Construction Delays Remain a Consistent Theme throughout Pandemic

NMHC has tracked consistent delays throughout the course of the COVID-19 crisis, but the obstacles they’ve faced have evolved over time.

By Claire Gray, NMHC Research Associate

The COVID-19 pandemic has affected the way in which all sectors of the multifamily industry do business – including the construction sector. Since the onset of the pandemic, NMHC has conducted a series of surveys aimed to help the industry stay on top of changing construction market conditions. Although respondents have consistently reported delays in construction, the obstacles they’ve faced have evolved in line with the evolution of the pandemic.

The first round of the survey was conducted March 27-April 1, 2020, and collected 135 responses, while the most recent installment was conducted July 6-15, 2020, and received 61 responses.

Over the course of the survey, the majority of respondents consistently indicated that they have experienced delays in construction [Figure 1], including growing delays to permitting and starts on the whole.Towards the beginning of the pandemic, the delays were often the result of a construction moratorium in the jurisdictions where construction and development firms operate. However, by the time we released the most recent round of the survey, residential construction and related workers eventually came to be deemed essential and moratoria in place expired—therefore no longer posing as an obstacle [Figure 2].

Figure 1: Bar chart showing the percentage of respondents experiencing delays in construction

Figure 2: Comparison of the three rounds of NMHC's construction survey showing the percentage of respondents that experienced delays related to construction

As the pandemic progressed, the hurdles faced by those in multifamily construction have shifted to include greater impacts to materials. Since the first round of the Construction Survey, respondents experiencing a lack of materials has increased 12 percentage points (from 24 percent to 36 percent). While only a handful of respondents reported price increases in materials in the first two iterations of the survey, by the fourth round it had increased to 18 percent (from 5 percent in round 1 and 4 percent in round 2). Lumber, in particular, has been cited by many of those respondents seeing price increases. [Figure 3]

Figure 3: Comparison of the four rounds of NMHC's construction survey showing the percentages of respondents who reported impacts to materials.

We continue to monitor the impact of COVID-19 on multifamily construction and hope that the worst is behind us. Any additional delays or shutdowns will further exacerbate the existing underproduction of all varieties of housing.

Construction Delays Remain a Consistent Theme throughout Pandemic

August 21, 2020

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