Construction costs climbing and materials, even toilets, in short supply: Here’s what local builders are saying

Linhko Contracting carpenter Ronald Coroner guilds a bucket of concrete to the second floor of The Monument Apartments building under construction at 140 East Monument Ave. Monday June 7, 2021. The workers start at 6 a.m. and work till 2:30pm to avoid the heat of the day. JIM NOELKER/STAFF PHOTO
Caption
Linhko Contracting carpenter Ronald Coroner guilds a bucket of concrete to the second floor of The Monument Apartments building under construction at 140 East Monument Ave. Monday June 7, 2021. The workers start at 6 a.m. and work till 2:30pm to avoid the heat of the day. JIM NOELKER/STAFF PHOTO

Lumber, paint, steel and copper among items where costs are rising

Rising construction costs and unavailability of materials are giving some in the construction industry a headache.

Some materials are on backorder and not able to be delivered on time for the project. The cost of lumber is adding tens of thousands of dollars to the total cost of a new home. Even toilets are on backorder.

But that has not slowed down demand for building new homes in the Dayton region, said Eric W. Farrell, CEO of the Home Builders Association of Dayton, the local trade association that represents the interests of the residential construction industry in the Dayton region.

Construction workers applies insulation to the side of a large building on Brown St. Wednesday June 16, 2021. Jim Noelker/Staff
Caption
Construction workers applies insulation to the side of a large building on Brown St. Wednesday June 16, 2021. Jim Noelker/Staff

Farrell said the number of new permits filed for houses in the region rose by about 95% between April 2020 and April 2021. It was also the most permits filed during the month of April in the 15 years since the Home Builders Association of Dayton has been tracking data.

Historically low interest rates and an influx of cash from stimulus checks may be driving some of the demand for housing, Farrell said.

The cost of materials also is causing problems in the commercial building industry. Montgomery County is asking for new bids for the planned Trotwood municipal court, after bids came back about 10% higher than anticipated. The county also increased its budget from about $5 million to $6.3 million for the building.

ExploreDelayed courthouse in Trotwood moving closer to construction

“Construction, as everybody knows, is a little volatile right now,” said Tyler Small, assistant Montgomery County administrator, during Tuesday’s Montgomery County commissioners meeting. “The bids came in all higher than the engineer’s estimate, so we’re forced to go back out for additional bids at a higher estimated cost.”

Small added, “A lot of that’s related to steel prices as well.”

John Morris, president of Ohio Valley Associated Builders and Contractors, said prices for steel, copper and aluminum have risen between 20% to 30% in the past year. Lumber prices have also increased dramatically, adding about $36,000 to the costs of a new single-family home, according to the National Association of Home Builders. But because more than one cost is rising at once, that’s adding a lot of cost to building new.

ExploreRecord-high lumber prices affect suppliers, new homes, DIY projects

“You have to go back a long time before you can see prices rising this rapidly, and really across all sectors,” Morris said. “The headlines are focused on the residential sector but it’s having a major impact in the commercial and industrial sector as well.”

He noted people are now seeing the effects of factories shut down last year due to the beginning of the pandemic, as well as a worker shortage.

Morris said that is also causing some contractors to hesitate before committing to the costs. Suppliers are depleted and buying new inventory at higher prices, which means a contractor will be lucky if they get a fixed price on a piece of material for a few days.

A construction worker applies insulation on a  large building under construction on Brown St. Wednesday June 16, 2021.
Caption
A construction worker applies insulation on a large building under construction on Brown St. Wednesday June 16, 2021.

Construction costs used to have fixed prices for three to six months. The typical lead time for a contractor in the commercial sector is six to eight months out.

“A lot of things that are happening now in construction at all levels is, yes we want to build the project but we really can’t tell you what it’s going to cost because we don’t know the material cost, and we don’t know when we’re going to get it,” Morris said.

But both Morris and Farrell said it’s unlikely that the building boom will end soon.

“I think our builders are planning to continue to ride this wave of momentum,” Farrell said.

Contact Eileen McClory at 937-694-2016 or eileen.mcclory@coxinc.com.