Feet on the Street – The Latest 5/19
It’s like navigating a shipping lane, and your GPS went out. You know where you are and where you’re going, but the map and weather forecast are gone. Everyone’s trying to figure it out.
For this edition of “Feet on the Street,” our content comes from two successful, veteran companies: one general contractor and one plumbing and HVAC subcontractor who are doing a great job of navigating the ever-changing landscape that is construction. We hope you enjoy!
COVID-19 compliance continues and is settling in across jobs, as the weather has warmed up and the rainy season is behind us.
We visited and spoke with clients in Nevada and California.
How COVID-19 Best Practices Go Beyond Physical Safety
Oakhill Construction is the best example of a company getting ahead of the curve that we’ve seen to date. From the very early stages, Ben Salisbury, the company’s founder and principal, took a proactive approach. He knew the plan must be comprehensive, so he researched OSHA, CDC and NAHB data, laid out a detailed prevention plan, spent significant money buying PPE and implemented it right away.
When you walk up to an Oakhill Construction site, signage is at the forefront. You are given gloves and a mask to wear. You are required to log in. Here’s the kicker, and what other jobs are not requiring: Everyone who shows up for work gets their temperature taken and receives a sticker. This information is logged as well.
Social distancing protocols are followed.
Jobsite toilet service was increased by double. The wash stations and toilets are disinfected multiple times each day.
“As a result, multiple trades working together are okay,” says Salisbury.
When asked if workers were fearful of having their temperature taken and complying with multiple requirements, he said, “No and, actually, they feel safer working here.”
Think about that for a minute.
Reducing people’s fears, i.e., not having to wonder if the person they just passed might get them sick, allows them to focus more on their work and positively impacts productivity.
Getting building inspections was the next hurdle to overcome.
In mid-March, when inspections were requested, Oakhill was told, “Sorry, we’re shut down.” Ben believed this was unacceptable and spoke directly with municipalities that were unresponsive. He described Oakhill’s prevention plan steps and protocol in detail to the senior inspector who, at the end of the conversation, said: “Okay, and I’m using you as the guinea pig.” Oakhill Construction’s prevention plan is now the required standard in the city.
At the start of the “Safer at Home” order, construction schedules were initially impacted, but through his and his team’s efforts, they quickly rebounded. For weeks now, Oakhill Construction’s jobsites consistently see full crews.
“It’s a lot of work, but it’s giving the subs more comfort. Rain, not COVID-19, was the biggest hiccup that impacted our schedule. We’re okay.” Bravo Ben!
Metal plants are temporarily down.
Public Builders & Project Starts:
“Everything’s on the table.”
“In Las Vegas, continued and, in one case, third-round staff layoffs at publicly traded homebuilding companies.”
From a Veteran Subcontractor’s Perspective:
This market downturn is not the first rodeo for this Inland Empire-based subcontractor. It has survived and thrived in market cycles dating back to the 1980s. A large percentage of its revenue comes from publicly traded homebuilders, and here’s what its COO shared with Feet on the Street:
“Every industry is figuring out how to open back up. It’s all different. Think about it; the builders need to figure out how to get sales. Currently, buyers can’t walk a model complex. We’re waiting to see how it cuts through that barrier.”
“The consensus out there is we will ease into opening back up in late May. Any group affair is done in 2020. The Pacific Coast Builders Conference has been canceled.”
“Most of our competitors, including us, have 50% of staff working in the office.”
Regarding the COVID-19 rules and jobsite protocol: “Everyone is major-league up. No one is moping around, and most companies well-embraced the regiments.”
“Builders are looking for 10% price reductions. We’ve been giving back 0%-2%. There’s just not 10% to give.” They’re also in C.Y.A. mode, stating we (subcontractors) are responsible for this requirement and that requirement. We’re pushing back. ‘These are your jobsites, your toilet facilities, your water and your soap.’”
“We’re putting our clients on notice regarding delays. There’s a force majeure provision in every contract, but we need to make sure that in the event someone digs in and their attorney interprets the situation differently, we’re covered.”
“As a group (of Southern California-based subs), we’ve all seen a 50% reduction in April housing starts.”
We’ve also learned that some companies are building full phases.
“In Las Vegas, a subdivision is being completely built out and the completed homes are put on the market for rent. The thought process is that today we can’t sell them at a typical pace, so we’ll build, rent and hold until we can sell a future date.”
The psychology of COVID-19 compliance; factory shutdowns; virtual home sales; layoffs; price reductions; and build to rent.
Every week, we are grateful for your time and help in making this important information available to our industry. Stay the course, safe and healthy!