Archinect - News

Hurricanes fueled decline in construction spending last month

2024-12-03T10:49:00-05:00

Nationwide nonresidential construction spending decreased by 0.4% in the month of October, according to an Associated Builders and Contractors (ABC) analysis of recent U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.228 trillion.

October’s spending declined in 11 of 16 nonresidential subcategories. For the private nonresidential sector, spending decreased by 0.3% while public nonresidential construction spending declined by 0.5%.

Table credit: Associated Builders and Contractors

“Some of October’s nonresidential weakness and residential strength can be attributed to hurricanes Helene and Milton,” ABC Chief Economist Anirban Basu said about the figures. “The storms stalled work on several projects in North Carolina and Florida and initiated a massive increase in residential repair work. Construction of new housing units is actually down slightly over the past year, while spending on renovations and repairs is up by a robust 18.5%....

Construction input prices rise 0.3% in October, led by increased energy costs

2024-11-14T14:19:00-05:00

A new report by the Associated Builders and Contractors (ABC), analyzing the U.S. Bureau of Labor Statistics’ Producer Price Index data has revealed that construction input prices increased 0.3% in October. Nonresidential construction input prices also increased 0.3% for the month.

Last month, prices in all three energy subcategories increased. Natural gas prices increased by 29.3%, unprocessed energy materials prices rose 9.9%, and crude petroleum prices went up by 7.3%. Overall, construction input prices are 0.2% lower than they were a year ago, and nonresidential construction input prices are 0.5% lower.

Chart credit: Associated Builders and Contractors

“Higher energy prices drove the increase in construction input prices observed in October,” said ABC Chief Economist Anirban Basu. “While prices for a few other materials, like concrete and copper products, also rose for the month, overall input prices are lower than they were one year ago and have fallen 5% since reaching an all-t...

September nonresidential construction spending bumped by 0.1%, led by infrastructure investments

2024-11-01T15:04:00-04:00

Nationwide nonresidential construction spending increased by 0.1% in the month of September, according to an Associated Builders and Contractors (ABC) analysis of recent U.S. Census Bureau data. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.22 trillion.

September's pending went up in half of the 16 nonresidential subcategories. Private nonresidential spending decreased 0.1%, while public nonresidential construction spending was up 0.4% in September.

Table credit: Associated Builders and Contractors

“Construction spending inched higher in September, with growth fueled by ongoing infrastructure investment,” ABC Chief Economist Anirban Basu said. “Spending accelerated in several publicly funded segments in September, including highway and street, sewage and waste disposal and water supply. The privately funded nonresidential construction segment didn’t perform as well for the month, with spending in that segment contracting for the second time in the past...

Construction Input Prices drop 0.9% in September

2024-10-11T14:34:00-04:00

A new analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data from the Associated Builders and Contractors (ABC) has show construction input to have decreased by 0.9% for the month of September. Nonresidential construction input prices also decreased 0.9% for the month.

Prices of concrete products were up 0.3% and steel miil products went down 1.3%. Gypsum products also rose 0.6% in September. Overall construction input prices are now 1.9% lower than a year ago, while nonresidential construction input prices are 2.1% lower.

Chart credit: Associated Builders and Contractors

"The decline in construction input costs observed in September was almost entirely due to a large decrease in oil prices," ABC Chief Economist Anirban Basu said. 'Certain materials, like gypsum, fabricated structural-metal products, asphalt and lumber exhibited sizable price increases for the month."

Chart credit: Associated Builders and Contractors

"While domestic freight rates are low by historical ...

Nonresidential construction spending jumps 0.1% for August

2024-10-01T13:54:00-04:00

The latest Associated Builders and Contractors (ABC) analysis of U.S. Census Bureau data on nonresidential construction spending has shown a slight 0.1% increase for the month of August.

On a seasonally adjusted annualized basis, nonresidential spending totaled $1.22 trillion. Private nonresidential spending decreased 0.1%, while public nonresidential construction spending was up by 0.3%.

