Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 28, 1993 TAG: 9303010340
SECTION: HOMES PAGE: E2 EDITION: METRO
SOURCE: Associated Press
DATELINE: LENGTH: Medium
SOARING TIMBER PRICES DRIVING UP HOUSING COSTS
Homebuilders and lumber companies say soaring timber costs have added thousands of dollars to the cost of building Virginia houses."It's unbelievable. In 15 years, I've never seen anything like this," said Tom Sacco, manager of Lumber City Inc. of Chesapeake. "I spoke to some other builders in the area, and we've seen increases between 8 to 10 percent just because of the lumber."
A combination of a timber supply shortage and a growing demand is to blame for the higher prices this year, building companies say.
Sacco and others in the building industry attribute the tight supply to environmental restrictions on government-owned timber lands in the Pacific Northwest. Environmentalists, however, blame increased demand as the recovering economy brings more home sales.
"It's real simple. It's the Endangered Species Act," said Sacco, referring to federal protection of the northern spotted owl's habitat in the Northwest. "It's taking lumber out of production in the West."
The primary pieces, spruce studs, come from the northwestern United States and Canada, he said.
The cash price for studs, the 2-by-4 boards that help form the basic structural skeleton of houses, has risen a record 75 percent in the past four months. They now cost $437 per thousand board feet, according to Random Lengths, a weekly newsletter on forest products.
The price hike translates into higher costs for builders - but not necessarily for homebuyers, said Ron Frazier, president of Sycamore Homes in Prince William County.
The stronger economy has meant a modest increase in business in recent months, but the lumber costs are still hurting him, Frazier said.
The lumber price increases have added $2,000 to $3,000 to the cost of each house he builds, he said.
But Frazier said he has been unable to pass the cost on to his customers because the demand for housing in the area remains so soft that home buyers might back out of a deal if he tried.
In central Virginia, the prices of plywood and framing lumber have increased by as much as 60 percent in the past three months, driving up the lumber cost of a new house by $4,000 to $10,000, said Eric DeGraff, assistant manager of Phillips Building Supply in Albemarle County.
A spokesman for the Georgia-Pacific Corp., one of the nation's largest forest products companies, said the lumber supply shortage has driven costs up 40 percent to 70 percent industrywide.
"We're in a situation where we've come close to being forced to shut down some of our mills because we can't get timber," said Chuck Jones, spokesman for the Atlanta-based company.
Explanations for the steadily rising lumber prices include everything from efforts to protect the spotted owls to Canadian tariffs.
Those who point to the spotted owl as a factor say Washington and Oregon are harvesting only a twelfth of the timber they harvested three years ago.
Environmental groups refuse to take the blame for rising lumber prices.
Michael Bean, chairman of the wildlife program for the Environmental Defense Fund in Washington, D.C., said growing demand, not a supply shortage, is driving up lumber prices. He said prices also reached a peak in 1989, when building demand was high, even before the northern spotted owl was listed as endangered.
Northwest forests on public land also provide a small percentage of timber harvested nationwide, environmentalists say. Timber sold on those lands in fiscal 1990 totaled nearly 8 billion board feet in 1990, compared with 2 billion board feet in fiscal 1992.