The global supply chain crisis is being felt at the base of Potrero Hill, where the opening of a condominium building called 88 im Park has been delayed by six months. The culprit? Not lumber or steel, but mirror lights, quartz worktops and duct glass.
Calvin Li of First City Development, the company leading the project, says his company considered opening the building without these surfaces but ultimately decided against it. “We don’t want to compromise on quality or the first impression for buyers.”
Virtually every construction project in San Francisco is affected in some way by the current state of the global supply chain, say developers, contractors and architects. Some, like 88 in the park, see delays. Other projects will be slightly redesigned in the middle of the construction phase, while those that have not yet broken the ground are going through far more extensive pre-planning than before the pandemic. While there is some evidence that the most acute bottlenecks may be easing, there are other signs that the current crisis may mark the beginning of a new normal for the construction industry, making it all the more difficult to find much-needed housing in the Bay Area to build.
At this point, it’s not so much about a shortage in a particular material, but about a general feeling of unpredictability in the supply chain. “The worst part is the uncertainty,” says Sam Moss, CEO of the non-profit developer Mission Housing. “Everything can be delayed in the truest sense of the word. There was no rhyme or reason for it. “
The tangled journey of the missing materials at 88 in the park illustrates this uncertainty. The building’s countertops were made in Vietnam and loaded onto a ship on schedule. The delays came from the ship waiting in port here in the United States and the shipment languishing on the dock to be unloaded. The building’s Ohio-made LED mirror lights had to wait for electrical parts from Asia. When the lights were ready, a shortage of truck drivers delayed them even further.
In response to a request from The Examiner, San Francisco-based David Baker Architects surveyed its employees and identified over a dozen materials that contractors were having difficulty sourcing that affected almost every part of the construction process. Steel and wood were sometimes difficult to come by, as were different types of insulation, certain types of windows and doors, and paint and acrylic panels for the exterior.
In response, DBA adapted some of its designs, downsizing building frames and stairs, and replacing certain plastic elements with metal elements.
For Moss and Mission Housing, the supply chain crisis has forced the nonprofit to “spend a lot more money on pre-development before the building breaks the ground”. In the long term, that could be good, says Moss. By working more closely with architects, contractors and community members right from the start of a project in detail, the client should be able to bring more security to the construction process.
Joe Olla, vice president of Nibbi Brothers General Contractors, says his company has also changed its practices in recent months, adding a warehouse to store high-demand equipment and materials like refrigerators, stoves and windows. “Gone are the days when you could basically deliver just-in-time,” says Olla. “You have a day it is delivered, it shows up, you move it to the unit or floor you want – you can’t really rely on that anymore. The delivery times are too demanding. “
Supply chain issues add an additional variable to the already difficult process of “inhabited rehab” or renovating a unit currently housing a tenant. “If their unit is torn apart and waiting for closets or whatever, it doesn’t make a happy customer or happy tenant,” says Olla.
Material delays have forced a handful of Mission Housing residents to stay in a hotel or other accommodation provided by the landlord for weeks longer than planned, in some cases. “It has a human price,” says Moss. “The thought of going back to your brand new home and waiting another two or three weeks is emotionally brutal.”
Of course, it’s not just the global supply chain that is a challenge for construction projects in San Francisco. For the development team at 88 Arkansas, it ultimately made economic sense to postpone sales by a few months. With condominium prices still bouncing off the pandemic-era lows, the project’s creditors were “okay to postpone sales later,” says Li, “because we’re seeing the market picking up.”
Natural disasters here in North America also seem to be a factor. Successive hurricanes that hit the Carolinas have “made it very difficult to get box cabinets right now,” says Olla. This year’s winter storm Uri, which caused a deep freeze in Texas and much of the south, made it difficult to obtain plastic pipes and foams for insulation. Although the nationwide shortage of truckers was sparked by the pandemic, it doesn’t look like it is going anywhere anytime soon as more people find ways to “make a living without making a living,” as Olla says .
Fortunately for professionals in this business, adapting to changing circumstances is nothing new. “One of my mentors always said that we measure things with a laser, but then we do it with a stick,” says Moss. “It sucks and brutal, but the supply chain is just the next obstacle that the affordable housing industry has to jump over.”