Editor's note: This article is part of Construction Dive's 50 States of Construction series, in which we talk with industry leaders across the U.S. about the business conditions in their market.
The next Silicon Valley may be 800 miles north in Washington state, where tech giants like Google and Facebook are growing their roots. There, contractors are seeing booming demand for housing and office space with no end in sight — or so it seems. The push is particularly strong around Seattle, where construction companies are grappling with limited skilled labor availability and huge project backlogs.
Yet contractors in the state are hopeful that construction activity will remain robust, according to Heather Bunn, vice president of business development for the Bellevue, WA–based Rafn Company. The commercial contractor, which operates in the greater Seattle metro area, specializes in green building, multifamily housing and historic renovation.
Construction Dive spoke with Bunn about why construction activity in the region is booming, how the state is grappling with a skilled labor shortage and what sets Washington's efforts toward sustainable design apart from the rest of the U.S.
Editor's note: This interview has been edited and condensed.
What are some of the most active areas in Washington and what are some of the biggest projects there?
BUNN: Seattle is definitely the booming city, although there’s a lot of activity in Vancouver and Spokane. The majority of large projects are in some way related to either Google or Amazon or the expansion thereof, meaning office buildings and apartment buildings to house their workers.
How has growth in the tech sector impacted construction activity in the state?
BUNN: It has been explosive. The amount of construction related to tech companies and their workers has tapped our region beyond the resources that are available. We are doing a tremendous amount of outreach in terms of recruiting labor and expanding the non-union or merit shop apprenticeship programs around the state to increase the number of potential workers. There has been an increase in outreach to universities and local high schools promoting the trades.
There is also some effort at pre-manufacturing components or elements of rojects to reduce the amount of labor required on-site.
What does demand there look like today, and what kind of factors are driving it?
BUNN: Apartment construction, in particular, has really taken off in Seattle, in terms of both high-rise and mid-rise infill projects targeting a variety of income ranges. There are contractors involved as well as builder-developers. Unfortunately, we only have one group of subcontractors and none us of are very good at sharing, which really puts the pressure on the industry. It's also had an adverse effect on the homeless population in Seattle because we still have a shortage of apartments even though we’re building at a higher rate than we ever have in the past.
Has your company seen a significant change in demand for green building and sustainability over the last few years?
BUNN: Our region is a little bit unique in that most everybody who chooses to live in Seattle does so because of the outdoors. There's an environmental sensitivity that goes with everything we do and all of the construction projects we're involved in have some element of sustainability that is part of the project or intrinsic to the project. Almost every apartment building we build meets a LEED Silver level of construction, regardless of whether the client chose to pursue that certification. On top of that, there are many one-off projects that have significant accelerated sustainability goals.
We see people achieving the level of sustainability necessary to get a Living Building Challenge certification, but not necessarily going for the certification. They're building projects to meet a super-high degree of sustainability but doing it for personal reasons as opposed to doing it for the actual certification. The idea that we are able to build buildings that reuse rainwater to be able to put power back on the grid is not that unusual anymore.
Have state and local governments played a role in that growing demand for sustainable construction?
BUNN: One of the things we are seeing is a much more rapid evolution of the building codes to create a more sustainable building. Renewable energy is now mandated as part of a typical apartment project. We are seeing more opportunities to build more sustainable components as a result of these evolving building codes, and they are evolving faster.
We’re seeing a lot of clients choose heat-recovery ventilators for apartment buildings and we are also seeing clients incorporating photovoltaic (PV) panels on the roof as standard equipment. Some of our clients are choosing to build buildings that can support an entire roof of PV panels even though they may not be covering the roof with panels at this time. They are building the infrastructure to allow that to happen in the future.
How has the next generation of younger, millennial workers influenced demand for sustainable office and residential buildings?
BUNN: Everything that we build has sustainability components regardless of whether the clients are choosing to go for certification. Having a clean building is very important for workers and residents, so clients are making those choices as a matter of course to have a more marketable product.
There’s also been a big push for transit-oriented developments here over the last 10 years or so. As we expand our light rail system, projects are popping up at future station locations. We're seeing a big shift to having bicycle storage and bicycle repair facilities in apartment buildings. There has been a significant shift away from providing parking in every construction project. Many downtown Seattle projects no longer require parking at all, and that trend is likely to continue.
What are some of the biggest challenges facing contractors in your market?
BUNN: Due to a number of changes in the way buildings departments are structured and because of the incredible backlog of projects, it is taking longer and is less predictable to get through the permitting and entitlement process. Planning, staffing projects and finding subcontractor resources is made additionally difficult by the lack of predictability in the start dates.
There is no end in sight — there’s a tremendous amount of outreach necessary to find and recruit new subcontractors. If somebody says they’re not available to do a project, we check back in a week or two because things change so fast that somebody who maybe wasn't available two weeks ago might actually now be available. We’re trying to match the subcontractor’s capacity with our need as closely as possible.
What opportunities are you most excited about in the state's construction industry?
BUNN: There is a significant push statewide — and specifically in Seattle — to upgrade our older building stock and especially historic buildings to meet current safety requirements in terms of seismic retrofit, adding fire sprinklers and those sorts of things.
There's also opportunity with some of the changes in both zoning and building codes, and eventually developing alternative construction types. Right now we're looking more at making our mid-rise buildings taller and using different materials such as cross-laminated timber, light gauge metal or some other componentized options, so we're seeing some changes in construction technology that can help us with production.
Do you see a slowdown in migration to the Seattle area anytime soon?
BUNN: I have to think it’s going to slow down a bit, but I suspect we’ve got at least a couple more years of migration. From a business development standpoint it’s great. From an operations standpoint it presents challenges. I hope we find ways to increase the number of those interested in the construction trades.
