Lumber Tariffs Remain a Barrier to Affordable Housing
Stating that unwarranted lumber tariffs needlessly harm housing affordability and impose a hidden tax on American home buyers, the nation’s home builders last week called on the Administration and Congress to adopt and follow free trade policies and to fully consider the impact of lumber trade constraints on American consumers.
The cost and supply of lumber is the third biggest challenge for association members, according to the most recent Critical Issues survey conducted by NAHB, covering the period of October 2004 through December 2005.
In testimony on behalf of NAHB on Feb. 14, Barry Rutenberg, president of Gainesville, Fla-based Barry Rutenberg Homes and a member of the NAHB Executive Board and NAHB Board of Directors, told the Senate Trade, Tourism and Economic Development Subcommittee that trade restraints impose an unreasonable burden on U.S. home buyers and on the industries that depend on adequate, affordable supplies of lumber to provide the housing, home improvements and other vital goods and services the nation needs.
Rutenberg said that lumber trade barriers “boost housing costs, prevent scores of families from qualifying for a mortgage, increase inflation and place U.S. manufacturers of value-added wood products at a competitive disadvantage.”
Duties on Canadian softwood lumber imported into the U.S. are currently being collected at a rate of approximately 10%, down from a recent high of 27%. However, unanimous verdicts by several North American Free Trade Agreement (NAFTA) panels have found no threat of injury from Canadian imports, which is the legal justification required for the duties to be imposed.
Rutenberg called on the Administration to adhere to its legal obligations and follow decisions that have invalidated the lumber duties and stipulated that the U.S. Customs Service must refund the billions of dollars collected from Canada.
“The fact is,” he said, “more U.S. jobs depend on lumber than produce lumber. Housing and related industries that use softwood lumber employ more than 5 million American workers. Overall, American workers in lumber-dependent jobs outnumber workers in lumber-producing industries by more than 25-to-1.”
Restrictions on Canadian softwood lumber do little or nothing to increase the use of U.S.-produced lumber in home construction because the vast majority of the domestic timber supply is unsuitable for framing walls in homes, Rutenberg told lawmakers. Further elaborating, he said that Canada’s spruce and white pine is a different species that is far better suited for wall framing because it is less likely to bend, crack or warp.
“I would not use Southern Yellow Pine (SYP) for framing walls in the homes I build, even it costs half as much as Canadian Spruce Pine Fir,” said Rutenberg. “SYP, the variety found in the Southeast, is better suited for use as floor joists, rafters or truss components. As a home builder, I can tell you that different types of lumber for house framing are not interchangeable, and one wood product cannot be substituted for another without significantly harming the quality for U.S. consumers.”
Because there are not enough trees available in the U.S. to produce the lumber needed for home building, Canadian lumber imports are absolutely vital for the construction of affordable new homes and to make improvements on existing homes in America, he said.
“Therefore, current lumber duties, and any potential negotiated settlement that would result in quotas, tariffs or an export tax, would do nothing to increase the use of U.S. lumber in home construction,” said Rutenberg. “Lumber trade restraints only serve to penalize and tax American home buyers and consumers. U.S. policy with regard to this issue should reflect the interests of consumers and the overall economy, not the special interests of the domestic lumber lobby.”
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.