It's time for the Fort Wayne area building season to get into full swing – as in the swing of hammers and wrecking balls and the very long necks of high-rise construction cranes.
But with the spread of the new coronavirus and the potentially lethal COVID-19 illness it causes, things aren't exactly normal.
John Caywood, commissioner of the Allen County building department, estimates permit applications dropped 10% to 15% the last two weeks in March compared to the same time a year ago – accounting for a drop of about $4 million.
That's a substantial amount, Caywood said, but not for a department that did a record $1.6 billion in permit values last year. And numbers and values have rebounded since then.
“We're pleasantly surprised,” he said. “People had to adjust pretty quickly, and they seem to have done that.”
Unlike in some other states, Gov. Eric Holcomb's stay-at-home order made the construction industry essential workers, so local construction is continuing, with a few exceptions, Caywood said. “It's not affecting building as much as you might think.”
Safety measures
But companies are having to change the way they work, and some forecast a slowdown.
“Many of our job sites have stayed open. We're thankful for that,” said J.R. Gaylor, president of Associated Contractors of Indiana and Kentucky. “One of the main things is we've had to answer to a number of safety changes on the job site.”
Crews are smaller, and they observe social-distancing rules as much as possible, he said. Companies have been staging work to allow only one crew on a site at a time, limiting visitors and staggering start times, he said.
Jamie Lancia, president of Lancia Homes in Fort Wayne, said workers are “sanitizing things and wearing masks.” Safety is the “top priority” on jobs, he said.
Lancia Homes has written customers about new work methods and the possibility of delays and is holding virtual meetings with clients, other builders and suppliers.
“I can tell you we've embraced (virtual) technology,” he said. “We had been using it for a number of years, but we're using it more frequently.”
Complications
Still, contractors have been experiencing setbacks.
Some are facing disruptions in getting materials, partly because of restrictions on working in other states, said Ian Garner, executive director of the Builders Association of Northeast Indiana.
“There are supply chain issues right now with grocery stores – construction is no different,” he said.
Contractors nationally report delays caused by suppliers in China, which make about a third of construction items, according to the Association of General Contractors of America in Arlington, Virginia. The association reported last week that more than half of surveyed contractors had projects halted and 40% had laid off workers.
Delays also may occur in permitting and inspections.
The county building department's Caywood said inspectors in some cases can use submitted photos for inspections of completed work. Some permit applications can be submitted online because of continuing upgrades in the department.
“That has worked out well. With employees working remotely, we're able to keep up with applications. We're not falling behind at all,” he said. But the department's office is in Citizens Square, which remains closed to the public, and inspectors have not been going into private homes and some occupied buildings, he said.
“We did receive notices from contractors that they were going to suspend construction for 30 days,” Caywood said, adding one was for a hotel project on the north side of Fort Wayne and the other was for some of the Glenbrook Square construction.
Both have workers from out of town who may have had problems securing lodging or food, he said.
Kim Bowman, executive director of the Department of Planning Services, said public meetings of the city and county boards of zoning appeals and plan commissions, were put on hold for March and April.
That's where developers and builders have applications for variances, rezoning and development plans approved.
The meetings typically involve dozens of applicants and their representatives and more members of the public to Citizens Square. Questions and visuals would be difficult to replicate virtually, she said.
“We can hold special meetings to get through the backlog,” she said. “It's hard to say when the next public meeting will be, given extensions of stay-at-home orders.
Some aspects of the industry are facing more disruption than others, said Chris Wright, president of the Indiana chapter of the National Association of Remodelers.
Remodelers are diverse, so roofing contractors, for example, might be hit less than kitchen renovators, he said. But the industry is disrupted.
“Remodeling is something where you're in people's personal space, and it can be very disruptive to people's lifestyles even under normal circumstances,” Wright explained. “Now you're adding additional layers with this virus that we don't fully understand yet. ... Clients don't want workers in their homes right now. They think right now it's too risky.”
Financial woes
Wright said some contractors have work lined up that they can start or resume and many have used virtual meetings to line up clients. Still, “We're going to see a gap in work a few months down the road,” he said.
That likely will mean financial hardship for contractors, he said. Clients also may be wary to start a project if they see their own finances not as secure, he added.
Gaylor urged contractors to look at their contracts to see if they can renegotiate missed deadline penalties. Going forward, he added, the industry may face difficulties with construction loans or finding investors for projects, given depressed stock market values and priority placed on virus-related loans.
He said contractors generally have about eight months of work on the books. If the virus situation continues, that could cause big problems. “If we come out of it quickly, there may not be a lot of losses. If it is a 3- to 5-year slow recovery, it will really hurt,” Gaylor said.
Caywood said even with the drop, year-to-date residential and commercial permits are above last year's. Residential permits were up by 213, from 5,183 to 5,398 and values up proportionally.
Commercial permits were up by 310 from 1,622 to 1,932, but values were down by about $55,000, meaning smaller jobs than last year.
Garner urged patience.
“Hopefully (clients) will keep being understanding of what builders are going through right now and that there are going to be certain things our of your builder's control,” he said.
rsalter@jg.net
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Contractors try working around pandemic | Local | Journal Gazette - Fort Wayne Journal Gazette
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