Hurricanes Harvey and Irma may pose challenges for Home Builders in the Upstate

By: Michael Dey, CEO, Home Builders Association of Greenville

Hurricane Harvey directed the bulk of its punch on Texas, and Irma is headed our way.  However, Approved Professional Home Builders in the Upstate may not be free of the impacts of these hurricanes.  Hurricane Katrina should be a guide to the potential impacts that Harvey may have in store for the Upstate in the coming weeks.

Fuel prices and availability
The first impact is already being felt, and may continue for days or weeks: gasoline availability and price.  Half of the nation's oil refineries are located in Texas and Louisiana, and they are all closed.  As a result of the lack of flow, the Colonial Pipeline, the means by which gasoline is shipped to the Southeast from the Gulf Coast, has been closed also. This is the source of half of our state's fuel.  Gasoline prices have already jumped, and shortages may follow.

Building materials shortages
Following Katrina, building materials, particularly lumber and plywood, were in short supply for several months as these materials were diverted to devastated areas following Katrina.  Approved Professional Home Builders can expect the same with Harvey and Irma.  Texas and Florida get some of their lumber from the same suppliers as South Carolina.  These suppliers are in Louisiana, Alabama, and Georgia.

If you are not using an escalation clause in your contract with your customers, you should consider using one.  Your attorney can help you add one to your contract.  Your Home Builders Association can provide you with a sample.  Simply email eo@HBAofGreenville.com.

Labor shortages
Another issue Approved Professional Home Builders experienced following Katrina was labor shortages as subcontractors traveled to hurricane-effected areas to help and in search of bigger pay days.  No matter the reason, some of your labor may head to Texas and Florida to work on clean up and repair efforts there.

In a meeting yesterday with Federal Reserve officials, labor availability was front and center as the number one concern of business people in all industries.  Labor availability is reaching crisis levels, and Harvey could be a catastrophe that pushes the labor problem for construction in the Upstate to a crisis situation.

Approved Professional Home Builders should plan for these contingencies, and prepare for the customers for possible delays in their projects.