Rory Murphy is working to finish the Engine House affordable housing project under construction on Homestake Road in the Bonanza Park neighborhood.
Murphy said he hopes Engine House will be operating in September. But he has paused any future projects amid market instability after the Trump administration’s new tariffs.
“I can tell you that everyone is pulling back right now,” Murphy said. “You’re stupid to dive into this and expect it to normalize itself.”
Murphy said he’s fortunate that all materials for the Engine House project have already been purchased. Going forward, he said the prospect of additional tariffs on Canadian lumber could have a major impact on development costs.
“I don’t think there’s a question. You’re going to see an increase in materials costs, particularly in the short-term,” he said. “Your demand is going to spike, because you have these commercial home builders that must have this continual supply of lumber. So what are they going to do? They’re going to stockpile it.”
However, he said Utah builders may not feel the pinch as much as other parts of the country.
“We get a lot of our lumber from the northwest United States,” Murphy said. “The central U.S. is going to get hammered, because they get almost all their lumber from Canada.”
Another factor in future construction is Pres. Trump’s increased focus on immigration and deportation.
“The construction industry depends heavily on immigrant labor,” Murphy said. “I’m not going to get into who’s illegal, who’s not, who has a work visa, who doesn’t. The fact is, we do. I would say 40% of the people that have worked for me over the past 32 years, 40% to 50%, are immigrant labor.”
Similar to the lumber market, reductions in the labor pool will increase building costs.
Murphy said price increases are often passed to the consumer, creating more obstacles to increase affordable housing.
“It’s not going to happen, not without being heavily subsidized,” he said. “You can’t make it work.”
Murphy said he will consider future projects when the market stabilizes.
