February, 2020 - Sachse Construction

Multifamily Sector in U.S. to Enjoy a Strong 2020

Driven by Growing Demand for Apartments by Millenials

According to experts participating in on a speaking panel during the National Association of Home Builders (NAHB) International Builders’ Show in Las Vegas last week, U.S. apartment production has returned to pre-recession levels and vacancies are low, but more new apartment homes are needed.

Young people are eager to move out of their parents’ homes, and growing families want to move into a larger home or apartment. “Research shows that 22 percent of young adults–ages 25 to 34–still live with their parents, a trend that will continue to create a drag on household formation in 2020-2025,” according to NAHB economist Danushka Nanayakkara-Skillington, AVP, Forecasting and Analysis. “That group’s challenges in looking for an apartment can be attributed to student debt, rising rents or even competition with seniors who opt to downsize to a smaller home or apartment.”

Multifamily housing starts leveled off in 2018 in response to higher building materials costs, the need to pay higher wages to attract and keep skilled workers, as well as regulatory costs that make up a third of total multifamily building costs. Rents rose along with costs, resulting in more luxury communities and fewer affordable apartments.

Developers have continued to respond to demand by building more apartments, predominately in urban areas. In 2017 and 2018, most rentals were communities with more than 50 units. In 2019, multifamily starts were at 116 percent of the national average. While condominiums might seem to be a good response for demand, developers have not significantly ramped up condo production.

In spite of significant problems such as building materials prices, a shortage of skilled labor and local and federal regulatory constraints, rental production is expected to continue at near-present levels, with a 1 percent increase in 2020 and a 4 percent increase in 2021. The expected increase is in part because young people and retirees look to apartment living as a more affordable, low-maintenance option–preferably in walkable neighborhoods with opportunities for entertainment, services and social activities that suit their needs.

“Apartment developers and designers are incorporating features into their communities like coffee bars, rooftop cafes and bars, bowling, indoor basketball and more,” said Sanford Steinberg, founding Principal of the Steinberg Dicky Collaborative in Houston and Austin, Texas. “The goal is to attract and retain the renters and ‘renters-by-choice’ who prefer a stimulating lifestyle in a great apartment community that offers all the amenities they are accustomed to in the home they lived in or strive to obtain.”

While increasing numbers of millennials are purchasing single-family homes, pushing the homeownership rate back up to 64.8 percent, home prices continue to hinder some millennials who then opt to rent. While rental rates are growing more slowly as supply increases, rents are expected to continue to rise in 2020.

Why Waters Regs Matter to Developers

The Federal Government and California State government are both redefining water restrictions, and developers should pay close attention to the changes. Any development involving a wetland could be significantly impacted by these changes.

“Developers looking to buy or build on property with wetlands or other water features must be careful,” Scott Birkey, a land use and natural resources partner at Cox, Castle and Nicholson, tells GlobeSt.com. “If their proposed development would result in any impacts to those features—such as filling or working within the features—then the developer may need a permit for that work from the federal government under the Clean Water Act.  Otherwise, the developer risks being in violation of the Act.”

Developers outside of California will need to determine if their property or project is subject to these regulations. “The key to determining whether a wetland or a water feature is subject to the Clean Water Act turns on the phrase “waters of the United States.”  This phrase establishes the scope of the federal government’s authority to regulate these features,” says Birkey. “This makes the definition of that phrase critically important.”

The impetus to make this change came from the Trump Administration’s rejection of broad federal regulations, instead decreasing the federal scope and handing regulation off to the state, which has catalyzed California to tighten regulations. The new rule will regulate wetlands or other features only if they actually abut a navigable water way, and will only regulate a stream if it flows perennially or intermittently,” Clark Morrison, a partner at Cox Castle and Nicholson, tells GlobeSt.com. “That is, a drainage feature that flows only when it rains will not be covered by the Clean Water Act.  The new regulations establish a healthy list of exemptions, including exemptions for sheet flows, groundwater, certain farmlands, most irrigation or drainage ditches, and various types of water treatment facilities.  Although some of these exemptions existed prior to the new rule, in many cases they have been expanded or made more concrete.  The bottom line is that many minor features that one may find on a development site will no longer require a federal permit for the fill or elimination of such features.”

