It’s been just two weeks since “Hurricane Sandy,” or what has since become known here as “Superstorm Sandy,” hit the New Jersey and New York coastlines and many communities are still without utilities and thousands of people are still without homes. My intent is not to diminish the personal loss and disruption to lives caused by the storm, but I would like to take time out to address how the storm is affecting local construction businesses.
STICKING WITH WHAT WE KNOW
We were extremely lucky here on Absecon Island, the home of Atlantic City and near the southern tip of New Jersey. Partly because of how the storm hit us and partly due to the Army Corps of Engineers having just completed a beach replenishment and dune construction program in Atlantic City and Ventnor. Margate City and Longport, located on the southern tip of Absecon Island, got hit harder, in part because those communities chose not to participate in the dune replenishment program (many homeowners find the dunes unattractive and they can block views of the ocean from their expensive beach homes) and because that end of Absecon Island is just closer to sea level.
Our company has been quite lucky and was operating at close to full capacity before the storm hit. This was one of many reasons we made the business decision to not get involved in storm remediation work and to stick with what we know best, which is to design, build, and renovate great homes at the Jersey Shore. What we are beginning to see, however, is that the storm’s fallout on our business has just begun and it is not all good news. Of course, there is, or will be, lots of new work as homeowners look to repair/rebuild or replace their damaged homes. We are in the process of ramping up our marketing program and management staff to handle the additional workload we anticipate in the upcoming months and years.
On the downside, we are seeing a lot of fallout from our regular tradesmen and material suppliers. Everyone is very busy, and it is really easy to make quick money helping out people whose homes were ravaged by the storm. Labor prices are going through the roof and materials are already becoming scarce — and with scarcity come increasing prices.
Scheduling trades has become much more difficult too, as they struggle to address all of this new work and keep their current commitments. Several have chosen to abandon us in search of a quick buck. Because we offer our customers fixed price contracts, I anticipate significant slippage between our pre-storm estimates and the new post-storm pricing we are beginning to see.
Additionally, we are seeing numerous legitimate and illegitimate out-of-town contractors descend on our community. Stories are already circulating of people being taken advantage of by contractors or, worse, of contractors taking deposits and disappearing.
It will be some time before we know how this will all play out for our business and our community. What was that old Chinese proverb (or curse)? “May you live in interesting times.”
—Todd Allen Miller owns QMA Design+Build, in Ventnor, N.J.