QuickDraw’s Feet On The Street COVID-19 Update

When news of the virus emerged, our phones starting ringing with calls from our Lender clients. Like all of us in our respective spaces, they wanted to know what was happening in the field and what QuickDraw Fund Control was seeing firsthand.

On March 23rd, which now seems like months ago, we summarized what we saw firsthand in the workweek of March 16-20, 2020: The March rains have had the biggest recent impact on construction projects’ progress. On average, we calculate a 4-6-week delay, depending on the percent complete.

With the first work week under our belt under the new requirements (March 16-20, 2020), we have not seen any change in manpower and construction progress. The field is busy and has been consistently so since early Q1. This momentum, combined with four rainy weeks, has kept job site labor levels healthy.

In speaking with both our clients and general contractors, we learned that this week’s inspections were not impacted.  There was no delay with inspectors and no concerns were communicated back to us from clients. One client said that his inspector has been more lenient and helpful.

We’re seeing that cities/municipalities’ offices are operating in a reduced capacity and differently than the field inspectors.

We don’t know how or when this change may impact future entitlements and approvals.

Regarding permits and approvals, they’re unavoidably going to be impacted. City departments are operating on far less staff than normal and when work resumes, we see a bottleneck of work coming.

People are scared. Construction, quite, fortunately, is deemed an essential business and everyone is very happy to be working.

If the weather forecasts are correct, we have no rain in the next two weeks. This will be a good time to watch and see what happens. Every job site will be quite busy.

In the subsequent two weeks of March 22 – April 3, 2020, from Sacramento to, San Francisco, Los Angeles, to San Diego and the Coachella Valley we saw, spoke with Owners, Project Managers and learned the following:

“There is no change with manpower or available labor, it’s been consistent, and we are hitting all of our dates. Inspections have changed to mornings only, but we’ve made the shift and there haven’t been any problems. We’ve had no issues with suppliers and material deliveries to the site. Business (construction) is the same it was 3 and 6 months ago.” – Project Manager, Western Sacramento Valley

“There is a new order from the City of San Francisco to stop residential construction until May 3!  Many builders will have no funding next month. Yikes.” – Construction Lender, First Vice President, San Francisco

“We had so many workers show up on our job sites, we had to send them home. Since the Union construction jobs are closed, labor is in over-abundance. We had to cancel the Lunch Truck because the guys were gathering close together and not practicing social distancing. We’ve implemented the COVID-19 construction plan. All workers must be six feet apart. No two trades can be working together inside one unit. It’s added time to our construction schedules.” – Vice President Construction, discussing a 300-unit, multi-family project in Los Angeles.

“Some companies (subcontractors) have shut down for two weeks. There are no new permits being processed. No projects are being reviewed. No approvals are being issued”- General Contractor, Los Angeles.

“Manpower has drastically slowed. Guys are taking the ‘stay safe, stay home’ seriously. We have received letters (from subcontractors) that say that we will show up and work only if it’s ‘one trade one house’. Guys are scared to on the job with anyone. My construction schedule has grown 2-3 weeks. I’m scheduled to trench a new phase of houses and my concrete sub may not be here for two weeks. They’re running a limited crew. Inspectors are out working. They won’t walk with you and unless you have gloves and masks for all, they leave” – Project Manager, Indio, CA

As we have all seen, the changes in the last two weeks have been fast and significant. San Francisco shut down nearly all construction. Inspections seem to be the constant and no swings have been reported. Conversely, manpower has varied wildly. From too much, to no change, to none at all, projects are experiencing the full spectrum.

What is very consistent and at the forefront is job site safety, social distancing, sanitary facilities onsite and the implementation of a COVID-19 exposure control plan. The city of Los Angeles’ requirements and enforcement is the largest example of what’s trending in the field.

April 7, 2020
QuickDraw Fund Control