Despite Rising Construction Costs, Architects Remain Busy

People with Plans

 

The big story in the construction and renovation world is the high cost of … well, everything. But Kerry Bartini says that isn’t deterring people from pursuing her architectural services.

“Business has been super strong, especially in the Berkshires. During the pandemic, we had people calling from all over the U.S. wanting to relocate to the Berkshires. That was a big trend for us,” said Bartini, principal with Berkshire Design Inc. in Pittsfield.

She typically works on a range of single-family residences, commercial sites, and cultural institutions, but as people retreated indoors starting in 2020, specific residential trends were in play. “Second homeowners wanted new homes; we had families who had been here 30 years and wanted to renovate; a lot of locals were homebound, who were working from home and had kids attending school from home, so they did a lot of renovations — not necessarily making the space bigger, though we had that, too, but adapting the space to fit their new needs.”

Once the initial surge of that trend began to recede and inflation and supply-chain issues hit the construction world hard, one would expect architecture work to slow as well, but that hasn’t been the case, Bartini said.

“Business is still the same — we have tons and tons or work. We have a wait list: ‘yes, we can take on that job, but we can’t start for two or three months.’ But contractors are scheduling two years out, so people understand we’re really, really busy, and they’re trying to be patient.

“Even though building prices are volatile,” she added, “people are still moving toward spending more time at home. Even with the high prices, building is still moving forward, even if they have to cut a little bit of square footage in exchange for custom floors and windows, or make other changes to fit the budget.”

Curtis Edgin, a principal at Caolo & Bieniek in Chicopee, said the scale of the firm’s projects — which include a wide range of commercial projects in addition to public work like schools, colleges, libraries, senior centers, public safety, and municipal buildings — may be a bit more modest right now, but the pipeline is still strong, in some cases buoyed by federal and state stimulus money to communities.

“We’re working with several school districts, some in relation to COVID money they received, and are making improvements to facilities based on that,” he said. “We’re fairly diversified in our projects, which is good. We also have some private clients. Though, with interest rates going up now, we’ll see how that shakes out.”

Architecture, engineering, and construction (AEC) executives are generally optimistic about where the market is headed as 2022 progresses. The Engineering News-Record’s Construction Industry Confidence Index, which measures AEC executive sentiment about the market outlook, held steady in the first quarter after rising slightly from the fourth quarter of 2021. In contrast, the index declined in the middle two quarters of 2021, so optimism is definitely up this year.

Meanwhile, the latest Construction Financial Management Assoc. Confindex is up more than 19% over last year. The federal Infrastructure Investment and Jobs Act certainly gave it a boost, with states and communities receiving a new surge of funding to invest in infrastructure and building projects. That, combined with movement on a glut of backlogged projects from 2021, is raising optimism, as the first-quarter Confindex survey showed 64% of respondent firms reported a greater backlog of revenue relative to a year ago.

 

From the Ground Up

Jim Hanifan, another principal at Caolo & Bieniek, said the firm’s diversity of projects has been a hedge against economic cycles, but so has its expanding geographic diversity, with recent projects spanning the entire state, from Richmond to Marshfield. “It’s nice — we do quality work in our immediate area, and it starts to grow, and people further out appreciate it.”

The past couple years saw a slight slowdown in the pace of projects, he added, but things have picked up since.

“We definitely saw some supply-chain issues; lead times for a lot of equipment, especially electrical and metal, mechanical units, things like that, used to be one or two months, and now it’s six months and even a year on some components.

“That’s forced everyone to look at schedules,” he went on. “The public schools now have to think way ahead. They’re not planning for this summer; they’re planning for the following one. You can’t get the product this summer, so you have to push it off to the following year. With questions about budgeting and cost estimates, where will it be 12 months from now? That’s a challenge.”

There’s no good answer to when — or whether — the more complicated equipment needed to build projects once architectural designs are complete will start to become more accessible, Hanifan added, and keep projects from being pushed off too far. “No one knows whether this will be the new normal.”

While the pace of business can cycle, so do design trends, said Bartini, whose firm collaborates with Bradley Architects Inc., led by principal Robert Harrison, under the combined name of Berkshire Bradley.

For example, in the residential realm, “it used to be that, in the primary bathroom, everyone wanted a tub and shower separate. Now, nobody wants the bathtub — as long as there’s a bathtub somewhere in the house, nobody wants a bathtub in the primary bathroom, which gives us greater flexibility of space.”

In kitchens, walk-in pantries and oversized working islands are in, while waterfall countertops are on the wane. Task lighting is popular throughout the home as well. On the exterior of the home, black windows are in, black and white color schemes dominate, and modern farmhouse design continues to be hugely popular in the region.

“For siding, for a lot of people, board and batten is back, and people are mixing up horizontal and vertical siding on the same house,” Bartini said, “which is a really smart thing to do as it gives the house a little character without breaking the budget.”

And, of course, “more clients are coming to us looking for their homes to be green. Unfortunately, though, that’s usually the first thing that gets cut when you start talking numbers. When building prices are through the roof, they might not do the $40,000 solar panels. They’re getting savvy thinking about sustainability, but we’re not at a place in the market where those items always make it through to construction.”

Edgin agreed, reporting the same conflict between growing interest in sustainability in commercial and public properties and the realities of budgeting.

“The sustainable aspect is a given these days. The question is, how far do they want to go with that? How much are they willing to invest?”

Clients should consider the long-term cost savings of sustainable systems, he added, but they don’t always act on that.

“There are a number of things people can do that are more expensive initially, but over the life cycle, the cost savings are great,” Edgin said. “But if they’re only budgeting based on bid day and the construction period, they want to keep it as low as possible. That’s not a long-term view, and it’s not as good for the environment. So they have to decide: are they committed to spending a little more money now to go all in? Or do they just want to talk that way?”

Maintenance budget is another factor when considering sustainable building and systems, Hanifan added.

“These are very elaborate and energy-efficient systems, but if you’re a small town and don’t have a large maintance staff, you’re not going to be able to keep up with the systems, where a larger city has a facilities department that can expand and keep up with more numerous and complex systems,” he noted. “It may show great payback and be worth the capital investment, but if you have to bring in outside people every time for general maintenance and repair, the savings can get depleted really fast.”

 

Through the Roof

Despite the uncertainty about project scheduling these days, Edgin said, clients still want the design work done now. But fluctuating material costs over the life of a project remain a daunting factor.

“If you talked about something a year ago and you’re now bidding it, and you haven’t updated your budget, there is risk there unless there is sufficient contingency money,” he added. “Some materials went through the roof and then tapered back closer to their original norms, but are not quite there yet. Lumber went through the roof but came back down — but not all the way down. Better than it was six months ago, but certainly not what it was two years ago. Steel, same thing.”

Despite the economic challenges, Bartini said, it’s full speed ahead at Berkshire Design, particularly on the residential side.

“We’re always pretty busy, and we still have the same kind of mix — maybe three new houses go up a year, and the rest is additions, renovations, or a combination of both. We’ve had a lot of new construction despite the fact that building prices are through the roof.”

 

Joseph Bednar can be reached at [email protected]