The COVID-19 pandemic is turning life upside down in many U.S. construction markets. While some remodelers may be able to conduct business as usual, some are taking radical steps to adapt to the fast-changing situation—while realizing that today's adaptations, like today's news, may be obsolete tomorrow.
Social responsibility. Boston-area remodeler Byggmeister Design-Build has suspended operations due to the crisis. On the company's website, Byggmeister announced, "Based on what we know and don’t know about the pandemic's trajectory going forward, we feel that shutting down construction is the socially responsible thing to do."
Byggmeister CEO Rachel White elaborated: "At Byggmeister, we spend a lot of time looking at graphs, charts, and tables. We intuitively understand the concept of 'flattening the curve.' But as a service company we also keenly understand the human element behind 'flattening the curve.' Those who can get out of the way should, so that those who need to remain on the front lines, from emergency room doctors to grocery store clerks, can do so with less personal risk and lower social costs."
"Byggmeister is blessed with a strong, resilient team, solid finances, and loyal clients," White went on. "We can take a harder punch than most remodeling companies, and thus feel that it's our responsibility to do so. We will admit that it also feels pretty scary and exposed."
In a phone conversation, Rachel White told JLC that Byggmeister had five jobs in active construction at the time of the shutdown. Of these, two in particular—a whole-house renovation and a kitchen gut-rehab—will place strain on the owners as work is suspended. But White says the clients have been understanding, realizing that the decision is for their protection as well as the protection of the broader community.
Boston authorities, coincidentally, appear to share Byggmeister's judgment: As of Tuesday March 17, Boston Mayor Marty Walsh has ordered all construction projects in the city, large and small, to shut down, reported the Boston Herald (see: "Boston construction ban instituted over coronavirus: Marty Walsh," by Sean Philip Cotter). "Walsh said all construction projects need to stop for 14 days as the city reports 33 people have been infected to date with COVID-19 as the global pandemic worsens," the paper reported.
Inspection disruption. South of Boston, builder and remodeler Jim Wollfer of Shoreline Builders is still working, but he's running into problems when it comes to inspections. "I work in multiple towns," Wolffer told JLC, "and it is amazing how differently each building department is handling permitting and inspections going forward. Most are trying to cobble together a system, but getting permits for new projects and inspections for existing projects is proving to be a challenge. Some towns are doing inspections, others in unoccupied buildings only and some are allowing photographs or video for inspections and others are not. Unfortunately in one town where we recently ripped out all but one of a client's bathrooms and need inspections this week to continue – the building commissioner won’t let his inspectors come out because the homeowners are living there. They want the house empty for two weeks before they will enter, and will not allow photos."
Problems with permitting could hold up two jobs that represent 80% of Shoreline's work for the coming year, Wolffer said—and he's fielding calls from subcontractors aware that they will get into financial trouble if the virus prevents jobs from going forward.
Communications strategy. If you're not quite ready to shut down your company's operations, you might take a page from the playbook of Case Architects and Remodelers, a large remodeling company operating in the D.C. area. Bruce Case, the company's owner, shared some recent communications to his team. Among the steps Case has taken: personal protective kits have been distributed to the field, and will be distributed to office personnel soon; all group or team meetings are being held remotely via teleconferencing; and office workers are being allowed to work from home whenever that is practical. To avoid large groups congregating in the office, Case has split its office team into two groups, one that has permission to go to the office on Monday, Wednesday, and Friday, and one that is eligible for office work on Tuesday and Thursday.
Financial readiness. For general advice on responding to the changing business environment, consider the thoughts shared by Helm Construction Solutions, a construction business management and consulting firm based in Vermont. Helm suggests starting by checking in with yourself, to assess your readiness for tough times ahead: "The old adage from the flight attendant applies here—put your own oxygen mask on first before you try to help others.... Understand your financial situation—both at the household level, and within your business. Do you have a financial cushion to support your household if your business is shut down for 2 weeks, 1 month, 2 months? You’re going to need to pay close attention to cash flow over the next few months. If your books aren’t up to date, get caught up, so you have the most accurate information possible to inform your decision-making going forward. Stay on top of invoices—get invoices out ASAP so you’re continuing to bring in cash, and follow up on any overdue invoices—the longer they sit on the Accounts Receivable list, the less likely you are to ever see that money. Pay your state and federal tax liabilities, so you’re not tempted to use that for working capital if things get really crunched. While there may be some kind of payroll tax relief in the future, you can’t count on it yet."
Moving forward. When work in the field is suspended, limiting the damage to the company becomes a pressing issue. Byggmeister's Rachel White says, "to the extent that we can, we've got to keep the underlying operations going and the planning work going so that we can try to minimize the medium-term and long-term impacts from this." The immediate impact on employees is an obvious concern: "Our field crew, of whom there are eight, are not working," says White. "Right now, those folks have mostly gone to paid leave. But we're assessing the situation daily, if not more frequently, and hoping that the federal government is going to take more aggressive action to help small businesses and help particularly hourly workers, but just workers in general."
Subcontractors are another concern. "Our trade partners are obviously worried," says White, "some much more than others. We asked people who were partway through work with us to bill us partially for work that they had completed. But my suspicion is that many if not most of our subcontractors have less of a cash reserve than we do, if they have any at all, and that many of their workers are living paycheck to paycheck."
Two hours north of Boston in Portland, Maine, Heather Thompson of Thompson Johnson Woodworks says her remodeling company is continuing to work in the field. But concern about possible exposure to the virus is already affecting her workforce: Two employees are staying home for 14 days because their domestic partners have just returned from overseas and have to self-isolate. "Another guy came in today, his dad has a sore throat and the sniffles, but no fever," says Thompson. "So he’s working by himself."
At this time, none of Thompson's jobs are in occupied houses, and she has a lot of outside work. She says, "We'll continue to work as long as we have people, we can get materials, and the state of Maine hasn’t just declared a state of emergency. But I’m also telling my employees that they need to be comfortable with what they’re doing, so if they need to stop, then they stop. And we offer 40 hours of sick/personal time, and we’re giving everyone their week of vacation available as well. So we can cover people for two weeks. But we don’t know when the [situation is going to become extreme], and it would be better to postpone that for as long as possible, I think, for them. Because then, the state has unemployment benefits available immediately for people. I think it’s 100% of salary if you have the virus, and ⅔ if you’re just not able to work for reasons related to it."