Developers are still looking for clarification to comply with the new definition. “What’s particularly troublesome about efforts to define this phrase is that it’s not always immediately obvious whether a feature on the ground—wet or not—constitutes a ‘water of the United States.’ A good example of this are topographical features called swales that may be normally dry throughout the year, but collect water or convey flow during a significant rain event,” says Birkey. “Does this mean that grading or placing fill into that swale requires a permit?  That answer turns on whether the swale is a ‘water of the United States.’”

Construction Industry Weighs Building Lifespan to Fight Climate Change

Increased climate change concerns in the industry have stakeholders considering the lifespan of buildings more closely to make sure they’re flexible for many uses and serve the lifespan intended for its use to cut down on carbon emissions and waste that arises from the construction process, Julian Anderson, president of Rider Levett Bucknall North America, a cost and project management and advisory services, tells Globest.com.

“We had the view for a very long time to think about the construction of developing and repurposing buildings from the view of what is the anticipated life of the building and ask ‘am I building this in a way that makes sense for the intended use?’” Anderson said.

Consideration of how building materials work together for its frame is important to determine how long the property will last should be on the developer agenda. In addition to how flexible the space and design of a property is to serve different uses over the life of a building, especially if it is intended for a long life span, Anderson said. “If the building has a life for 20 years, build for 20 years and if it has a life for 100 years building for 100 years.”

As national municipalities crackdown on carbon emissions and waste practices, the need for sustainability will become a forethought than an afterthought.  ”I’m amazed that there is anybody left who says climate change isn’t important,” Anderson said. “Most people realize it’s a problem, and everyone including the construction industry needs to respond.”

Cell phones present a safety hazard at job sites

Workers who use personal mobile phones on job sites present safety risks that contractors need to address.

Many workers, especially younger ones, commonly connect ear buds or head phones to their phones to listen to music or podcasts in their off hours. Some listening devices equipped with sound-canceling features that block off noises from the outside world. If workers use these devices on the job site, workers can be completely tuned out to sound cues that alert them to hazards.

Some contractors ban these devices at work, but the issue is an ongoing concern because sometimes workers don’t realize they have listening devices in their ears when they enter the construction zone. There is no specific federal regulation that prohibits the use of headphones on a construction site, but OSHA issued a letter of interpretation that says headphone entertainment on a construction site is permissible at managerial discretion.

OSHA standards do require employers to protect employees’ ears with ear protective devices. Personal headphones or ear buds do not qualify as protective equipment, though.

Milieu: Creating restorative environments in behavioral health

Every setting cues us how to behave. Is it loud and active? Quiet and intimate? Cozy or spare? Modern life bombards us with stressors. When we need services to help us cope with a mental illness, or life crisis, the design of behavioral health settings matters.

It’s time to take a closer look at the collection of therapeutic settings known as milieu. In a behavioral health hospital or long-term residential care facility, these settings foster social interactions and activity, and it’s where inpatients and residents spend their day since time alone in bedrooms is usually limited to sleeping, dressing, or perhaps an hour of quiet time. Milieu is used for group therapy sessions, guided activities, dining, and free choice time. While most facilities provide milieu ranging from highly controlled unit spaces to education or recreation areas common to the building, creating enriching spaces that offer social choices and reduce aggressive behavior are key to successful milieu design. Done right, these spaces can restore a sense of normalcy during a vulnerable time; de-stigmatize an institutional experience and be restorative.

Nearly one in five adults suffers from a behavioral health condition and may at some point require periodic hospitalization or extended treatment at a long-term residential care facility. A 2018 article from The Advisory Board documents the surging demand for these services, and how the shift to a population health model of care is leading to more or expanded facilities.* Most of a patient or resident’s day is spent in milieu spaces—whether within the unit or off— they should empower and facilitate recovery, not impede it. As we face the prospect of building more, it is imperative that we think about the impacts of these spaces, and how they can be positive, empowering, and healing.

THE SAFETY CONUNDRUM: DENSITY IMPACTS AGGRESSIVE BEHAVIOR

On or off- unit, design of safe and restorative milieu space presents a unique challenge.