"Nonresidential construction spending inched higher in August, and that’s almost entirely due to ongoing infrastructure investments," said ABC Chief Economist Anirban Basu.

Table credit: Associated Builders and Contractors

"Public spending accounted for all of the nonresidential segment’s monthly increase and has risen nearly 8% over the past year, significantly outpacing privately financed nonresidential construction activity," Basu's statement continued. "As a result of ongoing weakness in certain private subsegments, ABC’s Construction Backlog Indicator has fallen by a full month over the past y...

Construction input prices tick up by 0.1% in August

2024-09-13T10:45:00-04:00

Construction input prices increased slightly by 0.1% in August, according to a recent Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data.

Nonresidential construction input prices increased 0.2% for the month. Overall construction input prices are now 0.7% lower than they were a year ago, while nonresidential construction input prices are down by 0.9%.

Chart credit: Associated Builders and Contractors

“Construction input prices are now down almost a full percentage point over the past year,” ABC Chief Economist Anirban Basu said. “This is a welcome development for contractors, a plurality of whom now expect their profit margins to contract over the next six months, according to ABC’s Construction Confidence Index. Moderating materials price escalation, along with easing labor constraints and the near certainty that the Federal Reserve will begin lowering interest rates at its next meeting, should provide some relief to con...

Nonresidential construction spending drops 0.2% in July

2024-09-03T14:51:00-04:00

Nonresidential construction spending for July fell slightly by 0.2%, according to the latest Associated Builders and Contractors analysis of U.S. Census Bureau data published today.

On a seasonally adjusted annualized basis, nonresidential spending is now worth a total of $1.21 trillion. Private nonresidential spending decreased by 0.4%, while public nonresidential construction spending was up 0.2% in July.

Table credit: Associated Builders and Contractors

"Nonresidential construction spending declined for the second consecutive month in July but remains just 0.4% below the all-time high established in May," stated ABC Chief Economist Anirban Basu. "While Hurricane Beryl, which interrupted construction activity along the Gulf Coast in early July, contributed to the month’s weak construction spending data, the cumulative effect of high interest rates likely bears more blame. This is particularly true for nonresidential spending in the private sector, which fell 0.4% for the month and ...

Construction input prices up again by 0.4% in July

2024-08-14T15:17:00-04:00

Nationwide, construction input prices increased by 0.4% in July, according to a new analysis of the U.S. Bureau of Labor Statistics Producer Price Index by Associated Builders and Contractors (ABC). Nonresidential construction input prices also increased 0.4% for the month. Overall, construction input prices are 1.1% higher than they were a year ago, and nonresidential construction input prices are another 0.8% higher.

This ends a two-month streak of consecutive declines following six straight months of increases to begin 2024. "Despite the monthly uptick, which was largely driven by higher petroleum and natural gas prices, input prices are up just 1.1% year over year," ABC Chief Economist Anirban Basu stated.

Chart credit: Associated Builders and Contractors

"The lack of materials price escalation over the past 12 months is a welcome development for contractors, just 34% of whom expect their profit margins to expand over the next six months, according to ABC’s Construction Confidenc...

Nonresidential construction spending falls for third consecutive month

2024-08-02T13:29:00-04:00

Nonresidential construction spending dipped 0.2% nationwide in June, according to the latest Associated Builders and Contractors analysis of data published by the U.S. Census Bureau.

On a seasonally adjusted annualized basis, nonresidential spending totaled $1.21 trillion, with nonresidential construction expanding 5.3% from a year ago. Spending decreased on a monthly basis in 7 of the 16 nonresidential subcategories. Private nonresidential spending fell 0.1% in June, while public nonresidential construction spending was down 0.4%.

