Through our work with rental management operators across North America, the entire Leasey.AI team has seen firsthand how global policies, such as tariffs, are disrupting day-to-day operations, squeezing budgets, and reshaping decision-making across the industry.
I sit across the table from property managers, leasing teams, and multifamily operators dealing with these impacts daily.
And let me assure you: the impacts of tariffs on real estate and the rental market are no longer theoretical—operators who face the effects head-on will come out of this with a strategic advantage.
In this article, I’ll explore:
- How tariffs are increasing material and construction costs (Including lumber, steel, and copper—core to residential development)
- Why new housing starts are slowing across North America (And how that’s straining inventory and delaying growth)
- What this means for affordability and margins (And why renters and buyers are both feeling the squeeze)
- How residential property managers can respond (With actionable steps to protect operations and preserve profit)
4 Major Ways Tariffs Impact Real Estate Professionals in 2025
These challenges are real, but so are the tools to address them. At Leasey.AI, our work is rooted in helping the industry respond to this kind of complexity with greater speed, automation, and insight. If you’re feeling the pressure, you’re not alone—and this article is for you.1. Tariffs Impact Real Estate Construction Inputs
Tariffs on materials such as steel, aluminium, lumber, and copper directly impact building costs. A NAHB/Wells Fargo survey estimates recent tariffs have added $10,900 to the cost of a typical U.S. single-family home. Similarly, PBMares warns that tariffs raise construction costs, home prices, and exacerbate affordability challenges. Notably, U.S. tariffs of 14.5% to 34.5% on Canadian softwood lumber—Canada supplies roughly 85% of U.S. softwood—have become a flashpoint. The NAHB estimated tariffs and other factors increased homebuild costs by $7,500–$10,000. In Canada, RBC notes that steel and aluminum tariffs threaten affordability there, too, potentially adding $9,000 per home. How this trickles down to rental property professionals: Property managers are seeing higher costs not just in new builds, but in everyday operations—renovations, unit turns, appliance replacements, and even basic repairs are now more expensive. Delays in sourcing materials for maintenance or upgrades can reduce unit availability and strain leasing timelines. Picture this: Longer reno timelines mean longer vacancy periods before tenants can move in. Longer vacancy periods mean lost rent and plummeting ROI. And we all know what lower ROI means.2. Tariffs Cause Reduced Housing Starts, Rising Downtime, and Delayed Projects
Builders are scaling back and delaying projects in response to cost uncertainty. Here are some stats:- A Reuters poll found 90% of analysts expect tariffs to reduce the volume or size of new housing starts.
- In April, U.S. single-family housing starts dropped 12% year-over-year.
- In Canada—particularly BC—builders are asking for relief from restrictions as tariff-related material cost surges of 5–15% have disrupted project timelines, with developers reporting 12% cost increases and 60-day delays.
- Canadian provinces are struggling to meet their development pledges, with projections in Ontario falling short in 2025, 2026, and 2027.
- Housing starts were already struggling in 2024, before tariffs. Almost 50% of new builds in 2024 were purpose-built rental units, showing the increasing demand for new builds in the rental market.
3. Tariffs Create Real Estate Affordability Pressures: Buyers, Renters, and Landlords
Tariff-driven cost increases translate directly to higher sale prices and rents—and higher financing costs. Reuters projects U.S. home prices growing 3.5% annually through 2027, but warns tariffs will restrict new construction, exacerbating inventory shortfalls. Newsweek and the Washington Post both highlight tariffs adding $11,000+ per home to construction costs, constraining one of the few levers addressing housing scarcity. On the renter side, limited new supply often drives conversion to rentals, adding pressure to an already strained rental market. How this trickles down to rental property professionals: For renters, affordability worsens as rental prices rise to offset higher operating and capital expenses. For landlords and property managers, this can create friction in lease renewals, tenant satisfaction, and affordability compliance. It also increases pressure to justify rent increases through value-added services or operational transparency.4. Tariffs Lead to Supply Chain Uncertainty and Labour Fallout
Tariffs don’t only affect materials—they ripple into broader supply chains. The Beck Group estimates current tariffs add 1.5–2.5% to overall construction costs, on top of an expected 4.3% annual escalation. In B.C. Canada, once-in-a-decade construction layoffs are shocking builders and causing an increase in pressure for to government to relieve or roll back many of its real estate investment restrictions so projects can resume. Moreover, tighter labour conditions in construction can amplify costs independently. While labour and immigration policy interplay separately, material-related delays often compound workforce inefficiencies, stalling projects further. How this trickles down to rental property professionals: Maintenance teams are already stretched—now, they’re dealing with longer wait times for basic parts and materials, increasing resident frustration. For management companies, labour costs for skilled trades are rising, while the ability to quickly resolve issues is declining, putting NPS scores, online reviews, and renewal rates at risk.Strategic Imperatives for Residential Property Management Professionals
So, how should residential operators respond to the growing impacts of tariffs on real estate? While some cost pressures are out of your hands, there are clear steps property management professionals can take to adapt, protect margins, and stay ahead of the curve.1. Reassess Budgets and Revenue Models
Tariffs are changing your cost base. Don’t wait until renewal season or Q4 to adjust:- Reforecast your operating and capital budgets based on current material and labour rates.
- Reevaluate renovation timelines and scope—focus on high-ROI upgrades that reduce long-term maintenance.
- Reconsider rent pricing and renewal strategies to ensure you’re not undercharging relative to rising operational costs.
2. Diversify Vendor Relationships and Lock Pricing Where Possible
Material and services volatility can cascade into your leasing operations if left unchecked:- Work with contractors and suppliers to lock in rates for upcoming turns or renovation projects.
- Explore regional vendors to reduce dependency on long-distance or international supply chains affected by tariffs.
- Partner with vendors who offer transparent timelines and bulk purchasing options.
3. Audit Operational Inefficiencies
With tighter margins, small inefficiencies compound quickly:- Review how long it takes to respond to leads, qualify tenants, or turn over a unit. Manual delays cost more when the stakes are high.
- Consolidate tech stacks where possible—multiple disconnected systems often increase both cost and error rates.
- Use data to identify bottlenecks (e.g., slow showing coordination or application processing) and eliminate them with automation or improved process design.
4. Communicate Early, Clearly, and Authentically
Transparency builds trust—especially when market conditions are turbulent:- Proactively educate owners and tenants on how tariffs may affect maintenance timelines, renovation scopes, or rent increases.
- Frame cost pressures around shared impact and shared outcomes: you’re working to preserve both livability and long-term property value.
- Equip on-site teams with talking points or scripts that help explain why delays or cost changes may occur.
5. Automate to Retain Control and Reduce Manual Work
Rising costs mean you need to do more with less—without burning out your team:- Use platforms like Leasey.AI to automate up to 90% of leasing operations: from lead response and follow-up to application processing and tenant communication.
- Centralize listing distribution across platforms (e.g., Kijiji, Zillow, Facebook Marketplace, etc.) to cut time-to-market and reduce lead drop-off.
- Automate follow-ups and qualification to ensure hot leads are captured, not lost in a manual inbox.
6. Monitor Tariff and Policy Trends That Affect Your Markets
Policy shifts can happen fast. Stay informed:- Subscribe to industry associations (e.g., NAA, FRPO, CFAA) that issue regular policy updates.
- Track local and federal housing policies that may intersect with tariff implications (e.g., incentives for modular builds or local sourcing).
- Consider bringing in a part-time analyst or consultant if your portfolio spans multiple regions with varying exposures.