Cory Singer, co-owner of the homebuilding firm Dolan Design & Build, raced to start construction as quickly as possible in the wake of the Los Angeles wildfires. He was determined to stay ahead of the demand surge he saw coming and eager to help his clients begin to rebuild their lives.

The firm broke ground in the Pacific Palisades on Saturday – one of the first companies to do so.

But by that time, Singer had a new crisis to contend with: tariffs.

Singer, whose firm is currently working on 10 homes in the Palisades, is in talks with clients to place shipping containers on their burned lots and store construction materials there, allowing him to order and stockpile materials in bulk before tariff price increases hit the market.

“I’m definitely nervous,” he said.

The Trump administration announced, walked back and continually modified tariff policies in recent weeks, throwing the global stock market into chaos. The tariffs are widely expected to substantially increase construction costs in California and across the country.

Singer is already dealing with tariff-related price hikes. One of his tile vendors placed a tariff surcharge on an order on 2 April, the same day the Trump administration announced sweeping tariffs, even though the materials had already been imported. Singer is especially worried about materials like plumbing, tiles and fixtures, which are often imported from China, and he is advising clients to factor in a 10% contingency to their budgets in anticipation of the costs.

“If you don’t spend it, great,” he said, “but at least mentally prepare.”

Three months after the worst wildfires in Los Angeles’s recent history flattened miles of city blocks and killed 30 people, signs of life are emerging. Insurance payouts have begun arriving. Contractors have plastered streets in Altadena and the Palisades with flyers and signs advertising their services. The army corps of engineers is slowly clearing and flattening lots, replacing the charred and toxic mess of cars, washing machines and chimneys with the blank canvases of empty lots.

View image in fullscreen Barbara Shay (left), owner of Little Red Hen Coffee Shop, and her daughter, Annisa Faquir, in front of the ruins of their business after it was destroyed by the Eaton fire, in Altadena, California, on 28 March. Photograph: Jae C Hong/AP

But homeowners, contractors, architects and developers across fire-ravaged Los Angeles are girding themselves for the tariffs. For homeowners seeking to rebuild, the tariffs add a new layer of stress to the uncertainties of navigating insurance, mortgages, short-term housing and piecing together plans for the future.

The Trump administration is currently levying a 10% tariff on most countries, a 25% tariff on steel, aluminum and cars and car parts, and a 125% tariff on Chinese goods. The administration on Wednesday retreated on further planned global hikes after news of the tariffs prompted trillions in stock market losses worldwide, but Angelenos remain uncertain about what this means for their homes and plans.

In Altadena, a middle-class neighborhood with fewer resources than the wealthy Palisades, the strain is especially acute. Homeowners worry tariffs will hinder their ability to afford rebuilding and exacerbate already widespread issues with underinsurance.

“It’s really scary,” said Ken Yapkowitz, a longtime Altadena resident who lost his home and two rental income properties in the Eaton fire.

Yapkowitz is waiting to see what his final insurance payouts will be and starting to map out how to rebuild his properties. He had already been factoring in a 25% bump in materials costs before the tariffs were announced, he said, and figured there would be a surge in demand for materials and labor. He expects tariffs to add substantial costs, and wonders if he will be able to rebuild on his lots as planned.

Jose Flores, the owner of JV Builders & Development, a small business in Pasadena, said many of his Altadena clients want to rebuild. But he worries that tariffs, paired with a painfully slow permitting process and other soaring costs, will cause them to change their minds. He has three clients in the process of drawing up plans with architects, but many others have called him for estimates only to disappear.

“By the time people are ready to start construction, I believe the prices are going to be higher,” he said. Flores has noticed the prices of lumber, copper and roofing tick up in recent months. But he can’t afford to stockpile materials, he said, and has no place to store them even if he could. He has no choice but to wait and see what happens.

“I think that’s the case for most of us contractors in the area,” Flores said.

Following the tariffs’ announcement, the California governor, Gavin Newsom, asked his administration to pursue independent trade relationships with other countries and to explore ways to protect access to construction materials in the wake of the California wildfires. But he did not specify what measures the state could deploy to do that.

Flores, the contractor, said he doubted that the governor’s office could actually rein in prices.

Newsom’s office did not respond to a request for comment.

‘We just don’t know right now’

Some residents and business owners are already seeing the tariffs affect wildfire response. Brett Taylor, an Altadena resident who owns a local window and door supplier and who lost his home in the Eaton fire, said his suppliers mostly manufacture domestically, but that many of them source parts from abroad. In late March, he contacted approximately 10 window vendors to ask whether they would be open to providing package discounts to fire victims. Almost all of them said yes.