Table credit: Associated Builders and Contractors

“A new trend in nonresidential construction is emerging, and it’s not a good thing,” said ABC Chief Economist Anirban Basu. “Despite a bevy of megaprojects in certain parts of the nation, overall nonresidential construction spending appears to have entered a period of stagnation. The flattening of momentum has been apparent for the better part of a year, but the impact of higher interest rates, tighter cr...

Construction input prices fall 0.3% in June

2024-07-15T15:28:00-04:00

Construction input prices fell by 0.3% in June, according to the latest Associated Builders and Contractors (ABC) analysis of the U.S. Bureau of Labor Statistics' Producer Price Index. For the month, Nonresidential construction input prices declined by 0.4%. Overall construction input prices are 1.1% higher than year-ago levels, while nonresidential construction input prices are 0.7% higher.

Prices for lumber and wood products remain unchanged, while the cost of softwood lumber decreased by 0.5%, and concrete products went up by 0.4%. This is the second consecutive month of overall input price declines following a spate of consecutive increases that were recorded beginning last December.

Chart credit: Associated Builders and Contractors

“Construction materials prices dipped in June, perhaps a reflection of declining project starts in a number of construction segments and an associated dip in demand,” said ABC Chief Economist Anirban Basu. “For instance, input prices fell in the mu...

How construction costs are contributing to challenges for architects

2024-07-12T16:12:00-04:00

When we asked architects in our recent Archinect Business Survey about their economic outlook, one of the five big factors behind the architecture industry’s current economic slowdown mentioned most frequently by participants was high construction costs.

"Construction costs are exceeding even the most pragmatic estimate," the owner of a large Seattle-based architecture firm shared in our survey. Another small-firm owner in New York City said: "Construction costs are so high that they quickly outstrip the value of a project." "Clients are telling me that it is getting harder and harder to build and that costs show no sign of slowing down," another NYC architect working at a large firm told us.

When asked about clients' sentiments in the current economic environment, one respondent told us, "They are in a holding pattern," reflecting a common reality of uncertainty felt directly by many architecture firms.

Nonresidential construction spending declines 0.1% in May

2024-07-03T14:36:00-04:00

Spending on nonresidential construction nationwide fell 0.1% in May, according to a newly released Associated Builders and Contractors analysis of U.S. Census Bureau data on the industry.

On a seasonally adjusted annualized basis, nonresidential spending now totals $1.21 trillion. Spending declined on a monthly basis in 9 of the 16 nonresidential subcategories. Private nonresidential spending decreased 0.3%, while spending on public nonresidential construction was up 0.4% in May.

Table credit: Associated Builders and Contractors

“Nonresidential construction spending has fallen for two consecutive months yet remains just 0.2% below the all-time high achieved in March 2024,” states ABC Chief Economist Anirban Basu. “Much of that progress is attributable to ongoing infrastructure investments, which spurred a sizable 0.4% increase in publicly funded nonresidential spending in May.”

Table credit: Associated Builders and Contractors

“Private nonresidential spending has lagged and, after fa...

Construction input prices decline in May for the first time since December

2024-06-25T11:16:00-04:00

New analytic reporting on U.S. Bureau of Labor Statistics Producer Price Index data for May from the Associated Builders and Contractors (ABC) has documented an overall 0.9% decrease in construction input prices.

For the month, nonresidential construction input prices fell by 0.8%. Overall construction and nonresidential construction input prices are 2.1% and 2.2% higher, respectively, than a year ago. The cost of concrete decreased slightly by 0.1%, while the cost of steel products rose by 0.5%. Gypsum product prices went up by 0.4%, and decreases were also recorded in 2 of the 3 energy subcategories.

Chart credit: Associated Builders and Contractors

"For contractors, this data provides excellent news along two fronts," said ABC Chief Economist Anirban Basu. "First, construction input prices fell for the first time since December and, despite rising somewhat sharply over the first four months of 2024, are up just 2.1% year over year. Second, the Producer Price Index’s economywide m...

