Urban Core Continues to Drive Apartment Designs and Construction
Light steel faster solution in fighting delays in building
However, construction costs and delays continue to throw curves at the apartment and student housing industries and prompting some developers to seek alternative construction methods to keep pace.
Some projects are staying on schedule by using light-gauge steel instead of wood-frame construction, Humphreys said. Humphreys & Partners has fielded numerous inquiries about using steel, even though it’s about $20 per square foot more expensive in five to seven-story projects.
A benefit is that steel construction doesn’t require as much framing labor and is a better option in some parts of the country.
Humphreys and Partners has five-story projects under way in Newport, Ky, and Fayetteville, Ark., that are using a combination of light-gauge steel and wood. Also, a seven-story student housing project under way in Columbia, S.C., is using all steel.
“It costs a little bit more, but we’re able to deliver it and build it faster than a wood-frame in some markets,” says Humphreys & Partners President Greg Faulkner.
Humphreys said the price, however, may come down because of changes in the Chinese economy and drops in the mineral market. That could be welcome news for many apartment developers who are trying to stay on schedule and within budget as the construction industry struggles to rebuild its workforce.
Momentum in 2016 could hinge on delivery of units
Humphreys said delays, largely attributed to workforce shortages, have cost some contractors, who are now quoting longer build dates to ensure projects are delivered on time.
“The biggest problem we have now is construction costs and delays,” he said.
According to the Associated General Contractors of America, construction workforce shortages are declining but most contractors remain concerned that they won’t find enough workers. AGCA said that 70 percent of contractors report having a hard time finding workers, even though the industry’s unemployment rate declined to 7.5 percent from 8.3 percent from 2014-15.
The Association also says that most firms expand to expand headcount in 2016 to meet growing private and public sector demand, which may bode well for apartment builders. According to MPF Research, delivery delays kept industry-wide occupancy tight at 95.9 percent through 2015.
MPF Research noted in the webinar that eyes in 2016 will be on how many of the 312,000 units scheduled to deliver are unveiled. Last year, completions were targeted to climb by 20 percent but actually fell short of 2014 numbers by 8 percent.
Humphreys & Partners has several projects on the boards and expects more proposals to go out for developments in the urban core. Construction prices are staying within reason; prices per square foot surveyed by the firm have consistency and uniformity.
Now a category in Humphreys & Partners repertoire, urban core projects are adding a new dimension to multifamily housing design.
“It’s interesting to see movement away from the standard wrap project,” Humphreys said.