Miami Today Quotes Archambault on Rising Construction Costs for Multi-Family Housing

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Construction costs for multifamily housing rise by half

In Miami-Dade County, land is very expensive and scarce along with naturally restricted boundaries, said Louis Archambault, partner for Saul Ewing.

“Most of the larger tracts that would otherwise have been available if you go back a few decades are all developed at this point, so that scarcity of land increases the value of any potentially developable land,” he said. “The other factor is just the increases of hard materials. It’s not just the increase of the cost due to less supply, but the ability for transportation and logistics to get those transported from the areas where they’re located.”

Those specific delayed supplies include hardcore materials like steel, concrete, lumber, and then oil base products, Mr. Archambault said. “All of those make the cost of construction much higher than anticipated. And if you’re trying to deliver a product that has either rent or cost control aspects to it to keep them affordable, you have an ever-increasing gap to be able to try to develop that product, because you can only develop what ultimately makes sense economically, and there’s a large gap right now.”

Mr. Archambault said he still sees these challenges to be short-term, saying there will be a way to adjust and for supply to eventually to pick up and meet the demand to bring some of the construction costs down.

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