In a webcast presentation, RealPage’s deputy chief economist Arben Skivjani and market analyst Adam Couch noted that tariffs are not a new phenomenon. “Tariffs are inflationary in nature, and they are passed on down to the renter,” noted Couch.

He cited the consequences of the 2018 tariffs imposed on steel and aluminum under the first Trump administration. These effects included development cost increases that soared $5,000 to $10,000 per multifamily unit, according to the National Association of Home Builders, especially for mid-rise and high-rise developments. Supply constraints led to extended timeframes for projects to be completed and delays. Taxes on Chinese goods affecting fixtures and appliances and other interior features added other complications.

In 2025, Trump’s tariffs could have a wide range of possible outcomes, Couch noted. One possible consequence is the restructuring of supply chains, which could affect established quality control protocols. Substitution of materials for others that are more cost effective or sustainable may be adopted. In addition, developers may turn to minimization to reduce material and labor costs, as well as potential supply chain complications. This might include eliminating crown molding, changing microwave placements, or painting instead of installing backsplashes around appliances.

Skivjani said tariffs and inflation now make construction even more complicated and more expensive. Since 2018, he said, 500,000 apartments have been delayed, leaving renters with fewer choices. “Each percentage point of shortfall represents thousands of renters facing fewer options and higher prices,” he noted.

In Los Angeles alone, Skivjani cited a “staggering” 70,000 delays since 2018. New York and interior markets like Phoenix and Dallas have also been affected. “Tariffs are having a broad impact cutting across geographic regions and local regulatory environments,” he said.

The duties also complicate other difficulties developers already face including labor shortages, some caused by the administration’s immigration policies, as well as red tape, the rising cost of insurance and tighter constraints on construction.

The economic uncertainty tariffs create also erodes the purchasing power of renters and reshapes renter demand patterns. This can incentivize them to choose less expensive options instead of Class A apartments. Younger potential renters may also decide to remain in their parents’ homes or to choose to rent with a roommate, a rising trend.

Looking ahead, there is no single clear path for developers, Skivjani commented. Some are reviewing their supply chains, negotiating with suppliers, setting aside a cushion of around 8% to 12% toward contingency funds to cover price increases, or even inserting tariff clauses in their contracts.
The analysts also offered some tips to deal with the uncertainty. They recommended that developers prioritize turn times on large floor plans, especially two-bedroom units, to accommodate roommate preferences.

Longer lease terms of 13 or more months can stabilize revenues for landlords and create rate certainty for renters. Flexible payment options aligned with aligning “rent due” dates with renters paycheck schedules may help. And concession arrangements with local stores, such as a discount on groceries for renters or free streaming services, can build tenant loyalty.