But before the deals could be finalized, the administration announced tariffs. At least one of Taylor’s vendors walked back their commitment, citing price uncertainty, and Taylor anticipates others will do the same in coming days.

View image in fullscreen Chris Larson surveys the ruins of his business, the Rancho Bar, destroyed by the Eaton fire, in Altadena on 9 January. Photograph: Zoe Meyers/AFP/Getty Images

Others are tapping personal connections and devising makeshift plans to try to defray costs. James Peddie, an Altadena realtor who lost his home, has been helping develop plans for a group of homeowners hoping to rebuild collectively. He knows from his years in construction that a substantial portion of southern California’s lumber is imported from Canada, and when tariffs were announced, he understood that meant increased costs.

Peddie went to high school in Montana, and has friends in the lumber industry there. He also knows a builder who personally went to Oregon to source lumber when prices soared during the rebuilding of Paradise, California, after the devastating 2018 Camp fire.

So he called up his high school friends with a question: can you help me source lumber for LA?

They were eager to help. They promised to keep their commissions low and to keep him updated on price fluctuations. “They’re people I can trust,” he said. “We can probably get the lumber for a really good deal.”

This shift – from purchasing overseas to domestically – is exactly what the administration hopes the tariffs will prompt.

But with the rebuilding process still in its earliest phases, and plans and permits far from finalized and approved, it felt premature to put a deposit down and commit to the lumber, Peddie said. Doing so would mean needing to find and pay for long-term storage, as well as betting that the cost of lumber was only going to increase.

“Where is it going to be stored? Is it going to be more expensive to ship it in?” he said. “We just don’t know right now.”

He estimated it would be seven months before he would be ready to order. It is anyone’s guess what the tariff landscape – and market – would look like by then.

Homes smolder as an apartment fire rages in the background during the Eaton fire on Jan. 8 in Altadena.

Devastating, often tragic as the Los Angeles-area fires have been, rebuilding could bring nightmares all its own, including murky insurance rules, material shortages and potentially higher costs for such items as lumber and bathtubs.

In terms of economic upheaval, it could be the construction industry equivalent of what the COVID-19 pandemic did to the economy just a few years ago.

The Trump administration’s plans to slap new tariffs on imports from many countries including Canada — by far the biggest foreign supplier of lumber for the U.S. market — could set off a new wave of inflation in home building.

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Lumber is the single biggest component of home-building materials, accounting for about 15% of overall home construction costs. Southern California builders use wood for framing homes that’s sourced mostly from Canada and the Pacific Northwest.

And the last couple of years have left the lumber industry ill-prepared for a big surge in demand. More than a dozen sawmills have closed in Canada and Oregon, Washington and Northern California as logging operations have struggled with a shortage of skilled labor and higher costs for energy, freight and other inputs.

Additionally, prices of lumber and other building materials slumped after a renovation project surge and the pandemic eased; the lower prices left many suppliers in shaky financial condition.

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The L.A.-area fires have destroyed or damaged more than 14,000 structures. Many of the properties affected are single-family homes, causing severe problems for displaced people in a region that was already struggling with a shortage of houses and apartments — and the labor to build them.

Based on a rough estimate of 10,000 homes that may need to be rebuilt, that would be about double the number of new homes built annually in L.A. County in recent years.

“Adding a bunch of demand that’s unexpected and very pressing is very challenging for this market,” said Scott Wild, senior vice president at John Burns Research & Consulting in Irvine.

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Just how soon large-scale rebuilding begins will depend heavily on insurance settlements — though some homeowners aren’t covered or are underinsured — and how long it will take to clear debris, restore utilities and get permits. State and local leaders have ordered a streamlining of environmental reviews, permitting processes and other efforts to speed up the cleanup and other tasks to begin rebuilding.

In addition, coordinated efforts may be needed to help free up supplies and keep a lid on prices, some industry executives say.

“People whose homes burnt down — they’re rebuilding their lives,” said Scott Laurie, chief executive at Olson Co., which builds homes in L.A. and Orange counties. “I would hope there’s a mechanism to control the costs. It absolutely needs to be done.”

Because most of the people affected are individual homeowners, the demand for construction may not pile up all at once, but instead be staggered over multiple months.

That will help ease the pressures.