Nonresidential construction spending dips 0.3% in April

2024-06-04T17:12:00-04:00

In a new analysis of U.S. Census Bureau data by the Associated Builders and Contractors, national nonresidential construction spending decreased 0.3% in April to a seasonally adjusted total of $1.20 trillion. It follows March's slight increase of 0.2%.

Spending fell on a monthly basis in 10 of the 16 nonresidential subcategories. Private nonresidential spending decreased 0.3%, and public nonresidential construction spending was down 0.2% in April.

Table credit: Associated Builders and Contractors

“Nonresidential construction spending fell for the second consecutive month in April but remains just 0.3% below the all-time high established in February,” said ABC’s Chief Economist Anirban Basu. “An unprecedented increase in manufacturing construction spending has pushed overall nonresidential activity 31.9% higher over the past two years. Ongoing investment in industrial facilities as well as significant infrastructure-related outlays will keep nonresidential spending elevated despite th...

Construction input prices rise another 0.5% in April

2024-05-14T14:37:00-04:00

The latest analysis of U.S. Bureau of Labor Statistics Producer Price Index data for April from the Associated Builders and Contractors (ABC) shows a 0.5% increase in construction input prices.

For the month, nonresidential construction input prices increased by 0.6%. Overall construction and nonresidential construction input prices are 2.3% and 2.2% higher, respectively than a year ago. The cost for concrete and steel mill products decreased slightly at 0.2% and 2.7% each over April, while prices increased in 2 of the 3 energy subcategories for the month overall.

Chart credit: Associated Builders and Contractors

“Construction input prices jumped half a percentage point higher in April and have increased 3.5% over the first four months of the year,” ABC’s Chief Economist Anirban Basu stated. “While iron, steel, asphalt and gypsum product prices fell in April, oil and copper prices surged, driving the monthly increase. Rising input prices will put pressure on profits at a time when ne...

Nonresidential construction spending ticks up slightly following February decline

2024-05-01T15:40:00-04:00

An analysis of U.S. Census Bureau data from the Associated Builders and Contractors (ABC) has shown nonresidential construction spending to have increased moderately by 0.2% in March. It follows February's decline of 1.0%. On a seasonally adjusted annualized basis, nonresidential spending now totals $1.19 trillion.

Spending was up in 10 of the 16 nonresidential subcategories on a monthly basis. Private nonresidential spending increased 0.2%, while public nonresidential construction spending expanded by 0.8%. The market for residential construction, conversely, was shown to have decreased by 0.7% over February.

"Nonresidential construction spending rebounded in March, ending a streak of two straight monthly declines," ABC's Chief Economist Anirban Basu said. "The increase was entirely due to increased public construction spending; private sector nonresidential spending dipped slightly lower in March. Despite wavering over the first three months of 2024, nonresidential spending is now...

Construction input prices climb 0.4% in March

2024-04-12T11:42:00-04:00

A new analysis of the latest U.S. Bureau of Labor Statistics Producer Price Index data from the Associated Builders and Contractors (ABC) has shown an increase in the cost of construction input prices of 0.4% for March.

In the month, nonresidential construction input prices increased by 0.4%. Both overall and nonresidential construction input prices are 1.7% higher than they were a year ago.

The overall increase came despite declines in the cost of energy inputs, with natural gas prices down 37%, unprocessed energy materials down 6.9%, and crude petroleum down 0.8%.

Chart credit: Associated Builders and Contractors

“There has been growing evidence of resurfacing inflationary pressures in the nation’s nonresidential construction segment during the past two months,” said ABC Chief Economist Anirban Basu. “Were it not for declines in energy prices, the headline figure for construction input price dynamics would have been meaningfully higher. A new set of supply chain issues is emerging,...

Nonresidential construction spending declines 1.0% for February, according to new ABC analysis

2024-04-03T12:53:00-04:00

Spending on nonresidential construction declined 1.0% in February to a seasonally adjusted total of $1.179 trillion, according to an Associated Builders and Contractors (ABC) analysis of data published this week by the U.S. Census Bureau.

