The festering lumber trade dispute between the U.S. and Canadian forest products industries brought turmoil to U.S. lumber markets last week, industry newsletter Random Lengths reported. "Uncertainty Creates Market Chaos" was the February 3 headline. "Concern over the possibility of duties on Canadian lumber exports to the U.S. put Western Red Cedar prices on a sharp upward trajectory through January," Random Lengths reported. "This week, the S-P-F framing lumber market turned equally volatile." Canadian suppliers boosted prices by 25% to protect against a threatened 30% U.S. import tariff, which could be assessed retroactively on current sales. One West Coast supplier announced a moratorium on February shipments, which triggered a futures market price run-up.
Canadian diplomats are gearing up for wide-ranging negotiations with the U.S., not just about lumber trade, but about the whole U.S.-Canada trade relationship. Newly appointed Canadian foreign minister Chrystia Freeland met with her U.S. counterpart Rex Tillerson, the former Exxon CEO, reports industry website Plant.ca (see: "Freeland warns US on tariffs: Don’t tax us, or we’ll tax you," by Alexander Panetta/Canadian Press). "I did make clear that we would be strongly opposed to any imposition of new tariffs between Canada and the United States,” Freeland told reporters. "That we felt tariffs on exports would be mutually harmful. That if such an idea were ever to come into being, Canada would respond appropriately.” But Freeland said her meetings in Washington were positive. "Freeland’s main takeaway from two days of meetings was actually quite encouraging," reported the Canadian Press. "She said everyone she spoke with viewed Canada as a model trading partner, with balanced trade, and comparable labour standards." Tillerson is well acquainted with Canada because of Exxon's heavy investment in the Canadian tar-sands oil patch: the multinational oil giant's stated oil reserves include 5 billion barrels of tar-sands oil, accounting for a third of the company's reserves. Next up: A Monday visit to Washington from Canadian Prime Minister Justin Trudeau.
- "Chrystia Freeland says Canada prepared for 'strong offensive position' on NAFTA," by Janyce McGregor/CBC News
- "Volatile Lumber Prices Here to Stay Amid Trade Spat, Canfor Says," by Jen Skerritt/Bloomberg
- "Key Building Materials Prices Far Surpassed Inflation in 2016" (NAHBnow blog)
- "'We're not naive': B.C. Forestry Minister prepares for 'challenging' softwood lumber negotiations," by CBC News
A huge fire struck a multifamily project under construction in Maplewood, New Jersey, on February 4. The six-alarm fire was the latest in a series of catastrophic fires to strike N.J. projects developed by the national real estate investment trust (REIT) AvalonBay (website, Twitter). NBC 4 New York had this report (see: "'Intense' Fire Damages Apartment Complex in Maplewood: Authorities," by Rana Novini. "The fire in Maplewood, which destroyed more than 200 units, comes two years after another fire demolished a luxury apartment complex built by the same construction company in Edgewater," the station reported. "The company, AvalonBay, said it has been working closely with city officials on fire safety and the two fires had different circumstances. Saturday's blaze happened while the building was under construction and before all of the safeguards were complete. The Edgewood fire began during maintenance."
The fire has triggered more calls by critics of light wood-frame construction, which the mainstream press has taken to calling "lightweight" construction. The North Jersey Record had this report (see: "Maplewood fire raises call for change to building codes," by Kathleen Lynn). "'Why are we waiting?' asked Glenn Corbett of Waldwick, an associate professor of fire safety at John Jay College in New York, who has pushed for a change. 'How many have to happen before we change something?' ... Corbett said that the type of lightweight wood construction used by AvalonBay shouldn’t be allowed in buildings taller than three stories." Maplewood Fire Chief Michael Dingelstedt told the Record that the fire spread quickly through framed, but not finished, parts of the structure where sprinkler systems had not yet been hooked up.
- "6-alarm fire levels part of unfinished Avalon complex in Maplewood," by Craig McCarthy/NJ Advance Media for NJ.com
- "Firefighters Battle Five-Alarm Blaze At NJ Construction Site," by Ali Bauman/CBS New York
- "Cold ruins remain one day after Avalon Bay fire," by Michael W. Curley/North Jersey Record
- "Tenants of burned complex can move to other AvalonBay sites, company says," by Spencer Kent/NJ Advance Media for NJ.com
Also in New Jersey, a mistrial has been declared in a consumer fraud lawsuit that pits condo purchasers against Kushner Companies, reports the Asbury Park Press (see: "Kushner trial vs. condo owners ends in sudden mistrial," by Suzanne Russell). "Prior to the mistrial being announced, Kushner Companies, formerly run by Jared Kushner, the son-in-law and senior adviser to President Donald Trump, had reached settlements with about half of the condo owners. Other condo owners began offering testimony on Tuesday... The condo owners filed suit against Kushner Companies, and it's subsidiary, Westminster Company, in connection with their claims of being misled into buying high-priced units with luxury amenities that have not been materialized. Many of the condo units were purchased starting in 2004 for prices ranging from $300,000 to $400,000. Sales and marketing representatives promised master common amenities such as three parks, a four-mile walkway, retail shops and restaurants, additional owner-occupied units as well as ferry service from Perth Amboy to New York City, none of which has been created."
Jared Kushner, husband of Donald Trump's daughter Ivanka, was already excused from testifying in the suit, NJ.com reported in January (see: "One of the Kushners will have to testify in N.J. fraud case," by Craig McCarthy). "Jared Kushner will not be pulled away from his new duties in the Donald Trump administration to testify in a fraud lawsuit in New Jersey," NJ.com reported. "His father, though, the billionaire real-estate developer who spearheaded the $600 million redevelopment project along the Perth Amboy waterfront, will be subpoenaed during the trial in Middlesex County Superior Court. The trial is expected to start jury selection next week and could last at least six weeks. Charles Kushner handed over his control of the New York-based development business Kushner Companies in 2005 following 18 felony convictions, including illegal campaign contributions and tax evasion."
California's severe drought has eased drastically as wet weather continues to soak the state. The San Francisco Chronicle has this report (see: "Only 11 percent of California remains in severe drought," by Amy Graff). "Despite the promising situation, water regulators extended conservation measures on Wednesday and will continue to do so until at least the spring as a precaution against a dry weather spell," the Chronicle noted. With storms borne on the so-called "atmospheric river" continuing to pound the state, flood has become a bigger worry than drought for the time being. But water expert Jay Lund (director of the Center for Watershed Sciences at UC Davis) notes, "California remains a dry place ... The end of drought does not solve California’s most important water problems." In a blog post (see: "California’s Wettest Drought? – 2017"), Lund points out: "Groundwater sustainability (implementing SGMA), Sacramento-San Joaquin Delta sustainability, effective ecosystem management, and fixing rural drinking water systems remain major problems. Solving these issues involves difficult water accounting, integrated management, and finance issues at local and statewide levels." Lund comments, "Despite [the current] wet conditions, California has remnants of drought, some of which will persist for decades. Some Central Coast reservoirs remain very low. Groundwater in the southern part of the Central Valley remains more than 10 million acre-ft below pre-drought levels. Most of the groundwater deficit is in dry parts of the San Joaquin and Tulare basins, which could take decades to recover – with long-lasting effects on local wells. The millions of forest trees which died from the drought will need decades to recover, if the warmer climate allows. Native fish species, already suffering before the drought, are in even worse conditions today."