Still, rebuilding 10,000 homes in the region would require, at minimum, an additional 5,000-plus truckloads of lumber, according to estimates by Kyle Little, chief operating officer at Sherwood Lumber, a national supplier that has significant business in California. Little said he sees a “tremendous increase” in demand for the varieties of Douglas fir wood that are typically used for home building in California.

“I do believe the volatility could be reminiscent of what we experienced in COVID,” said Little, who’s chair of the North American Wholesale Lumber Assn.

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More domestic lumber has been produced in recent years in the Carolinas and the South, but Southern yellow pine is not considered as structurally sound for framing as Douglas and varieties of spruce and other pine trees logged in Canada and the Pacific Northwest.

Little and other experts estimate that lumber prices could jump 25% to 40%. And that’s even before any additional tariff increases. In the last six months, average lumber prices have ranged from $475 to $625 per thousand board feet, about one-third of the peak in 2021.

Donald Trump has threatened to add 25% tariffs on goods from Mexico and Canada. Duties on lumber from Canada had risen to 14.4% in the summer last year after the expiration of a U.S.-Canada agreement on softwood lumber.

And a review of anti-dumping could further double the duties this year. If Trump tacks on 25% tariffs on top of that, import levies on Canadian lumber overall could top 50%.

The U.S. consumes roughly 50 billion board feet of wood a year, most of that for new residential construction. About 30% of that is imported, the vast majority from Canada, said Jesse Wade, an economist at the National Assn. of Home Builders.

Europe’s share of lumber imports has increased in recent years, but Trump has talked about applying 10% to 20% tariffs on goods from all countries. The construction industry also imports cement from Canada and Mexico for concrete used in homebuilding.

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Frank Addiego, president of All Bay Mill & Lumber Co. in Napa County, says it’s anybody’s guess just what Trump will do on tariffs: whether it’s a tactic to win trade and other concessions or a long-term move to boost domestic production. But if Trump goes through with tariff increases on lumber, he said, it will “absolutely add” to the supply crunch.

Addiego recalled that lumber prices jumped about 50% over a few quarters following the 2017 Tubbs fire, which destroyed more than 5,600 structures in Napa and Sonoma counties.

At the same time, he noted that it’s also possible that lumber prices won’t go up much at all if Trump’s tariffs cause a slowdown in the economy and end up depressing homebuilding.

“The tariffs are a serious illness,” Addiego said, adding that he expects some builders to try to offset potential price spikes by locking in purchase contracts earlier.

Steve Kalmbach, president and chief operating officer at Thomas James Homes, a single-lot homebuilder based in Aliso Viejo, said he’s starting to get calls from owners of fire-damaged homes, with some saying they want to rebuild ASAP and others saying they aren’t sure what to do.

“We’re just at an information gathering stage at this point,” said Kalmbach, whose firm has built more than 50 homes in Pacific Palisades over the last decade. He said it was too early to say what the rebuilding would mean for supply and prices, but said the fires certainly aren’t what the market needed.

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“Housing is challenged right now, whatever the issue. Everyone is trying to source the materials and labor,” he said.

New York CNN —

Martin Johnson and his fiancé, Celeigh Chapman, had spent several years restoring and renovating their home in Altadena by hand. It took only hours to lose the home and everything in it last week.

“We didn’t have a kitchen for a year and a half. We had just cooked the first dinner in the house just after Christmas,” said Johnson, who co-owns LA Woodshop, which provides woodworking spaces and lessons for people who want to do it themselves or build furniture professionally.

“We spent many nights hand-sanding doors and window frames,” Chapman said.

“The floors took 18 months to finish,” Johnson said. “We were weeks away from being done making the house into a piece of art, and now it’s gone.”

If dealing with that financial and emotional loss isn’t enough, they’re faced with what was already a difficult and expensive housing market in Southern California. The massive wildfires that have sent thousands of families scrambling to find some place to live, likely for the next several years, could make everything even worse.

They’ve been staying with friends since they evacuated, dealing with the stress and anxiety that Chapman says has made it difficult for her to sleep.

“I think we’ll find something,” said Johnson. “If it ends up being a lifestyle downgrade for more money is difficult to say. We can’t be too selective. We couldn’t be selective even before 10,000 houses burned down.”

Real estate agents and economists agree. They say the sudden surge in demand for housing by those who lost their homes, combined with the plunge in the number of homes available, is likely to send housing prices — to buy or to rent — shooting up in the months and years ahead.

