With the onslaught of tariffs that the United States is posing on countries that provide building materials and equipment, the ripple effect will hit contractors hard, especially when it comes to securing building permits without costly delays.
Many top economists have presented hordes of data showing the impact of tariffs on the U.S. GDP and academicians from business universities have written white papers about what history has shown when tariffs are imposed and use this data to suggest what could happen going forward.
And several large construction industry associations, such as the Association of General Contractors and the National Association of Homebuilders, have voiced their concerns and asked the U.S. administration for exemptions from tariffs to minimize adverse financial implications on their members, and to mitigate market slowdowns, especially with housing.
While all of these voices that are raising concerns about tariffs are important in the construction industry, what I do know for sure is that the construction industry is no stranger to economic pressures. I have listened to horror stories from contractors and worked with project owners in challenging markets, like during the pandemic, where prices for construction materials were sky-high and the lead times on materials were greatly extended due to supply chain bottlenecks.
Due to material costs shifting and permitting timelines being affected in unexpected ways, below are five key ways that tariffs can impact permitting for contractors.
1️. Increased Material Costs, Change Overall Construction Cost Impacting Building Permit Costs
- As tariffs drive up material costs, contractors must review permit valuations and adjust accordingly. Cities are now reassessing construction budgets, which may lead to longer approval processes.
2️. Longer Lead Times & Possible Delays in Approval
- With supply chain disruptions, many contractors are assessing the impact of delays on certain materials and equipment. But here’s the catch or “gotcha” that we have witnessed before: some jurisdictions won’t issue permits until material availability is confirmed. So, keep this in mind!
3️. Unexpected Permit Revisions
- If material or equipment substitutions are made due to tariffs, your permits may require revision. This can lead to extra reviews, adding both time and costs.
4️. Increased Scrutiny of Trade Compliance
- Some projects may require proof that materials comply with local sourcing laws. We’re seeing cities tighten up on these requirements, especially for public and federally funded projects.
5️. Changes in Code Interpretations & Inspections
- Inspectors raise their code antennas to be more cautious about alternative materials and compliance standards. This means contractors must stay proactive in ensuring substitutes align with code regulations.
To assist contractors in navigating a market with high tariffs, below are five permitting tips.
1️. Adjust Project Valuation or Overall Construction Costs Proactively
Tip: When submitting permits, ensure cost estimates reflect current market conditions. Work with a permitting expert to align valuation adjustments with city requirements.
2. Plan for Potentially Longer Approval Times
Tip: Submit permits early and factor in buffer time for potential delays. Check with local permitting offices to confirm if material lead times affect approval requirements.
3. Verify Material Substitutions with Code Compliance
Tip: Before making substitutions, verify that the new materials meet the city code. Proactively submit permit revisions, if required.
4️. Stay Updated on Tariff-Driven Zoning & Building Code Changes
Tip: Monitor updates from city planning departments and industry associations. Attend local permit review meetings or work with a permitting expert to stay informed.
5️. Engage with Permit Expediters & City Officials Early
Tip: Build strong relationships with city permitting staff and consider working with an experienced permit expediter to streamline the process and avoid costly delays.
In Conclusion
By applying these tips, contractors can stay ahead of permitting challenges and minimize delays in a market impacted by high tariffs. If you need expert guidance, PermitUsNow is here to help—reach out anytime at 1.844.PERMIT.4 or visit permitusnow.com/quote. #BuildSafe
By: Helen Callier, PermitUsNow
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