Home renovations rebound despite delays, higher costs

Home renovations rebound despite delays, higher costs

  • Charles Jacob
  • 02/2/22

Plunging into planning a major remodel of his newly purchased Menlo Park Eichler shortly before the COVID-19 shutdown last year, tech exec Andrew Fedak could not possibly have foreseen delays caused by a once-in-a-century global pandemic.

The city's all-online permitting process has been challenging and lengthy, he said. In the meantime, he and his family have had to spend months in alternative housing, leading to spiraling costs. Product and material shortages caused by transportation delays also have added to the project's cost and timeline.

As the world slowly edges back to some semblance of pre-pandemic normalcy, Fedak is optimistic construction work will soon begin in earnest. Local building professionals, however, say it's too early to tell whether the impacts of the shutdown are over or will linger well into 2021.

John Hammerschmidt, founder and CEO of the Los Altos-based design-build contracting firm, Hammerschmidt Construction Inc., said local residents are finally feeling comfortable enough to move forward from the longer-than-normal planning and permitting stages on more ambitious home remodel projects.

"We are seeing people pursue master-suite additions and even whole-house remodels," he said. "Though my company is still doing smaller projects, as well."

Fedak said he finally obtained permits from Menlo Park's planning department in May to move ahead with the renovation of his 50-year-old, midcentury-modern home on which he started demolition back in October.

Though the mainly cosmetic upgrades encompass his entire house, Fedak is adding a modest 50 square feet to his home's size to accommodate the future needs of himself, his wife and newborn child.

He said the entire permitting process, much of which can occur in person during normal times, has been handled online during the COVID-19 era.

"At times, I would say staff has been very responsive," said Fedak, founder and chief strategic officer of Abaxx Technologies Corp. "I know everyone is doing their best."

Local cities can yield varying experiences and lengths of time spent in the permitting stage, according to Hammerschmidt. He credited Palo Alto for having one of the more streamlined processes along the Midpeninsula, adding it takes about a month to obtain a kitchen-remodel permit.

After demolition work began at his house back in October, Fedak had to relocate his family for the duration of the project. What would have probably taken about eight months under normal circumstances could take twice as long, he said. "The added costs are mind boggling," said Fedak, adding the delays are costing him several thousand dollars a week.

He said the slowdown likely will continue to present challenges for his remodel as shipping and handling delays pile up products at the busy California ports of Oakland and Los Angeles from ports in Europe, where Fedak said his new kitchen cabinets have been languishing.

Handling Fedak's remodel is Flegel's Construction Inc. of San Jose. After dealing with business shutdowns and slowdowns caused by observing strict COVID-19 protocols during the past year, owner Scott Flegel said industry conditions are improving as the economy reopens and rebounds. Despite the challenges, there has been a "huge boom" in interest and demand for remodels by homeowners, he said.

But Flegel agrees with Hammerschmidt that trying to predict the second half of 2021 for their industry is tricky, "It's difficult to foresee exactly what's coming," Flegel said. But right now, his company is busy. "I have two projects that come across my desk every week." The pandemic may have contributed to delays in processing permits and getting products like kitchen appliances and construction materials, but it seems to have only increased people's interest in renovating and updating their living quarters.

In statistics compiled by the city of Palo Alto's Planning and Development Services Department, while the number of permits being processed shortly after the shutdown was significantly reduced, activity strongly rebounded by June of last year. During April and May of 2020, only five and 11 permits were open for processing those months, respectively. That compares with 33 in April 2019 and 43 in May 2019. In June and July of 2020, the city had 32 and 50 remodel permits open for processing, respectively. The city of Mountain View also recorded a rebound in remodeling permits submitted to the city — after only a single permit was requested in April 2020 — but overall activity between April 2020 and March 2021 was substantially below the previous year, with a total of 1,142 remodel permits requested versus 1,590 between March 2019 and March 2020, according to statistics released by Lenka Wright, the city's chief communications officer.

As a landscape designer for Palo Alto-based Harrell Remodeling Inc., Lisa Parramore said she never saw much of a slowdown in her side of the business. Outdoor landscape and hardscape additions, renovations, makeovers and updates have been popular among Midpeninsula property owners during the pandemic as outdoor socializing with family and friends became the safest option. But as pandemic-era restrictions ease up, Parramore said demand for her services is higher than ever.

"There really was no slowdown at all," she said of the past 15 months. "Many of our clients realized their backyards and outdoor spaces generally were being underutilized. (The pandemic) brought to their attention things they had previously not realized. They decided to add more beauty and functionality to their outdoor space."

Along with the increased demand that accompanied the pandemic have been those product and material shortages and price increases. Those have added anywhere from several weeks to three months to the projected timeline of her clients' projects, Parramore said.

She has seen the same delays in obtaining permits as everyone else in the local industry. They range from incidental to lengthy. "Some cities, at least, have added staff to help handle the crush," she said. But increased permitting staff can do nothing to ameliorate product and material shortages, particularly in some types of wood — such as redwood for outdoor decks and other structures — and copper used in pipes and plumbing fixtures. Flegel said he has seen cost increases as high as 35% on some much sought-after materials.

Hammerschmidt estimates the rising material prices have hiked the cost of an average kitchen remodel by 10 to 20%. "Supply and demand issues are increasingly becoming a problem," said Flegel, a 40-year veteran of the industry who founded his own company two decades ago.

In the meantime, more normal conditions for the industry are slowly returning — even if in incremental fashion. "We are still not doing face-to-face meetings," Hammerschmidt said of the city permitting process. "But we are starting to see Zoom calls."



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