COVER STORY
DEALING WITH SHORTAGES
Labor and Materials Shortages Prompt NewApproaches to Building and Design FLEXIBILITY, SOLID RELATIONSHIPS, AND CREATIVITY ARE KEY TO KEEPING PROJECTS MOVING FORWARD IN 2022.
by Carmen Fields
ix-and-flippers, new home builders, and build-to-rent contractors must feel like they’re
Mischa Fischer, chief economist at Angi, said, “With so much uncertainty around manufacturing slowdowns, supply chain disruptions, scarce product availability, and volatile prices, building in flexibility and advance planning to your project is more important than ever.” To protect against protracted timelines and cost over- runs, consider these questions as you plan your project: • How can you ensure you have a solid team in place for each phase of the project, bringing together the right people at the right time, despite the current labor shortage and competition for talent? • How can you incorporate materials available locally into your project design? • What proactive steps can you take to guard your budget against increases in materials once the project begins? • Where can you build flexibility into the timeline to avoid building delays—and the subsequent cost increases and customer frustration? • Which relationships can you leverage? Each project is different, and market conditions likely will continue to change. So, as you move from one project to the next, you may need to adjust your planning process to accommodate the new realities. DESIGNAMATERIALS STRATEGY Although multiple factors have contributed to supply chain disruptions, they are primarily a result of the unexpected remodeling and building boom that occurred just as manu- facturers and shippers—both foreign and domestic—slowed or closed operations during the pandemic. Now after more than two years, many basic materials continue to be in short
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caught in an endless loop of Groundhog Day. Although many builders and rehabbers had hoped 2022 would bring some relief from materials shortages, labor bot- tlenecks, and soaring construction prices, challenges in these areas have continued unabated across the country. As the construction industry continues to grapple with these challenges, consumer demand remains strong. According to a report from the Joint Center for Housing Studies at Harvard University, Americans in 2020 spent approximately $420 billion for home improvements, and those numbers are expected to remain elevated in 2022. In terms of new construction, the pressure is just as intense: An estimated 5.24 million new homes are needed to satisfy homebuyer demand. But, real estate brokerage Redfin predicts homebuyers will face a record housing shortage in 2022, driven in part by an expected rush of home purchases before interest rates rise further. And, a November 2021 Department of Commerce report revealed the number of houses authorized for construction but not yet started had reached a 15-year high. In the face of escalating shortages, delays, and pric - es, how can building and design professionals satisfy demand and still turn a reasonable profit on projects? Flexibility, solid relationships, and design creativity are critical to keeping projects moving forward in 2022. DESIGNYOUR OVERALL PROJECT: PLANNING Design encompasses all aspects of a project, not just use of space, selection of materials, and color palette. With that in mind, what planning adjustments can you make to design your project for success?
20 | think realty magazine :: may – june 2022
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