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Lumber, lumber everywhere. Builders must wait for clean-up before they can start work in this Slidell, La., neighborhood. Photo: FEMA
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By Richard Wall
The construction community of the Gulf Coast is still seeing a kind of storm surge of its own weeks after Hurricane Katrina's departure. Commercial builders have shifted to residential jobs. Remodelers’ projects literally disappeared. Contractors are sorting repair needs like triage surgeons: patching homes together, first for the sick, then the elderly, then children, then others. The cost of projects already under contract immediately shot up, leaving contractors to eat the difference.
"The greatest issue now is the uncertainty," says Hugh Bond of Bond Construction. Bond is also president of the Capital Region Home Builders Association in Baton Rouge, La., a city that doubled in population during the hurricane evacuation and now faces its own building crises. "No one knows what the availability of materials will be or how much those prices will rise. Can we even get supplies? We’ll be competing with FEMA for materials, and we will lose."
Some smaller builders will be forced out of the market, becoming subs for larger developers, fears Louisiana Home Builders Association president Ronnie Kyle. Who’s a supplier short on materials going to sell to, he asks: an outfit that spends $10,000 a week or a guy who buys $2,000 a month? Builders without lots in inventory will be out of luck.
"We will see some contractors moving out of their normal MO," says Ron. "Whether they will be doing more commercial work or residential, more high-end or shifting to government subsidized low-income housing, this market will force them into changing their work. Probably the remodeling side will be more wide open."
A flood of variables
At this writing, each area had its own problems and unanswered questions. Should waterlogged New Orleans be rebuilt? Where would all the debris go? The storm surge along the Gulf Coast left concrete slabs and wholesale rebuilding needs. Felled Savannah pines and oaks further inland resulted in massive roof and structural damage.
Soon new IRC 2003 building codes likely will become law in Louisiana, each parish deciding when and how to implement them. Codes in other affected states could also stiffen. Contractors will have to keep up with those changes--and the accompanying higher prices.
Gulf Coast contractors need a plan B—and C and D. But progress toward sanity has begun. Building associations are meeting with government officials to devise informed strategies, and are gathering members to organize rebuilding efforts.
Following are ways contractors can cope with the uncertainty after Hurricane Katrina or any other widespread disaster:
- Go to the Florida Home Builders Association’s website, and under Resources, select Post-Katrina Assistance for advice for contractors and consumers about what to expect after a hurricane. Some Gulf Coast HBAs may set up similar websites.
- Use local HBAs and other organizations, which are plugged into government officials to provide solid information to contractors, as well savvy business advice.
- Consider building supply links outside your area, perhaps co-oping with peers. Some builders are hosting out-of-state firms in exchange for subcontracting and supplies.
- Anticipate shortages. Plywood, plasterboard, shingles, felt and studs will be scarce early on, and concrete could become so later.
- Evaluate risk exposure. Establish contracts on a cost-plus basis with inflation clauses. Explain the unpredictable pricing to customers. Check material prices frequently.
Richard Wall is a freelance writer living in St. Augustine, Florida.
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