Most Developers Facing Construction Delays: NMHC

The organization's latest survey shows 83 percent of delays were due to permits.

Almost all of the apartment developers that responded to the National Multifamily Housing Council’s latest quarterly survey on construction said they experienced delays. Out of the 97 percent of respondents that reported seeing delays, 83 percent of them said it was due to permits, while 93 percent of them reported delays in starts.

The NMHC’s Construction Quarterly Survey was conducted from June 6 to 23 and received 30 responses from multifamily construction and development firms. With nearly all respondents facing construction delays, the survey found that labor availability and rising material costs were also seen almost across the board.

The survey showed that 53 percent of its respondents reported that labor costs increased as expected in the last three months. An additional 40 percent of developers said that labor costs increased more than expected.

Developers reported a similar trend with rising material costs. According to the survey, 83 percent of respondents said that deals for materials have been repriced up over the past three months. According to the survey, electrical components were up by 12 percent, exterior finishes and roofing saw an 11 percent increase, insulation was up by 10 percent, and appliances saw a five percent bump up in costs. Lumber was the only material to see a five percent drop in costs.

Data and chart courtesy of NMHC


Doug Bibby, president of NMHC, said in prepared remarks that a combination of rising costs, construction delays and labor shortages are making it hard to build the necessary housing the country needs. The latest quarterly report repeats many of the same themes from the previous report conducted in March.

Bibby added in his prepared statement that the industry was also seeing regulatory barriers and rampant NIMBYism that was contributing to the construction delays. To alleviate these issues, he suggested that policymakers work with the private sector to bring down costs and address the delays.

NMHC’s quarterly report is also coming a few weeks after its study that was conducted along with the National Association of Home Builders. That study found that more than 40 percent of costs for multifamily development stems from regulations from all levels of government.

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