The figures showed a decrease in spending for 15 of the 16 nonresidential subcategories on a monthly basis. Private nonresidential spending fell 0.9%, while public nonresidential construction spending was down 1.2% in February.

“Virtually every nonresidential construction segment experienced a decline in spending in February,” said ABC Chief Economist Anirban Basu. “In certain instances, the monthly decline was sharp, including health care (-2.2%), commercial (-1.9%) and water supply (-1.8%). The optimist will likely shrug off both the January and February nonresidential construction spending declines as merely reflecting winter weather. The pessimist will proclaim this release a wake-up call to contractors and an indication that higher interest r...

Construction input prices climb 1.4% in February

2024-03-15T17:21:00-04:00

In the month, nonresidential construction input prices increased by 1.3%. Overall construction input prices are 1.5% higher than they were a year ago, while nonresidential construction input prices are a total of 1.8% higher.

The prices for softwood lumber (1.7%), concrete (0.3%), construction sand/gravel (1.0%), and insulation materials (2.1%) all rose, while a drop of 0.3% was recorded for fabricated structural steel metal products.

Chart credit: Associated Builders and Contractors

“For the last several weeks, inflation data have been coming in hotter than anticipated,” said ABC Chief Economist Anirban Basu. “This was also true for the February construction input price data, which indicated that upward price pressures are reemerging after a period of calm. Month...

Construction input prices rise 1% for January following December drop

2024-02-23T13:59:00-05:00

The value of construction input prices increased by 1% for the month of January when compared to December’s totals, according to an Associated Builders and Contractors (ABC) analysis of the latest U.S. Bureau of Labor Statistics Producer Price Index data.

For the month, nonresidential construction input prices increased 0.9%. Overall construction input prices are now 0.4% higher than they were a year ago, with nonresidential construction materials prices another 0.7% higher.

Steel mill product input prices were up 5.4%, while construction sand, gravel, and crushed stone rose 3.3%, softwood lumber 1.1%, and concrete products 0.8%. The price of gypsum products declined by 1.3%.

Chart credit: Associated Builders and Contractors

“Construction materials prices surged in January, ending a streak of three consecutive monthly declines,” ABC's Chief Economist Anirban Basu commented on the findings. “While this represents the largest monthly increase since August 2023, input prices are essenti...

Construction input prices drop again for December, driven by declines in all sectors

2024-01-16T14:43:00-05:00

The latest Associated Builders and Contractors (ABC) construction input price analysis for the month of December has registered a 0.6% decrease over November’s trend-reversing totals. Nonresidential construction input prices were down another 0.4%, with the commercial and multifamily sectors declining by 0.2% and 0.5%, respectively.

Overall construction input prices are now 1.2% higher than a year ago, and nonresidential construction input prices are another 1.6% higher. The price of softwood lumber has notably fallen by 14.6% in a 12-month span, joined by a substantial decline in the price of natural gas, which was down some 60.5% in the same time period.

Chart credit: Associated Builders and Contractors

“Construction input prices fell sharply in December,” ABC’s Chief Economist, Anirban Basu, said in a news release. “While plunging oil prices are the primary factor behind the sharp decline, most input prices were tame in 2023’s final month. That serves as a fitting end to a year du...

Manhattan’s office building spree is now ‘over,’ according to the New York Times

2023-12-29T11:49:00-05:00

Just three large office towers — of more than 500,000 square feet — are being built across New York City, with two expected to open in 2024 or 2025 and nothing else projected to go up for years. Normally, a handful of sites that size would be in various stages of construction, with at least one opening every year since 2018, according to JLL, a real estate services firm.

Due to an obvious confluence of interest rates, office vacancy records, and construction costs, the Times says Manhattan is “entering its most significant office construction drought since after the savings and loan crisis in the late 1980s and early ’90s.” Recent superlatives like BIG’s 66-story The Spiral and the Foster + Partners-led 270 Park Avenue replacement may stand as the last major realized office designs before the early 2030s. Another three proposals totaling over 3 million square feet are stuck in the approvals pipeline as of right now.

