A recent study by the Timetric Construction Intelligence Center forecasts a brighter outlook for the construction industry over the next 5 years. According to the study, one of the main drivers of this growth will be the residential construction industry. The US population is projected to increase from 321.2 million now to 341 million by 2020 (according to the U.S. census bureau). It seems logical that the industry will be very busy providing housing for this population growth. That, of course, is good news for all of us.
HOME Government Program
But, the study also bases its projections on increased government spending in support of home ownership, sustainable community development and access to affordable housing. This is where things might take an unexpected turn, depending on what happens in the U.S. senate.
If your company has contracts that involve affordable housing construction, you know that the largest low income housing program at the U.S. Department of Housing and Urban Development (HUD), is the Home Investment Partnership Program (HOME). According to the U.S. government, the HOME program has enabled the production of 1.2 million homes across the country in the past 20 years. Partnering with participating jurisdictions (PJs), which consist of states and local governments, it has helped families whose income is significantly below the median income level of their area to obtain housing, either in single homes or multi-home constructions. The program also favors partnerships on many levels of government and private sectors.
U.S. Senate bill $800,000,000 funding cut
And now, this program has been targeted by a bill currently being reviewed by the U.S. Senate that would essentially cut its funding by over 90%. As of March 2017 this program is still under review by the Senate.
For example, the state of Michigan’s budget for the program would go from $25,666,070 in 2015 to $2,062,480 in 2016, a 93% cut. New Jersey’s budget would go from $22,684,216 in 2015 to $1,673,456 in 2016, also a 93% cut. This will affect all states.
The need for more competitive materials
The program is by no means the only government assistance that supports residential construction. But if the current bill is any indication, reduced reliance on government grants could be a more common factor in the construction industry over the coming years. If so, Architects and Contractors could be facing lower budgets and would need to be even more careful in their choice of materials.
High quality, low cost, and reliability in residential construction
Since its introduction some 40 years ago, engineered wood, has helped the residential construction industry reduce costs. It has don this by improving the quality and precision of single and multi-home constructions. It is and will continue to be one of the materials of choice in residential construction, particularly in affordable housing. Engineers and Contractors looking to stay competitive will continue to need economically priced yet high-quality materials. TRIFORCE® offers all the necessary advantages. Strong and lightweight construction, precision, and high quality, with quality control that is second to none.
For the long term
Long term reliability is key in affordable housing. This is due to the long expected duration of ‘’affordability’’. This represents 20 years in rental housing, and anywhere from 5 to 15 years in other construction. In the long run, material with the best combination of price and quality will ensure decent and affordable housing. It will also ensure profitability for builders.