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Delays Hit More Than 50% Of Apartment Construction Firms

A majority of companies doing multifamily construction projects are experiencing delays because of the coronavirus outbreak, according to a new survey by the National Multifamily Housing Council.

Construction continues in suburban Atlanta despite the coronavirus pandemic, March 25, 2020.

Fifty-five percent of firms with ongoing projects said they were already facing delays when surveyed between March 27 and April. As yet, 42% of construction firms surveyed report no delays, with 3% offering no opinion, according to the NMHC, which surveyed 135 companies.

Of the developers already facing project delays, 76% said it was at least partially as a result of permitting backups. Sixty-two percent reported they were held up by local restrictions.

Less than half of respondents (41%) said outbreak-related labor constraints were affecting construction operations, and only about a quarter of respondents said a lack of materials is affecting their construction operations.

The impact of the pandemic is cascading throughout the construction industry as a whole. Forty-five percent of contractors reported experiencing project delays, according to a survey by the Associated General Contractors of America taken March 23-26. 

“Most of the shutdowns that we're hearing about … are coming because owners are halting and delaying their projects, moreso than we're seeing government officials putting shelter-in-place orders that include construction,” Associated General Contractors of America spokesperson Brian Turmail told Bisnow.

In a few markets, however, state action has stopped — or tried to stop — construction activity. After deeming construction essential earlier in March, New York Gov. Andrew Cuomo later ordered work stopped at construction sites through the end of April, with the exception of hospitals and homeless shelters. 

There has been pushback against the action, with the state receiving more than 900 appeals of Cuomo's order the day after it was issued, including residential projects, the New York Times reports.

In Washington, Gov. Jay Inslee said residential construction isn't essential and should immediately cease, clarifying an order he previously issued. Many in the industry did not heed the order right away.

Whether facing state action or not, 73% of the respondents of the NMHC survey said that they are undertaking new strategies to deal with the problems posed by pandemic-inspired delays.

Forty-three percent of the respondents planned to source materials from alternative locations, 52% said they are staggering work shifts to reduce on-site exposure to the coronavirus, and 67% said they were using various kinds of tech to replace in-person transactions, such as inspections and approvals.