Multifamily Developers Report Permitting Delays, Starts Due To Pandemic

More than half, or 53%, of respondents in the third edition of the National Multifamily Housing Council COVID-19 Construction Survey report they experienced permitting and start delays, with 85% of those seeing permitting-specific delays directly due to COVID-19. 

Survey respondents also saw a significant increase in paused starts, with 78% reporting delays, up 8 percentage points from the second survey covering April 9 through April 14 and 19 percentage points higher than the initial survey, conducted between March 27 and April 1. 

There were some bright spots in the results. Of the 53% of respondents who reported delays, only 37% said that the delays was the manifestation of a construction moratorium, down from 62% during the first survey period. 

Only 29% of the respondents reported being impacted by a lack of materials, but those materials seem to be costing more. The number of respondents who said they were experiencing price increases in materials jumped from 4% during the initial survey to 17% currently. The second survey reported 5% of respondents citing cost increases. The good news is that 78% of respondents said they had experienced no price increases. 

Labor availability has increased over the course of the three surveys, with 70% of respondents saying they were not impacted by labor shortages, up from 54% during the first survey and 57% during the second. 

In order to combat the challenges posed by COVID-19 restrictions, many firms have changed their go to market strategies. In the latest survey, 59% said they had implemented “new” strategies to deal with pandemic related issues. That number is down from 73% during the first survey and 75% during the second. 

Sourcing of alternative building materials among respondents that indicated they were implementing “new strategies” was up 8% from the previous survey.

The NMHC has said it will continue to conduct this survey for the foreseeable future, hoping to measure the impact of COVID-19 on multifamily construction. The full survey results can be found here.