Lafayette, LA - While new buildings seem to be going up all around the city, some projects aren't getting off the ground because of the rising cost of construction. Construction companies in Lafayette are grappling with labor and materials costs that have climbed exponentially in recent years, causing some to go back to the drawing board to re-evaluate their plans.
Rodney Richard, the city's chief building inspector, said he estimates construction costs have increased by at least 25 percent during the last five years. Stephen Billeaud, president of BEO Contractors, said at least three deals so far this year have fallen through because of rising construction costs. "If we see deals fall through, I'm sure somebody else has," Billeaud said. Todd Bulliard, owner of Bulliard Construction Co., said it's not uncommon to have developers walk away from expensive projects. "We recently bid on a project to build a bowling center in Broussard and it was budgeted at $3 million. When we bid, it went at $4.5 million, and that killed the deal," he said. "The guy sold the property and scrapped the plans for the bowling center based on the price being 25 percent over his budget." "It's almost without fail. Everything you bid will go over budget," Billeaud said.
The reasons for the cost explosion are multifaceted, contractors say. After Hurricane Katrina hit New Orleans in 2005, many contractors say cities such as Lafayette have not been able to keep up with the demand for new construction as businesses and people moved into the area. "Everybody has moved to Baton Rouge, Lafayette and other surrounding places, and everybody's scrambling like crazy to build, and because of that, plumbers and other skilled labor can ask for more money because there is a shortage of good workers," Billeaud said.
Another reason for the skyrocketing costs? A lack of skilled workers in the area. "The labor force is pitiful," Richard said. "Skilled labor is so hard to find," Bulliard agreed. "The worse part is that we're competing with the oil industry for the same labor." Billeaud said the demand for skilled labor is especially tight in a market such as Lafayette. "Lafayette is not a big city like Houston or Austin or Dallas," Billeaud said. "We have all this work and construction just like a big city, but we don't have the workers to do the job." Global factors also add into the equation. China has experienced a large building boom and is buying up steel, copper and other building materials, effectively driving up construction prices here in Lafayette and across the country. Concrete has risen in cost by more than 40 percent in the last year, said Gerry Favaloro, co-owner of BEO Contractors. The rising price of copper has caused the electrical component of most construction jobs to become increasingly costly. "Electrical used to be 10 percent of a construction job, not much in cost," Billeaud said. "Now, it's 15 percent of your construction job, and it's rising."
While the area lacks enough affordable housing units, construction of apartment complexes is becoming particularly expensive. The University House Apartments on Bertrand Drive are set to cost $12 million to complete. The Bridgeway Apartments on Dulles are said to cost $14.3 million. The University House Apartments would have cost $6 million to complete 10 years ago, and the Bridgeway Apartments would have cost about $7.1 million, according to Richard's calculations.
The city and the university are also feeling the heat of high construction costs. The new Southside branch of the Public Library under construction on Johnston Street is set to be completed with a budget of $8 million, said John Broyles with the planning and zoning commission. The renovations at Burke-Hawthorne Hall at UL cost $12
Source: Daily Advertiser