Good point Zach, people think the mills are holding back. That is not true, why would mills intentionally reduce capacity when there is so much money to be made.

      Lumber shortage is not just a US problem it is a global problem. Most commodities around the world are moving up in price and lumber is just one of them. Unfortunately COVID restrictions around the world have reduced capacity at the same time housing demand is spiking.

      Don’t blame the mills they want to make money too.

      • Phillip your suggest mills are the victim?
        Not ok to 3x and 4x prices. Demand has not risen above production with exception of deck boards. Store shelves have not gone empty. The only reason prices have gone up is a short term leverage on the very statement above about mill cost and build time.

  8. Doug says:

    Removal of the duties on Canadian lumber imports would be a great help. And the President can certainly help with that.

  9. Devika Maharaj says:

    I am pleased to see that others also understand that removal of the duties on Canadian lumber imports would be a good start. On a domestic note, we did not feel the impact of the pandemic in the lumber world right away so don’t expect it to be remedied or brought back to capacity right away. Coming from a small sawmill background I have seen how the pandemic affected our mill and can understand how that would translate in larger mills. We will recover and be back at capacity in time.

  10. The duty on Canadian lumber must be eliminated immediately. Builders want fir that will not cause framing problems, Yellow pine is so plentiful those clearing land have to pay to haul it off. The mills won’t take it because the Cartel that produces it have their own yellow pine timberlands and are feasting on these shortage profits. We are turning to six story with pre fab steel framing sections for six story apartments. Builders will use yellow pine if it is priced as it was. We simply need to get the government to create financing for new mills that will compete with the Cartels. There are plenty of qualified producers that will be motivated to compete. Enough of these and these and prices will drop dramatically. There is not enough fir to cut unless more federal forests are available for selected cutting.

  11. Mike says:

    ICF are a great alternative to wood construction. Wood will always be needed but ICF drastically reduces the demand on wood and can provide outstanding insulation and sound control. http://www.enerGblock.com

  12. John says:

    The money supply has been greatly expanded. Prices on every thing is going up dramatically. High inflation is here. Business news is just not talking about it. Copper wire has more than doubled in cost the last 12 months.

  13. A L says:

    Tariffs are terrible for any market. Consumers pay more is the end result. Remove tariffs on wood products produced in Canada and China and then we all will see the true market value play out. Not only does it costs more to build my home but also to furnish the home. Please remove all tariffs/duties for all wood products coming into the country.

  14. Jared Mayfield says:

    Stumpage is bringing no more value than it was 5 years ago. Cost too mills hasn’t gone up. Yet, when the product leaves the mills, it’s value is up over 100%? Explain how this is not manipulated pricing. Drop the draconian staffing restrictions, let them put a full labor force back to work, then reevaluate. If prices do not subside then you definitely have a gouging issue. Gasoline prices follow the base product, which is crude oil. This should be the same with lumber, but is not. Middle man manipulation

  15. Don Long says:

    Lumber shortages are going through the roof. We need help opening more lumber mills. The price increases are going to kill the housing market

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