Short supply, surge in demand

“We were already in a housing crisis. Even before this, we didn’t have nearly enough homes for sale. We didn’t have enough homes for lease,” said Los Angeles real estate agent Brita Kleingartner. “Now there’s an overwhelming demand, and we’re just starting to see what that looks like. All our agents have had their phones ring off the hook. Most of showings are for families who have lost everything.

“It’s very sobering,” Kleingartner added. “The next week will be really heart breaking.”

Some real estate agents are saying they’re already starting to see prices of rental units climb hundreds, if not thousands, of dollars a month. Prices of some units that had been on the market are up 15% to 20% in the last week, said Jeremiah Vancans, another Los Angeles real estate agent.

A “For Sale” sign sits in a neighborhood destroyed by the Eaton wildfire in Altadena, California. Allison Dinner/EPA-EFE/Shutterstock

“Demand is going to be through the roof,” he said. “The inventory was already pretty low. I imagine it’s going to create more upward pressure on prices.”

But he said the longer-term impact on prices is tough to determine, as people are trying to get a sense of how much they might get from insurance for their losses.

“It’s too early to really tell how this is going to affect the LA market,” he said. “People are still numb. The fires are still burning.”

Real estate agents reported working 12-to-14-hour days because of the surge in demand.

“There are basically no rentals,” said Jade Mills, a Beverly Hills real estate agent at Coldwell Banker. “I’ve been on the phone for the last two days asking my sellers if they’d be willing to rent, or calling rentals that are no longer available.”

Her son lost his home in Pacific Palisades, too.

Years to rebuild lost supply

Restoring the city’s lost housing stock is likely to take at least three to five years, according to the real estate agents who spoke to CNN, because of the time it takes to clear the burned homes, reach settlements with insurance companies, work through the permitting process and then find the labor needed to rebuild.

Vancans said in addition to the increased prices on some rental units, he’s concerned that those who lost their homes could get cash offers for the property where their houses once stood — the offers coming from what he calls “predatory buyers” who are seeking to take advantage of financial misfortune.

Homes burned from the Palisade fire smolder near the Pacific Palisades neighborhood of Los Angeles on Thursday. Josh Edelson/AFP/Getty Images

A study of past wildfires by Redfin showed that the average prices for property can actually fall in the short term as fire-damaged homes or lots that need to be cleared of debris sell at a discount. But that decline doesn’t last.

“Like much of the US, California is facing an acute housing shortage,” said Daryl Fairweather, chief economist at Redfin. “The wildfires themselves are also making housing more expensive. After a town burns, builders come in and construct new homes, which are typically more expensive. And homeowners who stay frequently invest in making their homes more fireproof, which increases property value.”

Bidding wars even before the fires

The market had already been very tight. Data from the California Association of Realtors shows fewer than 30,000 homes, townhouses and condos sold last year in a county of 3.7 million households, meaning less than 1% of homes being sold. Now suddenly an estimated 10,000 homes may have been lost to the fires, and counting.

And it’s not just that as many as 10,000 people are suddenly added to the buying market. It’s how they were added, as well.

“In the past five years it’s been bidding-war city,” said real estate agent Brock Harris. “Any house that was under $2 million was getting 10-20 offers. Now with people shopping with insurance money, it’s going to get distorted significantly.”

Harris and his wife, Lori Levine Harris, who is also a real estate agent, have been trying to lend a hand to the people calling them. Johnson and Chapman are staying in an outbuilding on their property temporarily. And Lori Levine Harris has been compiling a spreadsheet among real estate agents of furnished homes available for rent over the last week. But there aren’t nearly enough to go around.

“Short-term furnished housing — that’s what people are going to need. My phone has been ringing off the hook,” she said. “We already have limited housing supply, and losing 10,000 homes will exacerbate that situation.”

But most of the furnished units on her spreadsheet are in some of the more expensive parts of market, such as Beverly Hills, Bel Air, Malibu or Westwood. And they come with staggering rents — a median price of about $16,000 a month for the 75 properties available, ranging from a relatively affordable $2,600 unit for a one-bed, one-bath apartment, to $250,000 a month for a 22,000-square-foot furnished Beverly Hills mansion with eight bedrooms and 15 baths.

Fortunately for people who are renting apartments or homes already, Los Angeles and most of the communities in the county have rent control that limits rent increases at the end of an existing lease. But those looking to move into a vacant apartment because of the fires are likely to face significantly higher rents.

12 months of rent upfront to sign a lease

Joe Thompson, who lives in Pacific Palisades with his wife, two young children and two dogs, said he’s very fortunate that his home was not completely destroyed by the fire. But there was enough damage that it could take months before it’s safe to return to live in.

