LITTLE DOSE OF TIME REALITY
Clearly it’s time for an honest conversation. This is for anyone planning construction projects, renovation projects, or even real estate investments that might require some improvements.
I can hear many of you already, “don’t you understand that time is money?!” Yes, we certainly do. But it appears that many people need to be a little more realistic about their expectations.
One example is the recent plethora of investors, builders and developers now facing receivership or insolvency in Canada. Most of the media articles have focused more on rising interest rates, than any other cause. https://www.heddlerealestate.ca/blog/real-estate-insolvencies-in-canada-set-to-surpass-levels-of-global-financial-crisis However, the extra time required for permits, inspections, etc… is a significant cause of rising holding costs. Some of these bigger players needed to budget MUCH more time into their planning process.
What about for us humble souls, doing a renovation, or building a home (or 8), or simply adding an Accessory Dwelling Unit? We thought we’d share a few real stories of delays we’ve seen, just within the past few years.
- A load of siding was ordered months in advance, arrived by ship, then was transferred from the port of Vancouver onto a transport truck. It was late January, 2022. You guessed it: the truck was parked, somewhere in the Fraser Valley, while that trucker went to the Ottawa Convoy protest. Result: an extra 2-month delay in getting our siding to the jobsite.
- Special tile ordered for a client, travelling by transport truck, in November 2021. All 3 highways from BC were washed out with record rains. We’ve experienced minor delays with one Highway blocked, but we’ve never seen all 3 closed. FYI, tile is really heavy, and too expensive to put on a plane. Result: about a 2-month delay. We’re still impressed with that incredible engineering feat!
- 2023 Vancouver Port Strike was “only” a couple of weeks, but the logistical nightmare that followed delayed a variety of products (plumbing fixtures, flooring, deck railing). Result: 2 weeks caused roughly 2 months of delays to get all the materials to their correct locations, and processed to us.
- Business closed its doors about midway into a project. This has happened twice to us now. Result: need to find another business to pick up where someone else left off—FYI, tradespeople hate being half-way responsible.
- Key team member in one of our subtrades died. This one is very difficult. We usually want to show compassion, but our clients only want completion.
- Business partners fought, compromising their businesses (materials or subtrades). One of our suppliers was able to pivot and survive. One of our subtrades entered a stretch of extreme difficulty, where a one-week tile job took an entire month to complete!
- Permit processes can go along relatively smoothly, then suddenly double the time it takes (for example in Calgary, with new zoning bylaws).
- Inspectors and quantity surveyors sometimes have quick turnaround times, and other times, it can be triple the wait. In one instance, a permit was delayed weeks because it was left on the desk of an employee who went to Europe on a planned vacation!! True story, but I think his colleague wasn’t supposed to tell us the truth.
- Sometimes we run into a specific material shortage. Lumber and steel are probably the most obvious in the media. But an emerging issue is global transformer shortages. Everyone wants to go electric and phase out coal, oil and gas. The ripple effect of this choice, and the concurrent effect of natural disasters is explained well in this article. https://energynow.ca/2023/11/utilities-when-they-cant-buy-transformers-energyminute/. Basically, everyone needs more access to electricity, preferably yesterday! The result that we started to see in 2022 and 2023, was a rationing and prioritizing of which projects receive new transformers or transformer upgrades (for example, when converting a single family residence into a small multi-family dwelling). At this point, Enmax has been able to move forward, https://www.enmax.com/services/electricity-services/the-current/enmax-power-ends-transformer-allocation-strategy-in-mid-november. Our client’s result was well over a 6 month delay before they were able to upgrade their service, and upgrade their electrical panel, and finally get their electrical inspection passed.
- In a country that needs millions of new homes, many people are trying to move forward. Recent stats show Canada-wide that building permits were up 22.1%, month over month, in July 2024 (residential and non-residential) https://www150.statcan.gc.ca/n1/daily-quotidien/240912/dq240912b-eng.htm. Alberta saw a 33% increase in residential permits, year-to-date, when compared to last year, https://www.atb.com/company/insights/the-twenty-four/building-permits-july-2024/. ATB has further broken down these stats into a 27% increase in single-dwelling units, and a shocking 48% increase for multi-family units! The result? Competition for materials and labour is fierce in this province!!
- Finally, it is worth remembering that weather delays are real. We are an employer committed to workplace safety. No, it is not safe to put tradespeople on a roof, at minus whatever, in a snowstorm. Typically, cold snaps only last a couple of weeks. On the flip side, forest fires and smoke/air quality are another rising concern. Those issues too will pass, and the project will again move forward. Most builders and contractors will use a little patience, rather than risk safety, for a minor project delay. Of note right now in Calgary is another dramatic slowdown in roofing, because of the hailstorm on August 5, 2024. We are already around a 4-week delay—and that was the shortest wait we could find!
So what’s our point here for people who are building and renovating? As carefully as you plan your financial contingency budget, please plan a time contingency budget. There will be a delay, somewhere, in almost every project. It is not a project management failure. Nor is there any need to panic. It’s just a temporary stumbling block if all parties are committed to finding solutions, then moving forward as efficiently as possible.
