CAI-NJ September 2021

WHAT SHOULD YOU BE THINKING ABOUT RIGHT NOW? COMMUNITY ASSOCIATION UPDATE CAI-NJ Editorial Committee The What Should You be Thinking About Right Now? — Community Association Update is a monthly feature added to our issues either written or solicited from CAI-NJ’s Editorial Committee. While upcoming issues of Community Trends ® will include articles relating to our monthly magazine theme, this update will provide direct and timely information important to community associations right now.

Budgeting for the New Normal By Eric Lecky, SageWater

JakeOlimb/ DigitalVision Vectors/Getty Images W e have all heard the stories and read the headlines about supply shortages and price increases resulting from COVID-19 related pro- duction and supply chain issues. Everything from wooden 2x4’s at your local home improvement store to new cars at dealerships are experiencing price increases coupled with more limited availability. In addition, movement across the labor market, fueled by job changes brought on by the pandemic and extensive, but temporary, unemployment benefits have made finding qualified labor at an affordable rate increasingly challenging as well. All of this is resulting in a perfect storm for communities seeking to undertake capital improvement projects in the coming year. Prices are up, vendor availability is limited, and communities are scrambling (and competing with one another) to get the next available slot to get work done on their building. For community association boards, this is a turbulent and challenging time. Projects were put off last year due to the pandemic, so the specter of deferred maintenance is real. But finding someone to do the work, at a reasonable price, is nearly impossible. As a result, it’s time to rethink your budgeting processes and adjust to this “new normal.” Expect to Pay More Material shortages and price increases are real. Everything from wood to plastic to steel is in scarce supply from production having been interrupted by COVID-19 and

Like other building materials, copper prices have increased over the past year as well, driving up prices that installers must pass on to their customers.

changing global policies on tariffs. For construction com- panies, sourcing materials for client projects has proven increasingly difficult. Shortages of cast iron have already increased prices approximately 30% over the past 18 months, and suppliers are increasing prices by another 12% starting on September 1st. “For drain, waste, and vent pipe replacement projects requiring cast iron, a 40% increase in material pricing in less than two years is just brutal for our clients,” said Chris Kaplan, PE, Director of Estimating at SageWater. “And with no visibility into when these prices will come down, it’s becoming increasingly difficult for us to hold price quotes for customers for more than 30 to 60 days.”

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