How South Florida Developers Are Navigating Construction Tariffs

Tariffs Trigger Strategic Shifts

In the wake of former President Trump’s sweeping tariffs—most notably a 10% universal duty on all imported goods—South Florida developers are recalibrating their plans, per the Real Deal.

Though the panic has eased following a temporary pause on some country-specific tariffs, many in the industry are still bracing for price hikes on materials like steel, aluminum, and lumber. Construction tariffs have become a top concern for developers as they reassess procurement timelines and sourcing strategies.

“We have been crunching every number we can possibly imagine,” said Nelson Stabile, principal at Integra Investments. Like many others, his firm is exploring alternatives, including shifting furniture manufacturing to Brazilian partners to offset potential price increases.

Mitigation in Motion

Developers are moving fast to lock in costs. Calta Group co-founder Gaetano Caltagirone said general contractors are buying steel, aluminum, and rebar in bulk to avoid future pricing shocks. His team is also exploring early purchases of imported kitchens from Italy. “It becomes a lot more complicated to budget when you throw tariffs into the mix,” he said.

While some, like BH Group’s Isaac Toledano, view the tariffs as a short-term tactic for international negotiation, others are less confident. Toledano’s optimistic take? “This is a great opportunity to execute,” thanks to Florida’s strong demand and business-friendly environment.

Affordable Projects Under Pressure

Stabile pointed out that the cost burdens hit hardest in affordable and workforce housing segments. “Profit margins are already tight,” he said, noting rising prices on key items like windows, which Integra imports from Colombia. He added that the Builders Association of South Florida is lobbying alongside the National Association of Home Builders to mitigate long-term damage from construction tariffs.

Market Reaction and Outlook

Patrick Murphy of Coastal Construction underscored the uncertainty developers face. “Tariffs are inflationary,” he said. That means a potential domino effect: increased inflation leading to higher interest rates, further complicating financing for multifamily projects.

KAR Properties CEO Shahab Karmely echoed that sentiment. While he supports the idea of fairer global trade, he described the implementation as “chaotic.” Still, he noted a silver lining: buyers might see condos as a hedge against inflation.

What’s Next?

As the construction industry continues to adapt, developers are leaning on contractual tools like force majeure and escalation clauses, according to Peter Dyga of the Associated Builders and Contractors’ Florida East Coast chapter. However, the broader consensus is clear: predictability is paramount.

For now, South Florida developers are pushing forward—strategizing, adapting, and hoping the market stabilizes before tighter margins give way.