Units typically have just two or three staff per shift. Inpatients and residents are never permitted to be alone in any milieu space, so an individual’s use of a private milieu space (such as a de-stimulation room) requires staff to accompany them, resulting in less staff to supervise the open milieu. Patients are encouraged to remain in communal spaces where staff can visualize all parts of the room in order to respond quickly to problems and signal colleagues if they need help. While logical from a risk management standpoint, it has an opposite effect on the person being treated. These patients and residents are in an extremely vulnerable state and feel out of control of themselves and their situation. Being exposed—and given no choice but to interact with other strangers—they don’t perceive themselves as being safe.

Even if no negative incidents occur, the person experiences a heightened state of anxiety. But negative incidents do occur. Dominant personalities can create conflict or encourage negative/destructive behaviors by those trying to avoid conflict. Units of as many as 12-16 individuals sharing one room can heighten social friction. A study conducted by Roger Ulrich and Lennart Bogren on how design can influence aggressive behavior, links crowding to a rise in aggression. Their research recommends a unit social density (number of persons per room) of less than .5 patients per room available (counting bedrooms, private bathrooms and all unit milieu). **

SOCIAL NEEDS ARE NOT ONE SIZE FITS ALL

Social choice is a critical consideration for successful milieu space. Introverts and extroverts have very different needs. For introverts, time alone helps them restore and reset. Denying them time alone creates exhaustion and stress. Extroverts are energized by social interaction and are more likely to seek attention and may become aggressive or frustrated if rebuffed. Additionally, someone processing difficult emotions may desire privacy; someone who feels tired and cranky may want to be left alone. Someone engaged in a small group conversation may not welcome a newcomer to the group.

DESIGNING A PATH TO BETTER HEALING

GBBN’s approach to behavioral health incorporates much of our research into health-generating spaces. We use the built environment to reduce stress and build confidence so that treatment can be more effective and destructive or aggressive behavior reduced.

Our approach to milieu establishes normalcy by creating an analogy to everyday life. We think about milieu in three tiers and advocate a variety of milieu spaces at each level. This begins with evoking home (the unit) with access to broader amenities of a “neighborhood” (group of units) and functions of a town (facility-wide amenities). Much like a home, individuals have their bedroom, and multiple spaces for other activities of daily life, as well as therapy and critical intervention space. The neighborhood offers therapy areas, physical activity rooms, even a kitchen and outdoor areas. At the town level, offerings expand to include things like outdoor recreational and therapy areas, a gym, “restaurant” (cafeteria), and “retail” spaces such as a health clinic, hair salon, or store where goods such as sleepwear or slippers can be purchased. Some individuals may be restricted to the unit upon admission, but they can look forward to greater freedom and autonomy as they progress and unlock access to the neighborhood, and then the town spaces.

A biophilic approach incorporates calming color schemes, lighting at the correct color temperature throughout the day to maintain the circadian cycle, access to outdoor spaces at the neighborhood level, and natural light in all milieu spaces.

We also consider ways to deliberately empower individuals. Bedrooms feature a variety of lighting options, and places to draw or display personal items. Different milieu spaces on the unit offering different activities and atmospheres let people choose how to spend free time. Movable furniture and different seating options allow customization to meet individual or group needs.

Feeling safe and being able to control one’s socialization are critical to recovery. We address this by creating occupiable edge conditions such as benches along a wall or shallow alcoves that allow newly admitted patients or residents to acclimate gradually; they can be present in a space, without being forced to socialize. Introverts also appreciate this opportunity to be alone or in a small group, and staff can establish trust by building one-on-one relationships that don’t feel forced.

Finally, by looking at our unit as a home, we can leverage different social dynamics. This makes time spent on the unit less monotonous and allows the unit population to be broken-up into smaller groups, which reduces aggressive behavior. We think about these spaces as being of various sizes; of looking and feeling different based on the activity. Because staff visualization is important, these spaces can be partially enclosed and employ finish changes to denote the change in space (for example, lower ceilings in small group areas to make them feel more intimate).

The stress response can be neutralized by providing a variety of positive distractions such as artwork that has strong foreground, middle ground, and background and is of recognizable settings; or tactile pieces that encourage interaction. Opportunities for pacing, rocking, or other repetitive movements can help soothe agitation. Gross motor rooms, where patients or residents can release energy can also help them remain calm in social groups.

Designing space for a diverse population suffering from a range of mental health problems is a challenge. It involves deliberate work to avoid environments that will exacerbate the effects of trauma and help individuals feel respected and empowered.

