At Association Services, we've witnessed a significant rise in both labor and materials costs, mirroring the challenges faced by many. Maintaining common elements within associations, including remediation and insurance, has become increasingly expensive. As a result, Associations find themselves compelled to raise assessments and increase reserve contributions to mitigate the risk of a special assessment.
In response to feedback from owners and Board Members, we've compiled data from the US Bureau of Labor and Statistics and the Builders Industry Association of Washington (BIAW) to provide a quantitative perspective.
The data spans from 2019 as a pre-COVID benchmark through 2023, selected as it represents a post-COVID period sufficiently distant from supply chain disruptions and price spikes caused by the pandemic.
Highlighted in our findings is a notable increase in the cost of key materials. For instance, oil prices have surged, impacting downstream industries such as asphalt, composite roofing, and plumbing materials like PVC pipes. Wood costs have also risen significantly, affecting roofing, siding, framing, and other construction components. Costs for aluminum, iron, paint materials, and various building components like bricks and concrete have similarly experienced substantial increases.
The escalation in costs isn't solely attributable to materials; a severe shortage in labor has exacerbated the situation. Currently, the US faces a deficit of approximately 10 million trade workers, intensified by declining enrollment in trade schools. This imbalance is further compounded by a generational shift, where retiring Baby Boomers are not adequately replaced by younger generations.
Additionally, changes in building codes in Washington State have added to construction expenses. Over the past five years, there have been ten significant updates, including mandates for heat pumps in new construction, which reduce reliance on natural gas but increase electrical requirements. Such changes necessitate adjustments in construction practices and can impose retrofitting costs on existing structures to comply with current codes.
For those interested in more detailed information on code updates affecting existing buildings, further details can be found in Chapter 45 of the IRC (International Residential Code).
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