The stasis has notably led to the cancellation of the much-maligned ten-block Penn Station revitalization plan, among other significant stall-outs. A “flight” to high-quality modernized office spaces of the kind featured in 425 Park Avenue and One Vanderbilt could spark a turnaround if not for their asking price. As the report stated, some industry experts believe $200 or $300 per square foot rents might be a reality for similar buildin...

October sees construction costs decline

2023-11-16T17:28:00-05:00

A new Associated Builders and Contractors (ABC) analysis of statistics provided by the U.S. Bureau of Labor Statistics Producer Price Index data has shown a slight decline in construction input prices of 1.2% for the month of October.

Per ABC’s analysis, Construction input prices are 1.1% lower than a year ago, while nonresidential construction input prices are recorded as being another 0.7% lower. Prices fell in 2 of the 3 energy subcategories last month, propelled by a drop in crude petroleum input prices of 2.9%. Unprocessed energy materials were also recorded to be down 0.3%, while natural gas prices rose 10.9% in October. Iron and steel prices also fell by 2.3% on the month overall.

Only inputs to Industrial projects and multifamily housing construction was shown to have risen year-over-year, according to the ABC.

“The October construction materials prices report should be cheered by most contractors,” ABC Chief Economist Anirban Basu said of the report. “Yesterday’s Consume...

Construction input prices marginally increased from last month, remaining 41% above pre-pandemic levels

2023-10-16T11:50:00-04:00

Construction input prices remain marginally higher than one year ago, according to an analysis of U.S. Bureau of Labor Statics Producer Price Index data conducted by the Associated Builders and Contractors (ABC). Overall construction input prices are 0.3% higher than a year ago, while nonresidential construction prices are 0.6% higher.

According to the ABC analysis, overall input prices have increased 0.2% over the past month, driven by a 10.1% increase in the price of crude petroleum, a 7.5% increase in unprocessed energy materials, and a 0.1% increase in natural gas prices. Among the inputs that decreased in value over the past month were steel mill products (down 3.7%), softwood lumber (down 1.7%), and iron and steel (down 2.4%).

Meanwhile, the inputs that have driven the 0.3% overall increase over the past year are brick and structural clay tile (up 6.4%), concrete products (up 9.1%), and construction machinery and equipment (up 6.1%). Price reductions that have helped counter s...

Hike in fuel costs drives first increase in construction input prices in six months

2023-09-18T08:00:00-04:00

Construction input prices ticked up 1.5% in August, the first increase in six months, due to a surge in energy costs, according to a new Associated Builders and Contractors’ analysis of U.S. Bureau of Labor Statistics Producer Price Index data released Thursday.

These readings come as a shock as the flattening of costs suggested that inflation was cooling. According to a separate analysis from the Associated General Contractors of America, a major increase in diesel fuel costs in August drove the overall increase in materials prices. The producer price index jumped 34.6% last month, which is the largest one-month hike since 1990. In addition, other construction materials such as concrete and switchgear also experienced price increases.

Associated Builders and Contractors (ABC) chief economist Anirban Basu expects future readings to demonstrate excess inflation as labor costs continue to rise, aggressive spending continues, oil-producing nations limit output, and global supply chains reorganize.

New York’s School Construction Authority is preparing for a school building boom

2023-08-25T17:41:00-04:00

The body in charge of K-12 planning and construction in New York City was recently profiled by the AIA New York as it prepares for a surge in student enrollment that’s expected over the next decade.

The New York School Construction Authority (or SCA) is a specialty city agency that employs 1,100 people and is tasked with the delivery and maintenance of school buildings in the New York City Public Schools arsenal, a charge which makes it directly responsible for the well-being, safety, and learning environments of more than 1.1 million students.