Forget Class A: The opportunity is with Class B and C office properties

In the $90 billion U.S. office construction sector, Class A and Class A+ properties are the darlings of every major metro market. Owners and developers of these amenity-rich, high-performance buildings are competing to lure top-notch companies willing to pay the most lucrative lease rates—and to keep them there long-term.

There’s certainly plenty of money to be made in building and rehabbing Class A office buildings. But what about their less-flashy counterparts, Class B and Class C properties?

A new Urban Land Institute report, researched in partnership with the Rocky Mountain Institute and the Building Owners and Managers Association (BOMA), suggests that there is significant “hidden value” waiting to be unlocked by owners of Class B/C properties—and plenty of work for AEC firms that cater to these segments of the office market.

For myriad reasons, these properties are woefully outdated and in serious need of a tune-up to meet baseline energy efficiency standards. The ULI report found that even the simplest of energy efficiency measures—low- and no-cost tactics such as upgrading general office illumination to LED fixtures, optimizing HVAC schedules and setpoints, performing routine preventative maintenance, and engaging tenants in occupant behavior measures—could net an immediate 15% savings in energy costs.

Larger capital investments—such as improvements to the building envelope and roof system, or installation of high-efficiency building systems, sensors/controls, or solar panels—could slash energy use by 35% or more, with paybacks in the three-year range. “That can reduce a property’s operating expenses by $0.26 to $0.61 per square foot, increase net operating income by 1.9% to 4.3%, and boost property value by approximately $4 to $8 per square foot,” said the authors.

 

Why haven’t more Class B/C property owners taken steps to improve the energy performance of their buildings? The report pinpoints three primary reasons: limited working capital to pay for project costs, inadequate staff capacity to implement these measures, and a lack of priority versus other business activities.

 

Furthermore, by successfully instituting a green lease program, owners can recoup a sizable portion of the initial investment, which would further improve the financial outcomes for the property.

If all of this is so elementary, as the report outlines, why haven’t more Class B/C property owners taken steps to improve the energy performance of their buildings? The report pinpoints three primary reasons: limited working capital to pay for project costs, inadequate staff capacity to implement these measures, and a lack of priority versus other business activities.

“Staff working at Class B/C buildings wear multiple hats. Rarely do they have dedicated third-party management or building engineering staff with time to focus on identifying, championing, and implementing energy efficiency efforts,” said the authors.

Want your organization to be more creative? Embrace these 4 workplace strategies

The best businesses across every sector operate as idea factories. When you think of creative businesses, you may think of companies like Apple or Pixar. But today, encouraging creativity is a must in every business, from law firms to banks to media companies. A creative culture arises from many factors — who you hire, your reward system, how you structure teams — but the space you house it all in can be a huge amplifier of creativity. Here are four things I’ve seen supercharge creativity on our recent projects:

1. MIXING UNLIKE MINDS

As the old axiom goes, great minds think alike. But there is evidence that the real truth is great minds often think differently — and connecting different points of view spurs on creativity. As a result, creative companies are bringing in outside voices and actively connecting individuals across their distinct businesses. Many organizations are creating coworking spaces for their staff or accelerators for emerging, external businesses to help germinate ideas onsite. These can be fully integrated or, more typically, onsite but separated. This is all part of a shift to workplaces that embrace outside minds while simultaneously safeguarding confidential information.

2. SHOWCASING THE (SOMETIMES MESSY) PROCESS

A workplace that celebrates the products, content, or innovations inspires those who work there. This is true for all employees, not just the ones specifically working on content or product development. The divide we used to see between the war rooms, the labs, the newsroom, and the general workplace is eroding. By showcasing creative work at all stages of the process — from idea generation to testing to marketing — a narrative office tells the story of the work as it unfolds, allowing various teams to see how their own roles contribute to the final product and the overall mission. Employees feel a sense of connection and the space can also be a captivating experience for clients and visitors.

