Coronavirus: Lockdowns slow Bay Area home construction, future projects

By Louis Hansen, The Mercury News, March 23, 2020

“Shutdowns in local government offices have distanced city planners and inspectors from developers, making the already sometimes Byzantine development process more complicated. Staff in Bay Area cities are shifting as many development functions as possible online. Residential builders and small contractors are struggling to understand and adapt to the variety of new work policies and limits forced on local governments by the coronavirus.

“‘Things will be slower,’ said Bob Glover, executive officer of the Building Industry Association of the Bay Area. But industry insiders say no one yet knows how long the delays will last.

“Much of the work needed to finish and fill a home or condo — from final inspections to recording of title — depends on government services. Bay Area cities have shuttered planning and inspection services, telling developers and contractors to call or email.

“Rosalynn Hughey, director of the San Jose Department of Planning, Building & Code Enforcement, said the office has switched to its emergency plans to keep projects going. Most planning functions are being done online or through email, videoconferencing, and by phone.

“The city is setting up video inspections for small home renovations like kitchen remodels, and plans to grant final sign-offs remotely.

“California Housing Partnership CEO Matt Schwartz said the delays could seriously impact project deadlines and financing. As the economy weakens, investors become more cautious. If bankers pull back from new investments in affordable housing, he said, bold projects to address the state’s housing needs could be knocked back on their heels.

“ ‘Right now, the dominant factor in the market seems to be fear,’ Schwartz said. ‘That could be devastating for housing production generally.’

“Developers of affordable housing say tax incentives and financing are tied to strict construction deadlines. Missing target dates could endanger projects.

“Smaller contractors are also wrestling with shelter-in-place guidelines. Despite pent-up demand for new housing and home improvements, an extended shutdown could stifle projects and lead to industry layoffs.”

Read the full article here. (4 min)