Los Angeles Green Building Trends for 2016
Now that 2015 has come and gone, construction professionals are focusing attention on the year ahead. Analysts predict 2016 will be a strong year for the industry, as Dodge Data & Analytics’ 2016 Construction Outlook report predicted 6% growth, with the value of construction starts reaching an estimated $712 billion.
We talked with experts from various sectors of the construction industry to find out their predictions for 2016. Their answers varied from new technology trends, to workforce concerns, to homebuyer preferences. But one common thread connected all of the experts: They have high hopes that 2016 will bring strong demand and booming business.
“I don’t think I could be any more optimistic for 2016,” Bud LaRosa, chief business performance officer and chief financial officer for Tocci Building Companies, told Construction Dive. “These are truly the good times.”
Here are the top trends to watch in 2016.
Offsite — also known as modular or prefabricated construction has been gaining ground as an alternative building method that offers the benefits of reduced construction time, less waste and possible cost savings. As companies struggle to staff job sites and stick to difficult schedules, many have started to turn to prefab as an option that offers more certainty.
“A lot of use of things like prefabrication, we expect that to be an accelerating trend next year,” Thasarathar said.
Ron Antevy, president and CEO of e-Builder, told Construction Dive he has seen a growing use of prefab methods, especially in the healthcare sector.
“(Prefab) is up-and-coming. That’s a way to save costs and speed up the time,” he said. “Some of the larger owners out there are starting to realize there are efficiencies there, but you have to be doing a certain amount of volume for these kinds of strategies to pay off.”
Wider implementation of offsite construction has been somewhat hindered by the design and construction culture, according to experts at the Offsite Construction Expo in September. They also cited the change in the traditional building process that comes with offsite methods as a deterrent for implementing the approach, as contractors and owners struggle to adapt to the varied timeline of decisions and building. Still, the additional certainty that comes with prefab could catalyze the growing trend in 2016.
Construction Companies Will be More Cautious about Project Selection
The crippling recession and lingering labor shortage have spurred another trend among construction industry decision makers: Many are now being more cautious about the amount of new work they can handle, and about growing their companies.
(Companies) are not going to overeat. They’re only taking the work they can handle,” Chris Kennedy, vice president of Suffolk Construction, told Construction Dive. “It’s different from the last boom, when people were signing up for work. Everybody still has those recent wounds. They’re going to be a lot more cautious about growing a firm bigger than they can handle.”
The labor shortage has left employers at all levels forced to take a closer look at the number and size of projects they can handle at once.
“We as general contractors have become a lot more selective of the projects we pursue,” Chuck Taylor, director of operations for Englewood Construction, told Construction Dive. “I think the subcontractors are going to be in a very similar position.”
Green Building Will Grow in Commercial and Residential Sectors
Commercial construction has typically led the pack in green adoption, but the residential sector is starting to catch up. The growing trend in both sectors is driven not just by a desire to produce environmentally friendly structures, but by consumer demand, higher-quality results and lifecycle cost savings, according to experts at Greenbuild 2015.
Thasarathar said that with larger construction projects, companies are aiming for LEED certification, “even if it’s not prescribed.”
Dacey added that although developments outside of city centers tend to not prioritize LEED as much, “almost every building design incorporates green principles.” He said he expects green building and LEED certification to continue growing in the coming years.
In the residential sector, green building currently accounts for 26-33% of the total residential market and has helped contribute to the industry’s recovery after the recession, according to Dodge Data & Analytics.
“I do think (green building) is a growing trend in response to demand,” Robert Dietz, an economist with the National Association of Home Builders, told Construction Dive. He pointed to the aging in place movement as a driving force for that demand, as baby boomers are remodeling their current homes and seeking out ways to increase energy efficiency and reduce utility bills.
Single Family Sector Will Pick up Steam
Industry analysts have largely agreed that the multifamily sector’s hot streak will inevitably cool down, and that slowdown will likely occur in 2016. On the positive side, the single-family sector is expected to pick up steam and see a strong year. In its 2016 Construction Outlook, Dodge Data predicted single-family construction will see a 20% increase in starts this year, while multifamily is expected to post a 7% gain after several years of double-digit increases.
“I expect the homebuilding sector will continue to show improvement. If anything happens on the multifamily side, I think it will probably level off. The upward slope for multifamily won’t be as strong as for single-family,” Alex Carrick, CMD’s chief economist, told Construction Dive.
Still, single-family housing has a long way to go to return to pre-recession, “normal” levels. During a webinar in November, NAHB Chief Economist David Crowe said single-family construction is currently 53% back to what is considered “normal” levels, and should be 91% of the way there by the end of 2017. Multifamily, on the other hand, is already significantly higher than “normal” levels, currently 32% above the mark. Crowe said the multifamily sector is expected to slowdown in the next two years, coming in 9% higher than “normal” levels at the end of 2017.
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