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CONSTRUCTION IN THE TIME OF COVID-19, CONT. By April 30, 2020 CREA’s active construction portfolio only had full work stoppages in-place on (11) total projects located in California, Michigan, and Pennsylvania. That is a pretty marginal impact to our overall portfolio given more than 90% of our projects were able to continue with onsite improvements. This was made feasible by both ownership and builder sides quickly rallying together to adapt to the new environment. Throughout our industry, both sides collaborated to create and implement new forward-thinking safety protocols, which will likely impact the way affordable housing is constructed for the foreseeable future. While these are not the only subcontractor bases to be impacted by COVID-19, they are certainly several of the key trades at play in ensuring project delivery timelines are met. Due to local onsite building inspection processes varying in each state, city, township or county, it has become increasingly difficult to identify potential municipal impacts on each deal. Developers and General Contractors have tried various ways to accommodate inspections while following CDC guidelines. CREA has seen various creative ways in the industry to tackle this problem, including virtual inspections and the clearing out of entire buildings for inspectors to complete their respective walk-throughs. ...continued from page 2
When a confirmed COVID case was reported of an onsite crew member, it required that individual to be removed from the property and complete a 14-day self-quarantine period, per CDC guidelines. Any personnel who had been in contact with that individual was also required to be removed from the site for at least seven days. These types of protocols clearly had an impact on the available workforce in many regions throughout the country. As a result, our industry started to see an influx of subcontractors, who previously had not focused on affordable housing projects, enter the marketplace given their respective construction sectors were not being considered essential within many states (i.e. market rate developments & hospitality). One- way owners and general contractors attempted to offset this setback on our new construction developments by incorporating a second shift into the construction schedules when permitted by local ordinances (predominately occurred on larger projects located in municipal areas). In regard to rehabilitation developments, CREA saw many general contractors utilizing resequencing measures to focus solely on exterior improvements while interior unit upgrades could not safely be completed. As noted in various publications throughout the last several months, some of the most heavily impacted workforces nationwide included: (Exhibit 1)
Throughout the country, general contractors were required to implement pandemic-specific safety plans for the first time, which allocated designated personnel to administer and enforce COVID-19 safety policies. These new safety protocols largely included health representatives being onsite to take temperatures prior to accessing property, mandatory face coverings, increasing worker wash stations, offering an increased number of sanitation stations, disinfecting high volume touch points regularly, developing designated stair towers for ingress / egress to allow proper social distancing, posting reminders for trades to self-regulate health, and developing continuity safety plans between general contractors & subcontractors.
In anticipation of looming supply chain disruptions, many general contractors began looking to secure building materials and equipment in advance of standard timelines to avoid potential shortages and price escalations.Asaresult,manyofCREA’s construction consultants started to see the availability of off-site storage warehouse locations decrease within larger markets. Consequentially, this started to impact contractor billing cycles and slightly inflate reported completion percentages on the monthly contractor requisitions (i.e. due to stored materials). The below chart specifically illustrates recent trends CREA and their construction consultants have started to see with their respective construction portfolios related to material and
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