Housing
This section of the BDN aims to help readers understand Maine’s housing crisis, the volatile real estate market and the public policy behind them. Read more Housing coverage here.
A new housing project coming to Freeport will likely cost more than an identical one roughly 20 miles away due largely to the cost hikes President Donald Trump’s tariffs have added to building materials, its developer said.
Domus, a residential development company in southern Maine, expects to break ground on a new housing project called Depot Terraces next month. The building will provide 45 new units of housing near downtown Freeport, said Jack Soley, principal at Domus.
The building will be identical to another housing project now under construction in Westbrook, but the two will not cost the same for Domus — or future residents — due, in part, to broad tariffs on items of all sizes needed to build the units.
Tariffs have added higher costs and more unpredictability to the development industry, which was already struggling to navigate narrow margins and create housing at a price that many people can afford. This also comes at a time when Maine urgently needs thousands of new units to fill an existing shortage and meet future needs.
“When you don’t have predictability in the marketplace, everyone pauses,” Soley said. “If I can’t build it at a cost where I can sell it and make a profit, then it doesn’t work. If we’re in an economy where people feel that they can’t afford things, then they’re not going to buy things.”
President Trump began threatening tariffs — taxes that must be paid on imported goods entering the U.S. — on countries as early as his first month in office in 2025. He broadly instituted them against most countries on April 2, 2025, which he referred to as “Liberation Day.”
The tariffs have varied over the past year and some have been struck down in court. Goods from most countries are currently subjected to at least a 10% baseline tariff before they can enter the U.S.
Crews broke ground on the Westbrook building, named Clover Terraces, late last year and the project is slated to cost $312 per square foot, according to Soley.
The identical development in Freeport, meanwhile, is estimated to cost $330 per square foot due, in part, to tariffs on building materials that the earlier project was able to avoid, as the order was placed before the new fees took effect with the vendor, Soley said.
That additional cost to build the project will trickle down to an additional $9,000 tacked onto the price of a 500-square-foot unit.
“Some people say $9,000 is not a big price to pay, but I disagree,” Soley said. “People are struggling to afford anything today and this is going in the wrong direction.”
Drywall material and electrical equipment for the Freeport units, including wiring and lighting, will carry a combined additional cost of $53,000 because they’re coming from Mexico, Soley said. The company will pay $25,000 more for cabinets for the building than they would otherwise, as they’re shipped from Canada.
As of last week, imports from Mexico carried an 8% tariff on average while items from Canada had a roughly 4% tax, according to the Tax Policy Center.
Soley bought other big ticket items, including HVAC systems and windows, months or years before they’d be needed in order to avoid hefty tariff fees of $130,000 or more. But, buying them in advance means the company will still pay interest on the loans used to buy the items until the buildings they’re installed in are sold, he said.
“When you look at the cost of residential development and how skinny margins are, especially for workforce housing, there’s no way you can pay that and find success continually,” Soley said. “In the long term, this is going to make a huge impact on affordability because we can’t absorb those costs, so those go directly to the consumers.”
In 2025 alone, an estimated $194 billion worth of goods were used to create new multifamily and single-family housing, according to the National Association of Home Builders. Of that, $14 billion — roughly 7% — was imported from another country.
“Local builders in Maine have expressed serious concerns about sustaining their projects amidst sharply rising costs, with reports of price hikes between 10% to as much as 40% for essential materials imported from countries like Canada and China,” said Heather Raisanen, executive officer for the Home Builders and Remodelers Association of Maine.
“The potential for these increased costs to be passed on to buyers threatens to exacerbate our housing affordability crisis.”
U.S. home builders issued warnings just weeks after Trump took office in 2025 that tariffs on certain countries would be a blow to the industry.
In a Jan. 31, 2025 letter, then-chairman of the board of the National Association of Home Builders Carl Harris, urged Trump to exempt construction materials in the tariff on Canada and Mexico due to the trickle down effect it would have on homebuyers. At that point, 25% of building supplies were imported from Canada and Mexico.
“Imposing additional tariffs on these imports will lead to higher material costs, which will ultimately be passed on to home buyers in the form of increased housing prices,” Harris wrote.
Of the 45 units Domus will build in Freeport, 34 will be one-bedroom priced for residents making at or below 120% of the area median income, which the Department of Housing and Urban Development sets annually. In Freeport, that looks like $109,000 for one person and $124,600 for a two-person household.
The remaining 11 units will offer two bedrooms with a loft space and will be sold at market price, which Soley placed around $400,000.