3.TEAM AGENCY

The creative process requires focus at the individual level, as well as brainstorming and idea sharing. Empowering both individuals and teams to seek out the spaces that work best for them is critical to a successful ‘creative’ workplace. All rooms, and even many open spaces, need to be designed with a configuration and technology that allows remote attendees (the norm now, rather than the exception) to fully participate. A team’s needs may vary based on personal preferences, the project or topic at hand, and the stage of the creative process. Giving individuals and teams license – through varied spaces and a good degree of flexibility in configurations and furniture – will allow them to thrive in their creative endeavors.

4. SPONTANEOUS CONNECTIONS

Amenities aren’t about escaping work — they’re about optimizing it. The best amenity strategies prioritize the ability to work anywhere, creating hybrid settings that deliver both an amenity and a workspace: work cafés, quiet/focus zones, innovation hubs, cafeterias, receptions, pre-function spaces, and pantries should be thought of as places where employees can work and connect throughout the day. These spaces also give employees the ability to get a change of scene – to get out of one headspace and into another – something that can be key to spurring on creative thinking.

We talk more about innovation than creativity, but the two go hand-in-hand. Making a space conducive to both is less about a cool aesthetic or techy vibe (though it can help), and more about rethinking the environment to capture all the dimensions that empower individuals and teams to create new ideas, new products, and new offerings.

U.S. Green Building Council releases the top 10 states for LEED

As cities and states continue to work toward climate action goals, the U.S. Green Building Council (USGBC) has announced its list of Top 10 States for LEED green building. For the first time since 2011, Colorado took the top spot on the list, which ranks states based on the number of LEED certified square feet per person. LEED, or Leadership in Energy and Environmental Design, is the most widely used green building rating system in the world with more than 100,000 projects engaged. This year’s top states are home to more than 105 million people, including more than 80,000 LEED green building professionals with the skills to support the sustainable transformation of buildings.

“As we embark on a new decade, the USGBC community is focused on helping more projects get on the path to LEED certification and a more sustainable future,” said Mahesh Ramanujam, president and CEO, USGBC. “Over the last year, the Top 10 states have certified projects that serve as incredible examples of how green building can create more sustainable and resilient spaces that improve our living standard. There is still much work to be done, but the progress made across these states shows us that our work is having a tangible impact on people’s lives. As we enter our next chapter, we are committed to helping more buildings, cities and communities improve their sustainability performance through LEED.”

LEED-certified projects support personal health and well-being, as well as use less energy and water, reduce carbon emissions and save money for families, businesses and taxpayers. The Top 10 list is based on 2010 U.S. Census data and includes commercial and institutional green building projects certified throughout 2019. Colorado certified 102 green building projects representing 4.76 square feet of LEED-certified space per resident. The state has made the Top 10 list each year but jumped to the top spot after ranking sixth in 2018. Minnesota and Oregon reemerged as Top 10 states after missing the list last year, coming in at number eight and nine respectively. The full rankings are as follows:

USGBC calculates the list using per capita figures to allow for a fair comparison of the level of green building taking place among states with significant differences in population and number of overall buildings. Despite Washington, D.C. not appearing in the official Top 10 list because of its status as a federal territory, it consistently leads the nation and in 2019 certified 52.86 square feet of space per resident across 143 green building projects. The nation’s capital has a strong legacy of sustainability leadership and has expanded its use of LEED from buildings to cities and communities to support its goals. In 2017, it became the first LEED-certified city and in 2019 certified the Golden Triangle Business Improvement District LEED Platinum, the first business improvement district in the world to certify.

With green building expected to grow globally through 2021, the need for skilled professionals to support green building projects has never been more important. Across the U.S. there are more than 165,000 LEED green building professionals with the knowledge to help cities and communities transition to greener buildings and spaces. LEED professionals demonstrate a competency in green building principles that can set projects on the path to certification and help them consider ways to reduce their impact on the environment and provide people with healthier, more sustainable spaces to live, learn, work and play.

As USGBC continues to advance green buildings, cities and communities through the adoption of LEED and the latest version of the rating system, LEED v4.1, the organization is also considering a future that is focused on a more regenerative approach. In November 2019 at the annual Greenbuild International Conference & Expo, USGBC introduced LEED Positive – a roadmap that will lay the foundation for a future of LEED that transitions away from strategies that only reduce harm and instead focus on those that help repair and restore. With a continued focus on performance, USGBC is laying the groundwork to ensure sustainable design, construction and operations of buildings, cities and communities remains focused on better buildings that contribute to better lives.

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