Spokane Journal of Business

Construction activity likely to be strong in 2021

Labor, supply shortages kneecap builders’ efforts to meet high demand

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-Natasha Nellis
The planned five-story Jefferson Building, being built in Kendall Yards, is one of a number of projects underway in the Spokane area.

The 2020 construction season got off to a slow start because of pandemic-induced restrictions. Overall, though, industry observers here say the season finished better than expected, and 2021 is expected to even better.

About $30 million in public work is expected to continue into next year in the city, Marlene Feist, public works director of strategic development for the city of Spokane says. An additional $50 million in new work is also on the slate, including a $10 million investment package in street maintenance that will be delivered through 2021.

Major projects next year include the replacement of the deck on the Hatch Road Bridge, the next stage of rebuilding Sprague Avenue from Division Street to Grant Street, and work on the Cochran Basin, which will include infiltration of the stormwater in the basin. Water from the basin will be used on the Downriver Disc Golf Course for water features, says Feist. Other improvements will be made to T.J. Meenach Drive and the traditional Downriver Golf Course as part of the project.

The largest continuing project is the $18 million rebuild of the Post Street Bridge. An additional $15 million in water tank installations could also occur on the South Hill and near the Spokane International Airport, Feist says, though those projects are dependent on finding a suitable site and finishing additional permitting requirements.

On the residential side, Joel White, executive officer of the Spokane Home Builders Association, says builders are struggling to keep up with the demand.

Labor continues to be a hurdle, he contends. Construction companies saw a brief shutdown in March that saw several layoffs, and many workers declined to return to the workforce once the industry was allowed to restart work a few weeks following the shutdown, White says.

Additionally, supply chain disruptions made building materials, especially lumber, skyrocket in price in June, he says. Those price hikes drove up the cost of new homes, he says.

Through the first 11 months of 2019, 1,446 single family homes were permitted in Spokane County. This year has seen a marked decline, with 1,182 single family homes being permitted. However, White says, more multifamily buildings and duplexes were built this year than last.

In commercial construction, Cheryl Stewart, executive director of the Associated General Contractors Inland Northwest chapter, says she expects to see a decrease in public works projects as local governments grapple with smaller budgets.

She notes there are several big-budget transportation projects slated to begin this year, including large freeway projects and the continuation of the North Spokane Corridor.

Stewart says she expects to see fewer retail structures being built in the near future, while manufacturing and multifamily work will remain steady or grow.

Jim Frank, founder of Liberty Lake-based Greenstone Homes, says in-migration will continue to drive up demand for residential construction in Spokane and Kootenai counties. Frank says he expects to see strength in the medical and office space markets; however, he adds, retail is expected to take a major hit as the pandemic accelerates trends toward online buying.

Natasha Nellis
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Reporter Natasha Nellis joined the Journal in May 2018 and covers real estate and construction. Natasha is an avid reader and loves taking photos, traveling, and learning new languages.

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