More than half (57 percent) of multifamily developer respondents reported construction delays in the jurisdictions where they operate, according to the fifth edition of the National Multifamily Housing Council (NMHC) Construction Survey.
Of this group, 90 percent reported delays in permitting due to COVID-19, the greatest share to indicate delays since the inception of the survey in late March. In comparison, 83 percent of respondents reported permitting delays in round four (conducted July 6-15), 85 percent in round three (conducted May 11-20), 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 77 percent reporting delays. The primary reasons cited for delays in starts were permitting, entitlement and professional services (67 percent); economic uncertainty (58 percent); and availability of construction financing (46 percent).
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:
Over three-quarters (80 percent) of respondents reported being impacted by a lack of materials. This is an increase of 44 percentage points since last round and by far the highest share recorded since the survey began. Eighty-two percent of respondents reported price increases in materials, a much greater share than in any other round of the survey. Last round, for example, only 18 percent of respondents reported price increases. Of those respondents who saw price increases for materials, 38 percent reported price increases of over 20 percent for those materials most impacted. However, 23 percent of this group only saw prices increase by zero to five percent.
The majority of respondents reported pausing at least one construction project since mid-March—26 percent reported that they’ve paused projects but will definitely resume, nine percent have paused projects with uncertainty around resuming and an additional 31 percent paused operations earlier in the pandemic but have since resumed.
Respondents have reported less stress around availability of labor than in previous rounds, with just 20 percent saying they are impacted by labor constraints, down 19 percentage points from round four.
Firms continue to innovate in the face of challenges posed by the outbreak, with 60 percent of respondents indicating that they have implemented new strategies to deal with the hurdles formed by the virus’s continued presence, up slightly from 52 percent indicating the same in round four.
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.