Steel, lumber, and appliance tariffs are adding 5-9.6% to new development costs across NYC, keeping inventory scarce and prices elevated
Rider Levett Bucknall's Q2 2026 cost report puts hard construction costs for a New York multifamily building at $255 to $500 per square foot of gross floor area, with NYC's construction cost index up 4.46% from April 2025. On top of that, imported steel and aluminum articles face a 50% Section 232 tariff, applied to their full customs value since April 6, 2026. In my 25+ years of selling real estate across all five boroughs, I have seen these inputs flow through to what buyers pay.
These are hard costs only, in dollars per square foot of gross floor area. They exclude land, design fees, financing and developer margin, which is why a buyer's price per square foot runs higher.
| Rider Levett Bucknall, Q2 2026 | Low ($/sq ft) | High ($/sq ft) |
|---|---|---|
| New York multifamily | $255 | $500 |
| New York single-family | $365 | $730 |
| New York basement parking | $175 | $255 |
| Boston multifamily | $290 | $390 |
| Chicago multifamily | $220 | $490 |
| Los Angeles multifamily | $270 | $440 |
| Miami multifamily | $190 | $290 |
RLB's New York construction cost index stood at 38,738 in April 2026, up from 37,085 a year earlier.
| Material | Tariff | Where it shows up in a building |
|---|---|---|
| Steel and aluminum articles | 50% (Section 232) | Structural steel, curtain walls, window frames |
| Derivative metal goods listed at the lower tier | 25% | Fabricated metal products |
| Derivative goods made entirely with U.S.-smelted metal | 10% | Qualifying fabricated products |
| Timber and lumber | 10% (Section 232) | Framing, in low-rise and wood-frame buildings |
| Kitchen cabinets and vanities | 25% when announced in September 2025 | Kitchen and bath packages |
Canadian softwood lumber carries antidumping and countervailing duties on top of the Section 232 tariff. The National Association of Home Builders reported in September 2025 that the Section 232 tariff raised combined duties on Canadian lumber by another 10 points, to roughly 45%. Sources: NAHB on the Section 232 lumber tariff and GHY International's August 2026 summary of the Section 232 metal tariffs.
The 421-a tax abatement expired in June 2022, and the city's replacement program, 485-x, was created in 2024. Projects started in that gap carry different economics than the 421-a era, and they take years to reach occupancy, so the supply effect arrives late.
StreetEasy counted 16,665 NYC homes for sale in March 2024, 16,719 in March 2025 and 16,325 in March 2026. After two years, inventory is slightly lower, not higher. Recorded sales rose over the same stretch, from 3,166 in March 2024 to 3,489 in March 2026.
Prices show the same squeeze. The median Manhattan condo sale was $1,450,000 in March 2024, $1,685,000 in March 2025 and $1,550,000 in March 2026, per StreetEasy.
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With hard costs at $255 to $500 per square foot before land, design, and financing, compare a co-op or older condo price per square foot against a new development's before assuming new construction is the better value.
Browse new developments across NYC alongside resales to compare.
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Disclaimer: All information provided in this article is for educational purposes only and does not constitute legal, financial, or real estate advice.
Listing data sourced from the REBNY Residential Listing Service (RLS). Information is deemed reliable but not guaranteed.
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License No. 10301213304 · 360 Madison Avenue, 9th Floor, New York, NY 10017
