Four ways to navigate the pricey material shortages bottleneck.

The AIBD Monday Minute, a weekly email to residential architects, designers, engineers, and builders, asked the question, “How can we navigate the bottleneck of getting projects completed when there are pricey material shortages and what should we do to help inform our clients?”

We forwarded the question to our subscribers and asked them for suggestions. Their responses were outstanding!

Before we get to the meat of the discussion, the Monday Minute includes a short video (5 minutes) that hits the highlights of this article and points to other sources for advice outside of this post.

Despite the issues, housing permits are up

The exciting thing is, the number of permits for single-family homes has been increasing almost as fast as the lumber prices.

Even with a pandemic, the AEC industries have been working their arses off. And still are from what we hear.

From January through July in 2019, there were about half a million single-family permits.

During the same length of time in 2020, permits increased to 530,000.

So far this year, there have been 587,000 permits, that’s an 18% increase.

Admittedly, that’s nowhere close to the whopping 377% that lumber prices increased in just one year. But how much has it affected residential construction?

Is it possible that we could have been at three-quarters of a million houses by August 2021? Had there not been a pandemic.

Sorry, 2021 is on backorder

A good friend of AIBD, economist Elliot Eisenberg, the Bowtie Economist, recently shared some good news. “Framing lumber prices have come down dramatically. They are down by about two-thirds from their $1,800/1,000 board feet peak earlier this year.”

The problem is that everything is on backorder. Windows, cabinets, bathtubs, appliances, ceramic tile, trusses are all unavailable, and in many cases, the wait is six and seven months.

On top of that, Delta variant outbreaks are partly because vaccination rates among construction workers are pretty low.

Regardless, Eisenberg predicts, “home starts should rise by about 175,000 this year and another 125,000 next year.”

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So, builders are pushing hard despite all the impediments, and designers are still producing house plans.

Elliot shared another key trend: “The Work From Home (WFH) phenomenon.”

Based on surveys and things he’s read, it seems that up to 20% of us will be working from home. The AIBD’s A-Team does.

That’s four times more than before the pandemic.

He thinks this is going to cause the home size to rise.

We’ll be designing more homes with a study or, at a minimum, a space that turns into a work office.

So, it sounds like our industry is navigating the bottleneck caused by pricey material shortages just fine. You be the judge

Here is what we heard from our community.

1. Stick your toe in the water.

Michael Battaglia, Michael J. Battaglia Residential Design, Ohio

The bottleneck of getting material costs and shortages are going to be with us for sometime.

It’s going to be something to contend with for some time. It may be 8-12 months before things get back to some type of normal.

Quite honestly I have been suggesting to clients that they proceed with the project and see what the numbers turn out to be. The results are usually over budget, but the exercise will result in knowing what the project costs will be in 2021.

If the design is what the client has been dreaming of, but the costs are too high, the first thing usually suggested is to see where costs can be cut.

That results in a redesign and the client having to accept something they do not want.

The long term problem facing the industry today is Building/Remodeling when the costs are so high. At some point, there needs to be an appraisal of the property.

With all the inflated costs, the properties will not appraise for what people have invested and property taxes on inflated costs will hurt the client later. Their home will not appraise for what they have into it if they decide to sell it.

My personal suggestion when asked about the issue is simply “Put it off until 2022”.

2. Communicate.

Kevin Cline, K.C. Design Services, Washington

The key is always communication.

It’s important for you to assure your potential or current client that you are making good decisions that will result in a finished project that they are going to happy with.

Being honest is paramount.

Yes, some products or even services are difficult to arrange or perhaps more expensive than one would hope, but those challenges can be met with an attitude of “doing what it takes”.

I always tell people, “I can do anything, the impossible just takes longer”.

3. Educate the client

Christopher Ely, Completely Personal Kitchens, South Carolina

I work as a “Design Consultant” and not just a residential designer. Because I was a custom home builder and remodeler – and interior designer, I can bring my expertise to my clients to help them navigate all aspects of the remodel process.

That said, all clients will appreciate a designer who works to educate them and provide guidance on their project. It makes the relationship feel like a partnership and greatly assuages their fears and gets them excited.

I have always thought of my client’s joy in their new space(s) as the true finished product and the space itself as the means rather than the end. Starting with that premise, it is impossible not to own the process.

Besides, from a purely self-interested perspective; I want to turn my clients into my sales team. The best way I know to do that is to make sure they enjoy both the journey and the end result.

It is an old bromide that people don’t care what you know until they know you care, but it is still spot on.

4. Get everyone on the same page.

Terry Cline, Dwell Right, Massachusetts

Orchestrate a meeting with all the players.

Inform them that we all are taking a risk in these volatile and crazed times.

Infinite patience brings immediate results.

What else can we do?

The bottom line?

When designing spaces for our clients, we need to balance making the design unique and appealing while respecting budgets and staying realistic with materials choices.

While there is no simple answer to these issues, designers should not hesitate to consult with their clients on how much they can afford to invest in the project.

We may be tempted to show our clients a design concept that appeals to them, regardless of cost.

But maintaining a realistic budget is the only way to avoid spending too much and eventually going over it.

Don’t be the designer who will only work on projects with unlimited budgets. And them become known for always exceeds them.

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