A rush to push through multifamily projects in Portland before the effective date of inclusionary housing rules kept many metro-area architects busy in 2017. However, such a surge is unlikely to repeat in 2018, according to industry professionals.

“There is going to be a lull in housing,” Portland Design Commission Chairwoman Julie Livingston said. “We are working through all the multifamily housing submittals that came in before the inclusionary housing rules took effect.”

Those rules essentially require sizable multifamily projects to include a minimum amount of affordable units. Developers hastily submitted many plans before Feb. 1 to prevent them from being subject to the rules. That created a huge backlog of work for area architects.

“We are absolutely feeling (the impact of inclusionary housing rules),” Ankrom Moisan Architects managing design principal Michael Great said. “Of course we are on the front end of that right now. A lot of the bigger projects have slowed down or stopped.”

So what can the architecture and engineering industries look forward to next year? Some stakeholders believe developers may shift their focus outside of Portland to the suburbs. Plus, Portland Public Schools and other public agencies are expected to move ahead with projects that now have funding. The bigger questions could be whether limited availability of contractors and rising costs of materials hamper construction efforts.

In 2017, business was booming. The Portland Design Commission saw a hectic schedule, with hearings taking place at least three times per month for most of the year. At one point, hearings occurred seven straight weeks. Normally, the group holds hearings twice per month.

“Those projects all have to get through their appeal period sometime in April, May or June (2018), depending on when they were submitted,” Livingston said. “We are going to be working through the pre-inclusionary housing submittals for the next couple months, but they are slowing down. And there aren’t more housing submittals coming into the pipeline.”

Developers are looking at a variety of ways to avoid inclusionary housing rules in 2018. One is building in surrounding communities.

“You will see more development in Gresham and Beaverton,” Great said. “The scale of those projects might be a little smaller.”

But while multifamily projects may wane in Portland, public ones won’t. Voters in May passed Portland Public Schools’ $790 million bond measure to pay for modernization of four schools and safety-related repairs at virtually every school in the district. Madison and Benson high schools will be remodeled, and Lincoln High School and Kellogg Middle School will be rebuilt.

“There is more school work than I can remember in the past,” KPFF managing principal Blake Patsy said. “There is some big transportation work that is coming through and we are hoping to get a piece of that. If there wasn’t the school and transportation spending, we would be expecting to have a little less prosperous 2018.”

Airport and road construction projects are in the works across the country. Large infrastructure improvement legislation has passed in multiple states in the West. Firms that specialize in public works projects are already tracking opportunities.

The Port of Portland Commission has approved plans to move forward with more than $900 million in improvements at Portland International Airport over the next several years.

“I think, going forward, you are going to see a lot of (infrastructure) construction,” DKS Associates principal Randy McCourt said.

For many firms, the infrastructure work will help make up for a slowdown in residential work.

“Just here in Portland, there are a lot of significant projects, including improvements for I-205, Highway 217, the Southwest Corridor,” McCourt said. “Then there are trails and bike lanes. Portland has got major expansions going on.”

However, securing materials to build those projects became difficult in late 2017. Fires raged across California and hurricanes pounded the southern U.S., destroying thousands of structures. Reconstruction efforts put a crimp in the supply chain of materials such as shingles, gypsum and drywall. Those supply problems will likely continue into 2018 and drive already rising construction prices even higher.

“I have been sitting in a lot of meetings (focusing on) how to reduce costs,” Great said.

Meanwhile, the number of contractors available to tackle projects has dwindled. A wealth of work in Portland and across the country left contractors with a choice of projects.

“Just getting the subs is a challenge,” Great said. “It is hard to get people out to do the work.”

Building industry firms used a variety of methods to deal with the rising costs in 2017 and will continue to employ many of them in 2018. Some architects are recommending their clients build projects in phases.

“I think the construction climate for getting a project done and under budget is very challenging,” Di Loreto Architecture founding principal Chris DiLoreto said. “The pricing is a real problem.”

DiLoreto said that building projects in smaller sections allowed his largely institutional clients to maintain quality within monetary budgets. The rising costs also have made clients more willing to consider cutting-edge materials such as cross-laminated timber (CLT).

“There is more genuine interest in CLT, and I think that will continue,” Patsy said. “It is always good to have more options to present to our clients. More and more it’s being looked at.”

Also, growing needs for architects and engineers required many firms to look beyond Portland for employees. It’s a trend that is expect to continue in the new year.

“Finding good people is always a struggle,” Patsy said. “We have hired eight to 10 people last year, and most of those people are moving in from out of state. Fortunately for us, a lot of people want to move to Portland.”

For most firms, 2017 presented not only an opportunity to grow, but also meet challenges. Many businesses expect a lull in 2018, but most expect the Portland-metro market to remain strong.

“2017 was a good year,” Patsy said.” I think 2018 won’t be unlike that, barring any major catastrophe. I don’t know any reason it wouldn’t.”

The post Prospects beyond the housing market appeared first on Daily Journal of Commerce.