Respondents also found costs to be increasing significantly
Washington, D.C. – A record 75 percent of multifamily developer respondents reported construction delays in the jurisdictions where they operate, according to the sixth edition of the National Multifamily Housing Council (NMHC) COVID-19 Construction Survey.
Of this group, 77 percent reported delays in permitting due to COVID-19, down from 90 percent in the previous round and comparable to the results seen in the first two rounds of the survey (76 and 77 percent, respectively). Survey respondents reporting construction delays also indicated a significant pause in starts, with 75 percent still reporting delayed starts one year into the pandemic. The main reasons cited for delays in starts were permitting, entitlement, and professional services (72 percent); economic uncertainty (37 percent); and projects not being economically feasible at this time (30 percent). The percentage of responses attributing delays to the availability of construction financing decreased from 46 percent in round five to 21 percent this 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:
- Eighty-three percent of respondents reported being impacted by a lack of materials, the highest share recorded since the survey began. Correspondingly, a record-high 93 percent of respondents reported price increases in materials, an increase from the 82 percent of respondents in the previous round. Of those respondents who saw price increases for materials, 40 percent reported price increases of over 20 percent for those materials most impacted. However, 19 percent of this group only saw prices increase by 0 to 5 percent.
- Respondents reported an increase in stress around availability of labor from last round, with 36 percent saying they are impacted by labor constraints, up 16 percentage points from round five.
- The greatest share of respondents reported experiencing deals being repriced since the question was added in the fourth round of the survey, with 56 percent indicating that deals were priced up. Twenty-two percent of respondents indicated they have not faced deal repricing, down from 42 percent who indicated the same in round five.
Firms continue to innovate in the face of challenges posed by the outbreak, with 54 percent of respondents indicating that they have implemented new strategies to deal with the hurdles formed by the virus’s continued presence, down slightly from 60 percent indicating the same in round five.
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.
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is the leadership of the trillion-dollar apartment industry. We bring together the prominent apartment owners, managers and developers who help create thriving communities by providing apartment homes for 40 million Americans. NMHC provides a forum for insight, advocacy and action that enables both members and the communities they help build to thrive. For more information, contact NMHC at 202/974-2300, email the Council at email@example.com.