Wednesday, March 1, 2023

Do Labor and Materials Shortages Impact Construction Quality of New Homes?


            During periods of high housing demand, as we experienced over the past five years, supply chain disruptions affected the availability of building materials. Everything from insulation to plumbing fixtures to framing lumber has been scarce[1]. Not unknown before the pandemic, labor shortages in the construction industry only intensified with the Covid virus. In addition, falling birth rates, a slowdown in legal immigration, and early retirements created a labor crisis.[2] Demand for new homes was at an all-time high. So, how did these shortages and delays impact the quality of home construction?


            The prevalence of construction defects in new housing often accompanies periods of high demand. When sources of trained labor dry up, builders must obtain workers from unconventional sources—sometimes from the parking lot at Home Depot. The same is true for building materials in short supply. As a result, there are substitutions or changes in accepted installation practices. In addition, builders substitute lower-quality materials for traditional building products. Each factor can negatively influence construction quality. 


            The most acknowledged result of shortages in materials and labor is the cost of new housing. Builders raise the price of new homes to compensate for the expense of hard-to-get materials and delays caused by the lack of labor. But there are other consequences—some may not be discovered until after the home's sale. For example, forensic investigations of new housing often expose the shortcuts taken during construction. These are quality-control issues often not visible on the exterior of a completed building. But reports of leaks or mold, for example, in a new home will trigger intrusive inspections that reveal poor construction methods. 


            Correctly applying many modern building materials requires reading and understanding architectural drawings and the product manufacturer’s instructions and warnings. For example, waterproofing around windows must be integrated with the fins of the windows and the surrounding weather barrier to be waterproof. Architects often provide details in the plans. Manufacturers provide installation instructions, which, if followed, will usually mean that a window will not leak. But sometimes, the workers who install these parts do not have access to the drawings or are not trained in these precise building methods and “mis-lap” waterproofing materials. Instead of shedding water to the outside, it is directed into the building.


            Sealants used to waterproof windows must be compatible with the materials they touch. Unfortunately, some sealants are incompatible with adjacent materials, and instead of providing a watertight joint, they degrade the waterproofing. Other sealants are incompatible with materials used to “firestop” penetrations in walls. Sealants not compatible with the CPVC pipe used for sprinkler systems, for example, can degrade the pipe, which will eventually cause it to fail. Today, it is popular to design balconies on residential buildings with supporting beams enclosed by a soffit. This looks good, but it can also trap moisture in the beams, which promotes rot. In addition, water can enter the enclosed space when the joint where the balcony adjoins the building is not correctly waterproofed. 


            Suppose this is known to the manufacturers of these products, and they publish guidelines for their materials, which are incorporated into drawings and specifications by project architects. Then why do we find defects in building construction? Again, the training of the workers who must install these products needs to be improved, and the on-site quality control needs to be more consistent. Moreover, labor sourced from a parking lot is likely not union trained. Construction labor unions have well-known training programs for apprentices that can turn out skilled workers in various trades. That training includes instruction on following the manufacturer’s guidelines and architectural details. But union-trained labor is avoided to reduce costs or is unavailable in enough numbers.


            On-site quality control—inspections by architects, superintendents, or supervisors—can catch misapplications and mistakes in the field. But especially with production housing, there are too many locations of critical details for architects or superintendents to watch constantly. Even a tiny mistake—a joint where the sealant was not applied completely—can eventually cause internal damage. Watching over untrained workers frequently is impossible for builders, and architects are rarely on a site to observe the installation every day.


            The high demand for production housing also tempts builders to try new designs that save time and expense. Direct Applied Finish Systems (DEFS) instead of stucco. Hardboard instead of real wood siding. Foam trim instead of wood or concrete. These systems are not better quality than the products or systems they replace. But they cost less and take less time to install. Unfortunately, they are also frequently the subject of defect litigation.


            Rising home prices may have been the most immediate and obvious result of supply chain issues and labor shortages. Still, the impact will be most noticeable in the long term as shortcuts and mistakes made during construction subject parts of a building to moisture intrusion or degradation from incompatible materials. Trained, skilled labor is the best insurance against the errors that lead to construction defects and the litigation that will inevitably follow. But craftsmen were not available in enough numbers when we built homes and buildings at a furious pace not seen in many years. 


            Litigation over construction issues usually follows a hot real estate market for several years. We are just now getting to that point. It is unfortunate because the buyers of those properties will suffer the most from leaks, rot, and other failures. It is easy to say provide more quality control, but inspectors can only stand over a worker for limited periods. City inspections are cursory, and municipalities can’t supply the number of inspectors it would take to avoid defects in new construction. 


[1] Lydia O’Neal, “Builders Hunt for Alternatives to Materials in Short Supply,” Wall Street Journal, April 25, 2022

[2]Curt Bennink, “New Year Brings More Uncertainty with Supply Chain and Labor Concerns,” For Construction, March 21, 2022.

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