With a staff that currently includes 170 architects, Stephen Zacks for the AIANY writes the SCA has a unique talent when it comes to the delivery of high-quality structures within challenging construction schedules and have become national examples of the implementation of efficient project management at...

Construction input prices have declined almost 4% in one year

2023-06-19T09:00:00-04:00

A new analysis by the Associated Builders and Contractors (ABC) has found that overall construction input prices are 3.7% lower than a year ago. Derived from new data from the U.S. Bureau of Labor Statistics Producer Price Index, the ABC analysis also found that construction input prices fell 0.6% in May alone compared to the previous month.

The drop was fuelled by a decline in all three energy subcategories between April and May, with crude petroleum falling 10.2%, unprocessed energy materials falling 7.8%, and natural gas prices falling 2.0%.

Image credit: Associated Builders and Contractors

“The headline numbers suggest broad-based deflation in construction materials prices,” said ABC Chief Economist Anirban Basu about the figures. “But the declines in input prices are less broad than meets the eye. Much of the deflation is tied to energy, steel, and softwood lumber.”

Basu noted that beyond energy, steel, and lumber spheres, there are also notable examples of price inflation. Conc...

Construction input prices drop to 18-month lows

2023-04-17T17:57:00-04:00

A new Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics Producer Price Index data has shown a year-to-year decline in the cost of construction input prices for the first time in 18 months.

Overall construction input prices are now 0.9% lower compared to March of 2022, while nonresidential construction prices were recorded as having fallen 0.6% during the same time period.

According to the Bureau’s Producer Price Index for March, Iron and Steel as well as Steel Mill Products posted the largest gains since February 2020 at 63.9% and 70.6%, respectively. Prices for Natural Gas and Unprocessed Energy Materials also showed increases. Only eight of the 19 commodities price categories showed decreases since last month, despite the month-to-month decline.

Image: Associated Builders and Contractors

“The good news is that the latest producer price index data, which show broad-based declines in both goods and service...

San Francisco could axe tiny homes proposal over cost concerns and NIMBYism

2023-02-21T13:21:00-05:00

The drama over the project provides a window into just how hard it is for the city to scale up its housing and shelter system, even as a recent report from the Department of Homelessness and Supportive Housing (HSH) estimated it would take more than 6,000 extra temporary and permanent beds to solve the crisis on the streets. It also puts into sharp relief how easily neighborhood opposition can derail a project, even when the funding and space is available — and the need is clear.

The Mission district parking lot is scheduled to become an affordable housing development with construction beginning in 2025 and the tiny homes program was expected to fill the gap. “It's always the same hand wringing,” housing advocate Sam Moss told the Chronicle. “It’s never about taking care of our homeless, it's always about how you're going to feel about what it's like to see homelessness.”

San Francisco’s desire to essentially segregate homelessness is part and parcel of previous policies such as the deeply criticized Homeward Bound bussing program enacted by Gavin Newsom during his tenure in City Hall. In total, the city has seen a decline of 15% in its homeless population since 2021. A total of 3,810 units are still projected to be needed in order to match the current demand.

Construction costs projected to see largest increase in years due to supply and demand pressures

2022-08-29T15:44:00-04:00

According to CBRE's new 2022 U.S. Construction Cost Trends report, nationwide industry price levels have posted the largest increase in years, driven by labor shortages, inflation, supply chain disruptions, the ongoing impact of the pandemic, and the war in Ukraine.

CBRE forecasts a 14.1 percent year-over-year increase in construction costs by the end of the year, an increase from last year’s 11.5 percent gain. This 2022 figure is the largest increase since CBRE began tracking cost projections in 2007, exceeding the average rise of 2 percent to 4 percent per year. Following 2022, CBRE predicts cost increases to decline back to their historical range at 4.3 percent next year and 2.9 percent in 2024 as supply chain issues, inflation, and material production difficulties ease.

“The construction industry thrives on predictability, but we continue to grapple this year with nume...