Coronavirus Causing Construction Delays

Image courtesy of Nick-D via Wikimedia Commons

A new survey conducted by the National Multifamily Housing Council to determine the impact the COVID-19 crisis is having on multifamily construction found more than half of respondents reporting delays due to shutdowns and most (76 percent) had difficulty getting permits.

The survey, which will be conducted on a bi-weekly basis for the foreseeable future, also determined about 41 percent said labor constraints caused by the COVID-19 outbreak were also affecting construction operations. NMHC collected 135 responses from leading multifamily construction firms from March 27 through April 1 for the first round of what will be an ongoing survey.

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“We began the NMHC Construction Survey to gain a better understanding of how the COVID-19 outbreak is impacting the multifamily construction sector. What was surprising was not just how quickly wide swathes of the industry have seen significant impacts, but how creative firms have been in deploying new strategies to keep projects going while also keeping their employees safe,” Caitlin Walter, NMHC vice president for research, told Multi-Housing News.

When asked if they were experiencing construction delays in the jurisdictions in which they operated, 55 percent responded yes and 42 percent said no. For those who reported construction delays, the survey asked if they had experienced delays in permitting and 76 percent said yes compared to 18 percent that reported no permitting delays.

NMHC asked if the delays were caused by construction moratoriums in their areas of operations and 62 percent said they were with 38 percent responding no. Respondents were asked if the moratoriums included multifamily construction and 82 percent said yes and 13 percent said no. Those moratoriums are occurring in states like New York, where Gov. Andrew Cuomo announced March 27 that most construction was considered non-essential work, shutting down most residential and commercial building projects around the state that is the U.S. epicenter of the COVID-19 crisis. Work on affordable housing and hospitals were allowed to continue along with infrastructure and transportation projects and emergency repairs.

The survey also asked if respondents were impacted by a lack of materials and three-quarters (73 percent) reported no compared to 24 percent who responded yes. They were asked if prices were increasing on materials and most (88 percent) said no with only 5 percent saying yes. The survey looked at possible labor shortages and 57 percent reported the pandemic was not impacting the availability of labor compared to 41 percent who said no.

Crisis Strategies

NMHC asked if the multifamily construction companies were implementing new strategies to deal with pandemic-related issues and 73 percent said they were with nearly a quarter (23 percent) responding no new strategies were being used. Use of technology like drones to replace in-person transactions like inspections and approvals had the highest response with 67 percent. Here are some of the other strategies the developers noted:

• 52 percent said they were staggering shifts to reduce on-site exposure to workers.
• 43 percent said they were sourcing materials from alternate locations.
• 16 percent said they were sourcing alternative building materials.
• 14 percent said they were offering workforce incentives and other benefits.