Governor Jay Inslee on March 23 issued a “shelter-in-place” order closing all non-essential business activity in the state, including construction work. Builders are now asking Inslee to reconsider the designation of their business sector, arguing that construction can occur in a safe manner while allowing new housing supply to enter the market.
In a March 26 letter to Inslee, Master Builders Association of King and Snohomish Counties (MBAKS) Executive Director Kat Sims wrote: “We are very concerned that a comprehensive shut-down of home construction could be devastating to our local, regional, and state economies. At a time when our state faces a massive housing shortage, rising housing costs, and a homelessness crisis, we cannot afford to hit pause on new home construction.” The association represents 2,700 construction companies.
After his March 23 order, Inslee issued a clarification stating most construction is not an “essential activity” – making Washington one of only two states to do so. Exempt from the order are affordable housing and low-income housing projects, along with work that may be needed to address unsafe or unsanitary conditions.
In a public statement, MBAKS said “this is devastating, not only for the work of constructing housing in our region, but also to the workers and families who depend on the home-building sector for economic security.”
Building Industry Association of Washington (BIAW) Communications Director Jennifer Spall told Lens this ban on work creates “a big pause in the supply of housing at a time when we need it the most. It’s going to slow things down considerable. Some of these guys (builders) are going to have to lay off workers…then put their teams back together. We have a lot of people scrambling trying to figure out what is this going to mean.”
MBAKS Media Manager Nona Raybern told Lens the order is akin to “turning off a boiling pot of water, letting it cool down, and then waiting to turn it back on again.”
One of the issues builders face is whether or not local governments will continue to issue permits. While most have an online application system available, Spall said they still must “go through cities one by one. We have been inundated with questions from our members in all corners of the state.”
Though the order is intended to stop COVID-19 from spreading, Sims’s March 26 letter says: “it is entirely feasible for home construction activity to meet social distancing, worker protection, and appropriate health screenings in order to proceed safely.”
Sims also underscored builders’ economic contribution to the state and their role in addressing the state’s housing shortage. According to a 2019 report from the National Association of Home Builders, in 2018 builders constructed 24,000 single family homes and provided 167,947 jobs.
“The business of building new homes directly and indirectly generates taxes and fees, creating a revenue source for state and local governments,” the letter states. “Building housing of all types generates significant tax revenue to invest in the communities of current residents.”
What remains unknown is how severe the shutdown will affect the industry. The new stimulus package passed by Congress proposes to offer small businesses a $350 billion forgivable loan program.
Spall wrote in an email that “we won’t know the impact to the housing pipeline, economic impact on our members or revenue to state for some time.”