His family has been staying in a hotel, and they were on their way to look at a rental unit for the first time on Monday morning. But he said he’s seen prices going up sharply from what they were previously listed for on various online sites.

He said a friend of his, another fire victim, told him that that he was only able to sign the lease for the home he wanted when he agreed to pay 12 months of rent upfront. Thompson said he’s considering doing that if that’s what it takes to get the home his family needs.

“Financially, I think the insurance plan we have will be OK for helping with living expenses,” he said. “It’s just the price-gouging and competing for rentals with everyone who is going through even worse right now is difficult. You’re trying to line up rentals, but you have no idea how long you’ll need it. And the only way to distinguish yourself (when trying to sign a lease) is put up 12 months of rent upfront.”

CNN —

Tens of thousands of California residents will decide whether to permanently relocate or rebuild their homes after the most destructive fires in Los Angeles’ history.

Insurance companies may cover thousands of dollars in temporary housing and living expenses — unless homeowners are underinsured or not covered.

“The policy is generally going to cover the cost of additional living expenses while you are out of your home, to maintain what is kind of your usual standard of living,” said Karen Collins, the vice president of American Property Casualty Insurance Association’s property and environmental division.

For example, if someone’s insurance covers $100,000 for a property, the insurance company might cover another $20,000 — or 20% — in additional living expenses, Collins said.

Peter Vanek, president of PVRK, a Southern California-based real estate consulting company, said his home was destroyed by a battery fire in 2023. His insurance initially estimated $350,000 for the house. After Vanek provided evidence of what was lost, his insurance paid twice as much, including living expenses while he relocated, and the house was rebuilt.

To relocate or rebuild?

Insurance coverage plays an outsized role in the decision to move or invest resources into reconstruction. For some with insurance, it could boil down to having pictures of the property before the damages and updating insurers with home estimates.

“(Homeowners) might not have disposable income to cover the difference between whatever their insurance is going to cover and what their cost is to rebuild their home, replace all of their items,” Vanek said.

The current wildfires in Los Angeles County are the costliest and most destructive in its history. The insured losses could exceed $20 billion, according to a report by JPMorgan Chase.

A person walks amid the destruction left behind by the Palisades Fire in Los Angeles on January 9. Jae C. Hong/AP

Between 2020 and 2022, insurance companies declined to renew 2.8 million homeowner policies in California, including 531,000 in Los Angeles County, according to data from the California Department of Insurance. Most of those policies were canceled by insurers.

California Department of Insurance Commissioner Ricardo Lara said Thursday that insurance companies must stop any pending non-renewals or cancellations for properties near the fires.

“I am working on all fronts to make sure wildfire victims get the benefits they are entitled to, and they get it as soon as possible,” Lara said Friday in a statement.

Moving isn’t necessarily easier than rebuilding. Moving locally typically costs between $884 and $2,569, according to digital marketplace HomeAdvisor.

Mike Madowitz, principal economist at Roosevelt Institute, said many of those impacted by Hurricane Katrina chose to stay put after being displaced due to the cost and hassle of moving again.

Most residents impacted by natural disasters don’t move, said Aaron Terrazas, a former chief economist for Glassdoor and senior economist at Zillow. He added that local economies receive a boost after natural disasters because residents purchase cars, washing machines and other goods when rebuilding.

“But we shouldn’t be under any illusion that that’s a meaningful kind of growth for the economy,” Terrazas said.

The future of construction costs

About 18% of the US labor force in 2023 were foreign-born, according to the Bureau of Labor Statistics. And about a quarter of the construction industry are immigrant workers, especially in regions like Los Angeles, Terrazas estimated.

Immigrant workers have flocked to places that were hit by natural disasters, such as New Orleans after Hurricane Katrina and parts of Florida more recently, Terrazas noted. During the recovery period, these workers may work in construction or open small businesses.

President-elect Donald Trump has proposed mass deportations, which could cause construction work to stall, Terrazas said.

“Some of these kind of policies are a one-two punch for a sector like the construction industry,” he explained. And “it’s not just labor. It’s materials.”

Imported materials, such as appliances, would cost more if Trump imposes more tariffs. Lumber, which had high prices due to previous Trump administration tariffs, could become even more expensive and businesses could mark up their costs as a result, said Madowitz of the Roosevelt Institute.

Vanek of PVRK said independent contractors and home builders, not major companies, will primarily lead the construction efforts in California.

“There’s no efficiency in rebuilding a fire-ravaged community,” he said.