Permitting and starts delayed by COVID-19

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More than half (53 percent) of multifamily developer respondents reported construction delays in the jurisdictions where they operate, according to the third edition of the National Multifamily Housing Council (NMHC) COVID-19 Construction Survey. Of this group, 85 percent reported delays in permitting due to COVID-19, up from 77 percent in round two (conducted April 9-14) and 76 percent in the initial survey (conducted March 27-April 1).

Survey respondents reporting construction delays also indicated a significant pause in starts, with 78 percent reporting delays, up 8 percentage points from the end of last month, and 19 percentage points from the first round.

The NMHC Construction Survey is intended to gauge the magnitude of the disruption caused by the COVID-19 outbreak on multifamily construction. Additional findings include:

  • 53 percent of developers reported a delay in construction–of those developers, the number experiencing a delay in construction because of construction moratorium dropped from 62 percent in round one to 37 percent in round three, indicating that construction activity is resuming as states relax pandemic-related restrictions.
  • While only 29 percent of respondents reported being impacted by a lack of materials, the number of respondents experiencing price increases in materials jumped to 17 percent from 5 percent and 4 percent, respectively. Despite this jump, 78 percent still report no price impact, and 24 percent of those implementing new strategies report they are sourcing alternative building materials, up 8 percentage points from the first survey.
  • Labor availability has also improved over the course of the three surveys. Seventy percent of respondents said they were not impacted by labor shortages, up from 54 percent and 57 percent in the earlier surveys. This may be due in part to the fact that 24 percent of those implementing new strategies said they were offering workforce incentives or other benefits, up from 16 percent in round two.

Firms continue to innovate in the face of challenges posed by the outbreak with 59 percent of respondents indicating they have implemented new strategies to deal with the hurdles formed by the virus’s continued presence, though this is 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.

NMHC will conduct this Survey on an ongoing basis for the foreseeable future to continue to provide an estimation of the impact of COVID-19 on multifamily construction.

View the full survey results here and a comprehensive overview of the results here.

This Survey is one of a number of NMHC-produced resources focused on the COVID-19 outbreak. Additional resources, data and materials can be found here.