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The AIA Housing and Community Development Knowledge Community (HCD) is a network of architects and allied stakeholders that promotes equity in housing, excellence in residential design, and sustainable, vibrant communities for all, through education, research, awards, and advocacy.

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Cost Escalation - anyone else working, worrying, thinking about it?

  • 1.  Cost Escalation - anyone else working, worrying, thinking about it?

    Posted 06-18-2021 11:57 AM
    I was heartened to see the "Between the trend lines" piece come out a couple weeks back discussing the increased cost of building that we're seeing nationwide. We on the HCD KC Advisory Group are in the process of doing some outreach within the KC and across the AIA members to see if others are as alarmed as we are. Some of the areas that are of primary concern we've discussed are:

    • We have significant concerns that the current cost escalations in construction materials and labor, has immediate and critical short- and long-term impacts on housing development, especially on affordable housing development, which will exacerbate the already steep existing inequities and housing shortages.
    • We are concerned that the current cost escalations in construction materials and labor, creates untenable contractual situations for a majority of architects, contractors and clients.
    • We are deeply concerned that the current cost escalations in construction materials and labor, will threaten recent successes in sustainability with the real or imagined hardships of economic pressure.
    We want to learn more about how the AIA, as a leader in professional architecture and construction (unlike peer organizations for instance AGC, NAHB, NWA) has engaged in the national conversation about current cost escalations in construction materials and labor. The piece shared by William Richards was good, but was a little vague about AIA's active work being from a policy, advocacy, or knowledge standpoint.

    Are other individuals or KCs (or practices) actively working on these cost escalation issues?

    We'd like to work together.

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    Raymond Demers, Assoc. AIA
    Enterprise Community Partners
    Boston MA
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  • 2.  RE: Cost Escalation - anyone else working, worrying, thinking about it?

    Posted 06-21-2021 05:54 PM
    I'm curious to know what can be done; economically speaking there are a few factors that have contributed to where we are at now that can be difficult to fix.
    • Because of the pandemic, lumber suppliers cut back on supply, which was a big miscalulation. 
    • Interest rates were lowered and made housing more attractive. 
    • Suburban sprawl occurred because less dense areas seemed more attractive than denser areas; thus increasing housing need.
    I sit on a board of directors of a local Habitat for Humanity affiliate and we weren't immune to this either.   It was brought up as perhaps a justified selling point in asking donors for more money.

    The futures of lumber seem to be trending downward, which is a good sign, but we aren't out of the woods (no pun intended) yet. Source: https://www.nasdaq.com/market-activity/commodities/lbs

    I think alternative means should be explored.  As many businesses move to a work from home model, perhaps the solution lies in an adaptive re-use and or re-zoning to allow business buildings to be repurposed into affordable housing.

    Dustin Goffron, AIA, LEED AP BD+C

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    Dustin W. Goffron, AIA, LEED AP+, CDT, EDAC
    www.dustingoffron.com/
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    AIA Awards Housing 2021. the book is now available on Amazon! Buy now >


  • 3.  RE: Cost Escalation - anyone else working, worrying, thinking about it?

    Posted 06-24-2021 12:22 PM

    Dustin:

     

    Unlike lumber, pricing of ready mixed concrete has remained relatively stable through the pandemic and its aftermath.  We are seeing multifamily projects being converted to concrete exterior walls, interior bearing saving between 5 and 10% compared to the costs of softwood lumber.  Check out Build with Strength for more information on first cost savings as well as ownership advantages of building with concete: www.buildwithstrength.com

     

     

    Donn C. Thompson AIA  LEED® AP BD+C

    Senior Director, Building Innovations

    Structures & Sustainability Group

    Midwest – Kenosha WI

    National Ready Mixed Concrete Association

    66 Canal Center Plaza, Suite 250

    Alexandria, VA  22314

     

    DThompson@nrmca.org

    Direct: 224.627.3933

    www.linkedin.com/in/dthompsonaia

     

     




    AIA Awards Housing 2021. the book is now available on Amazon! Buy now >