As Construction Booms, So Do Defects

As Construction Booms, So Do Defects

By Brian Redlein

Buildings are rising and construction continues to boom at a remarkable clip throughout the City. Developers are eager to break ground on new projects  in order to cash in on soaring property values, offering amenities, fast timelines, and incentives to get their buildings up, and properties sold.

At the same time, lawyers, architects and engineers are noticing an increase in complaints from residents in these newly built homes. Across the industry, there is a growing concern that some developers are repeating the mistakes of the last housing boom and delivering substandard product.

During the 2007 housing market collapse, many developers were left with minimal resources to complete their projects, leading some to cut corners or abandon developments. The result was a series of poorly built developments followed by a flood of lawsuits from angry buyers. Lean years followed, as the  recession took hold new construction stalled. Only the most seasoned developers continued to build.

The market’s back, to say the least. With skyrocketing housing prices, untested developers are once again eager to get into the game.  Prosperity draws a crowd, and even those who built problematic buildings in the past are breaking ground again.

However, high prices are not reserved for finished properties. With land values and construction costs at an all-time high, the actual profit margins are narrower, particularly in mid-market projects.

As a result, some builders are taking shortcuts, swapping higher-quality materials for less expensive alternatives, and even hiring unqualified subcontractors. Experts in the field believe this explains the torrent of complaints from residents of newly built buildings since the start of the year.

While most complaints are related to cosmetic details like parquet floors where quarter-sawn oak was promised, others are far more serious.  Evidence of faulty elevators, damaging water infiltration, and inadequate insulation are putting the health and safety of residents — and sometimes pedestrians — in jeopardy.

All new construction has inherent risks and industry professionals agree that for the most part, developers deliver sound structures.  Major defects and construction fraud are a rare exception to the rule, but nevertheless appear to be on the rise.