Picture it – February 2020. Business is booming and the construction industry is no exception. Things are running smoothly. Standard operating procedures are in place. Timelines are consistent, averaging 18-21 months for the completion of a multifamily development. Developers, suppliers, partners, they all know what to expect. Of course, the usual hiccups occur. There are always labor challenges, but that is mostly due to high demand and high business volume. There are simply not enough skilled and dependable partners to go around. Even the supply chain is humming along. Construction companies and suppliers can get the materials they need when they need it, and then plan accordingly.
We all know what happened next. Boom! Enter the world of COVID. Almost everything stopped and initially, no one knew when and if things would start again. People were working and business continued, but it was slowly, and with hesitation and uncertainty. When or will everything close? Fortunately, the construction industry never faced a complete shutdown, at least not in Florida. The government identified the construction industry as an essential business, with building and new developments starting back slowly. It was time to embrace what we all called “the new normal”.
What did LandSouth do? We adjusted and made some changes. Health and safety were at the forefront. This called for new protocols and steps to protect one another. LandSouth, like many other construction companies, experienced exacerbated labor challenges. People were afraid to work, sick, or facing challenges with quarantine and the inability to work. The construction industry wasn’t the only one facing these challenges. As the pandemic continued, everything ballooned, and supply chain issues began to appear. Items weren’t available, or it was going to take much longer to get needed materials. Prices began to increase. Plus, some new, never-before seen delays began to occur. There were increased issues with bureaucracy. Government inspections took longer and were often difficult to schedule.
The struggles and concerns were very real as we entered the world of COVID. However, there were some surprising benefits. We had been working and moving so fast to keep up with the demands of a growing business and industry. Reviewing and revising processes and procedures was a luxury. Suddenly, we could slow down and take a serious look at how we did things as well as the people doing them. We could identify new strengths and opportunities within our greatest resource – our people. We talked with our teams and updated our processes based on their feedback. Employee development became a key focus as we invested more in our people, helping them develop and enhance their skills. As we traveled this new path, the LandSouth team became closer and more committed to the LandSouth mission. In the end, we found more good than bad.
Over the past two years, business has increased, and now we find ourselves back to the high demand and fast pace that existed prior to 2020. A lot feels familiar and the new processes and upgraded training has led to efficiencies and a happier workforce. As familiar as much of this seems and with all the improvements, there are still differences that are part of this new world of operations.
Labor Shortages and Issues
This has always been a struggle in the construction industry. Unfortunately, there remains a lack of high-performing, dependable subcontractors with the necessary skills. The best subcontractors can be selective about the jobs they accept and demand higher rates. Those subcontractors continue to increase as demand and prices go up, contributing to significant inflation since the beginning of the pandemic.
It’s not just a lack of subcontractors. Inspectors play a critical role in the construction process. Reliable inspectors are not always easy to come by. And the availability of government inspectors is still uncertain. Inspections are key to meeting construction timelines and moving to the next step.
The solution in the new world of operations – we recommend developers choose more private inspectors to keep things moving. It increases the cost, but it’s better than missing milestones and delaying completion.
Supply and Demand
The housing market has changed dramatically in the last several months. There is a population shift and certain markets are booming – particularly in Florida and throughout the southeast. Multifamily developments are in high demand and building continues to increase. People are seeking less-crowded communities, and high-end multifamily developments deliver just that.
What does this mean? Well, people are seeking more amenities and larger units as more and more people are working from home. They need office space, but also want a place that feels livable. And this increased demand leads to the need for more supplies, which were already experiencing shortages and delays. These supply chain issues are impacting timelines, making them longer.
Supply Chain IssuesNothing has changed more for the construction industry than the supply chain. We’re accustomed to labor shortages, but prior to the pandemic supply issues were less common. The shortage of key materials continues to grow. Several of these materials are critical in the construction process, and when they are delayed construction processes can’t move to the next step. It’s no longer just lumber that’s in short supply. What materials?
• Appliances – in fact, it’s up to a nine-month lead time. It used to be four months.
• Windows – sometimes windows can now take up to a year to come in.
• Water heaters
• Plastic and iron piping
• Post-tension cables
It goes beyond reduced supplies. Shipments arrive in staggered deliveries. Everything is a moving target, making it difficult to create and meet timelines. Plus, these materials are frequently coming from other countries with varying responses to COVID and differing guidelines.
Supply issues also reflect the labor shortages. The supply companies and partners are experiencing the same labor issues. Finally, these labor shortages impact other parts of the supply chain – closed ports and transportation delays, meaning materials aren’t getting where they need to be when they need to be there. Add increasing costs and ongoing inflation to the supply chain issues, and we have a mess that isn’t likely to resolve itself soon.
LandSouth will work hard to continue to adapt to these challenges, the expected and the unexpected. We remain focused on always delivering the best-in-class multifamily communities. Part of that is continually looking for solutions to these new problems. Coming next, we’ll share more about the creative methods we use to tackle these challenges and continually deliver for our clients.
ABOUT LANDSOUTH CONSTRUCTION…Building Ideas
LandSouth Construction, the Southeast’s premier general contractor, specializing in multifamily, senior living, and mixed-use development, was named one of Engineering News Record’s Top 400. Since 1998, LandSouth has transformed ideas into best–in–class communities. Headquartered in Jacksonville, Fla. LandSouth has completed more than 25,000 multifamily units. For more information, call LandSouth’s Marketing Coordinator, Kaley Robinson, (904) 760-3188, or visit www.landsouth.com