Multifamily Firms Try New COVID-19 Strategies, Find More Labor

Originally published by: NMHCMay 26, 2020

The following article was produced and published by the source linked to above, who is solely responsible for its content. SBC Magazine is publishing this story to raise awareness of information publicly available online and does not verify the accuracy of the author’s claims. As a consequence, SBC cannot vouch for the validity of any facts, claims or opinions made in the article.

Industry survey asked multifamily construction firms how the spread of COVID-19 is affecting construction permitting, starts and completions as well as materials and labor.

This is NMHC’s third installment in a series of surveys aimed to help the industry stay on top of changing construction market conditions during the COVID-19 pandemic. The survey was conducted from May 11-20, 2020 and received 78 responses from leading multifamily construction firms. Results will be compared with the first survey, which was conducted March 27-April 1, 2020 and received 135 responses, as well as the second survey, which was conducted April 9-14, 2020 and received 84 responses. Here are the major takeaways. (Click here to view full survey results.)

More than half of respondents are experiencing construction delays

More than half (53 percent) of respondents said that they are currently experiencing construction delays in the jurisdictions where they operate, virtually unchanged from the 55 percent of respondents who reported delays in first round and 56 percent in the second round of this survey. Of this group, 85 percent reported experiencing delays in permitting (an increase from the 77 percent indicating delays in round two and 76 percent in round one) and 78 percent reported experiencing delays in starts, up 8 percentage points from the end of last month, and 19 percentage points from the first round of the survey. This time around, there was a continued decrease in share of respondents faced with construction delays attributed to the presence of a construction moratorium. Just 37 percent indicated delays from the presence of a construction moratorium, down from 40 percent in the previous survey and 62 percent in the first round.

One in four respondents are affected by a lack of materials

Twenty-nine percent of respondents indicated that a lack of materials has been impacting their construction operations, virtually unchanged from the 28 percent of respondents who reported a lack of materials last round and 24 percent of respondents in the first survey.

When those respondents affected by a lack of materials were asked to cite specific areas of issue, the top responses were cabinets and countertops (65 percent), tile/wall finishes (22 percent), fixtures (17 percent), appliances (17 percent) and elevators (9 percent). Nearly one in five (17 percent) said there have been issues with closed facilities or international sourcing, which has led some to attempt to procure more local materials. Cabinets and countertops topped the list of materials in short supply in both of the previous rounds as well, listed by 43 percent of respondents in round 1 and 42 percent in round 2.

Respondents beginning to see increases in the price of materials

While only a handful of respondents reported seeing increases in the price of materials in the first two iterations of this survey (5 percent and 4 percent, respectively), this round saw that share jump to 17 percent of respondents who indicated price increases. When asked to cite the specific materials where price increases have occurred, respondents indicated lumber (54%) and property, plant and equipment (PPE) (15 percent).

Respondents seeing less stress on labor availability

Just twenty-five percent of respondents indicated that they are still facing COVID-19-related labor constraints, down 19 percentage points from the previous survey and 16 percentage points from the first round. Similarly, nearly three-quarters (70 percent) said they have not been affected by labor availability, an increase from 54 percent during the last round.

Many (53 percent) of the operators currently facing labor constraints said that employees were not working right now either because the workers were infected or concerned about getting infected, or because they simply did not want to return to work. Other constraints cited during this round of surveying include slower re-entry of labor force as jurisdictions ease restrictions (11 percent) and the existing workers being spread thin with other labor needs (11 percent). One respondent indicated however, that they have actually seen an influx of labor due to unemployment in other industries.

Many firms are implementing new strategies to deal with current hurdles

Over half of respondents (59 percent) indicated they have implemented new strategies to deal with the hurdles formed by the virus’s continued presence – down from 75 percent last round and 73 percent in the first round – with many of those firms indicating they have implemented more than one strategy.

The most popular strategies implemented by respondents include sourcing materials from alternative locations (50 percent this round/48 percent in round 2/43 percent in round 1), staggering shifts to reduce on-site exposure (54 percent/58 percent/52 percent) and using technology to replace in-person transactions like inspections and approvals (59 percent/63 percent/67 percent).

Other strategies reported include sourcing alternative building materials (24 percent this round/19 percent in round 2/16 percent in round 1), offering workforce incentives or other benefits (24 percent/16 percent/14 percent) or changing cleaning practices and staff protocols on the worksite to ensure safety (11 percent/11 percent/6 percent). Several operators cited the usage of’ social distancing, directional pathways, and heightened cleaning and disinfecting protocols to maintain the safest work environment possible.


Check out this extra section in each digital issue of SBC Magazine for additional news, perspective, and advertiser content. Learn more and access 2016-2017 archives here.