Facing Down Challenges in Multifamily Construction

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LOS ANGELES—Developers and contractors used to have something a combative relationship but that has changed, especially in the multifamily space, according to Mike Rovner, president and founder of Mike Rovner Construction, which works mostly on apartments. Collaboration, now, has become the hallmark of this relationship and to great effect, he says.

That is one example of a challenge that used to bedevil multifamily construction. These firms now “see the advantage of working together and obtaining multiple opportunities together,” he tells GlobeSt.com.

Apartment construction is booming, especially in the state of California, but that doesn’t mean the industry doesn’t have its challenges, such as onerous regulations and the problem of retaining subcontractors.

For example, bureaucracy and red-tape in the construction process can easily cause a job to be delayed, Rovner says. For example:

• Environmental Impact. The construction site owners need to demonstrate that the project will not have a negative impact on the environment.
• Transportation Research Protocols. There needs to be sound research into the possible impact of large-scale transportation projects.
• Federal Funding. The government needs an accurate estimation of costs, risks identified and mitigated along with clear funding strategies. Project participants roles, their responsibilities and processes also need to identified.
• Safety Requirements. There are strict rules regarding hours of service, safety of workers, and other guidelines. Some states, such as California, have even stricter guidelines. Specific conditions must be fulfilled before construction begins plus ongoing inspections and reporting is required throughout the project. Injuries that may occur can slow down or halt the project until the situation is corrected.

Another issue is keeping subcontractors on tap during a very busy cycle. “Construction-wise, the state of California is very busy and has been over the last few years,” Rovner says. “There are more jobs than contractors.” To that end, contractors are ensuring their teams of subcontractors are making profits and fast-tracking their payments, Rovner says.

As it happens, contractors are making use of collaborative relationships to address these problems, Rovner says. “The most successful jobs are when the contractor, the developer and their consultants work together as a team. We then all try to make each other win.”