Developer Nat Bosa has been responsible for some of downtown San Diego’s largest residential towers but looming tariffs have him flabbergasted.

His company, Vancouver, Canada-based Bosa Development, is in the middle of construction on a 389-unit condo tower called Andia in downtown San Diego. It also has plans to build a 211-unit apartment building next to Children’s Park.

Bosa said the Trump administration’s new 25% tariff on all steel and aluminum entering the U.S. will mean cost increases for apartment and condo developers, many of whom have reshaped downtown’s skyline for more than a decade.

“To have the illusion (tariffs) would not cost us more money is absolute insanity,” Bosa said. “Right now, we have no idea to what extent.”

He declined to say if they were pausing any projects. Some of his company’s recent buildings have been the 41-story condo tower Pacific Gate off of Harbor Drive, the 43-story condo tower Electra on E Street and the 41-story Diega apartment complex on Broadway.

Bosa also bemoaned the Trump tariffs in 2018, arguing it would cost them “a few million bucks more.” He did continue building, but there were exemptions for numerous nations following the initial announcement, which is why the president said his first attempt at steel tariffs had been unsuccessful.

In his new executive order, President Donald Trump said all exemptions for nations such as Canada, Brazil and Argentina would be removed.

Trump said the tariffs are necessary to protect America’s steel and aluminum industries.

“Foreign nations have been flooding the United States market with cheap steel and aluminum, often subsidized by their governments,” the order read.

Steel and aluminum tariffs are slated to start on March 12 but exactly how much of that cost builders will have to bear is still being calculated by developers and housing experts.

Even if it is just, say, a 2% cost rise, it will make a significant difference for residential builders, said Nathan Moeder, principal with real estate analysts London Moeder Advisors.

“I think we’re capped out on developers’ cost burden,” he said. “So, if we are increasing costs more, developers will have to make a choice: Do we proceed with the project by increasing our rents? Or do we revisit things?”

Prices have already started rising, with the two of the biggest U.S. steel producers raising prices when tariffs were announced in early February. U.S. Steel increased its price for a ton of flat-rolled steel by $50 in February, and Nucor up $60 a ton.

Lori Holt Pfeiler, CEO of the San Diego County Building Industry Association, had already raised alarm bells over potential Canadian tariffs that could affect the homebuilding industry. Almost all San Diego County homebuilders use Canadian lumber.

While lumber production in the U.S. South has increased, it is not nearly enough to meet demand, experts say, especially on the West Coast. U.S. builders get lumber from China and Mexico but they would also be affected by tariffs. Other nations, like Germany and Brazil, also provide lumber but the president has said he wants a 25% tariff on the European Union. It’s unclear what the plans are for Brazil, but its president, Luiz Inacio Lula da Silva, has said the nation may enact retaliatory tariffs in response to the steel tariffs.

“Tariffs do not help with housing costs,” Pfeiler said.

The Building Industry Association and other trade groups have struggled to keep up with the Trump administration’s changing plans. Trump announced in early February that there would be 25% tariffs on Canada and Mexico, only to back down a few days later after promises by Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau to bolster their border security.

However, Trump said Thursday morning he would go through with the tariffs starting Tuesday because he was not convinced Mexico and Canada were doing enough to stop the flow of fentanyl into the U.S.

Many experts The San Diego Union-Tribune spoke to were hopeful that the tariff plans were only threats to get better trade deals. Still, Bosa said that doesn’t mean a developer isn’t going to want to pause plans for a little while.

“If any developer was getting ready to start something new,” he said, “they will probably wait until they know what is going through (Trump’s) mind.”

There are roughly 4,000 new apartments opening in San Diego County this year, but it was looking like a slowdown was on the way even before tariffs were announced. Slowed rent gains, higher interest rates and increased labor cost were all seen as factors.

Real estate tracker CoStar forecasts a decrease in new housing delivered in 2026, 2027 and 2028 — compared to highs reached the past few years.

CoStar bases its forecast on vacancy rates, demand, rent prices and market conditions. It also takes into consideration historical averages, such as a slowdown is likely after two really big construction years.

Outside of housing, steel and aluminum tariffs are likely to affect other industries, such as electronics, auto and packaging for groceries.

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