Penthouse Pause: COVID-19 Cripples Some High-Rise Renovations

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Stacks of Ann Sacks tile and drywall mud waiting for workers

Three weeks ago, I would have said my best guess was that I was a hard six weeks shy of putting my Claridge Penthouse studs-in renovation on the market. Today, I can’t answer that question – and only partly for the reason you think.

For those new readers discovering CandysDirt.com while sipping a quarantini, Penthouse Plunge is a series of articles chronicling my purchase and renovation of a double penthouse at the Claridge on Turtle Creek. I’ve split the combined unit back in two and renovating one to sell with the remaining unit becoming my home. Who knew back in September 2019, that my largest renovation project ever would get caught up in a global pandemic?

Fears, Peers, and Hears

All was moving along until a few weeks ago. During the week of March 16, word began percolating among Turtle Creek high-rises about precautions. A few instituted bans on contractors entering their buildings. That few convinced many more do to the same thing (nothing like peer pressure). HOAs are using the Dallas County shelter-in-place order as their cover while renovators cite construction as one of the city’s essential services permitted to continue.

While not all buildings are closed to construction, my informal poll puts it at above 60 percent with frequent changes. What I’m hearing from friends who live in other buildings is that these actions have two rationales. Sure, there are health concerns. In Dallas, high-rises favor older residents who are more at risk. But there’s the largely whispered reason. Noise. Newly-homed neighbors don’t like hearing construction noise. Proximity of home-bound HOA board members to a renovation shouldn’t be a surprising ingredient in the soup. (lucky me).

This is hardly a Dallas thing. The Associated General Contractors of America trade organization says 40 percent of contractors nationwide have experienced layoffs. Some of these are voluntary, some forced.

You can just about picture the large living room with fireplace

Few HOAs consulted with their renovating owners before their shutdowns. Access was flicked off like a switch by HOA boards – within 24 hours of The Claridge saying contractors were OK, the board reversed themselves and closed – now until at least April 30.

Being a nuance guy, this bothers me. An orderly shutdown might have had a huge impact on projects while introducing minimal risk. For myself, I could have gotten two projects done and happily waited for my ever-late cabinets to arrive – which will arrive before the latest shutdown extension is lifted (or perhaps extended). But in my experience, good outward communication is a skill lacking in many HOAs.  

These decisions to preserve health (and hearing) have a monetary impact on renovators. We each stand to lose at tens of thousands of dollars (if not more) as this plays out. Renovations large and small are in-process by people wealthy and not. Is there a point where the money runs out in delays? During the Recession, as employment dropped, residents nationwide lost their homes in foreclosure. It’s not far-fetched that some homeowners paying double living expenses will get pushed over a financial cliff – especially if they lose their income. What high-rise (or neighborhood) wants to see unfinished building sites pop onto the market at bargain-basement prices?

In an April 10 story, The New York Times quoted an appraiser:

“My position as an appraiser is I’ve got to get through the next six months, and we’ll have more business than we know what to do with. Lots of refinance, foreclosures, workouts, and, I’m assuming, a lot of divorces.”

This will be a glorious master bath covered in Ann Sacks marble.

Minimize and Compromise

Before I sound like a money-grubbing schmuck who’d gamble neighbors’ health to preserve his own nest egg, consider this:

Almost every high-rise condo has a separate freight elevator that is accessed near a loading dock. Contractors would walk from their vehicles to the freight elevator, ride up to the unit’s floor and walk the corridor to their jobsite (in my case about 15 feet). These trips could be limited to morning entry and evening exit. Workers could wear masks until they’re in the unit and the elevator could be sanitized each day. I volunteered to personally sanitize our elevator, escort my workers in and out, seal them into the unit with plastic sheeting and leave the HVAC off to minimize air flow.

However these HOAs think that’s too much exposure for residents.

Fine.

But not one building I spoke to has limited entry to their buildings for guests, housekeepers, assistants or any rando from Tinder. The only concession the Claridge made was that food deliveries are stopped at the lobby and delivered by staff.

Of those I’ve communicated with, not a single high-rise with valet parking has stopped that service, which frankly endangers the valet as much as the resident – regardless of how many alcohol wipes and gloves are used, everyone breathes.

Future glam kitchen waiting for cabinets

So how are small groups of masked contractors, coming and going at the same time in a separate elevator, more of a risk than a housekeeper who cleans how many different homes per week? To a valet who is in how many residents’ cars every day?  Not to mention everyone’s personal lives outside the building. And lord knows where residents’ guests and family members have been – and they’re in the same passenger elevators as every other resident.

Maybe you’re still be thinking it’s right to bar contractors. Fine. But if you’re seriously trying to limit the vectors of a contagion, you limit them all, not one.

In only barring contractors, HOAs are giving lip-service to safety and judging contractors as being riskier than anyone else. They look like they’re doing something without having to inconvenience almost anyone – or critically evaluate the situation.

The Aftermath

Buildings will reopen to contractors the same way they closed, via peer pressure. When that happens workers will be elsewhere, demand will be very high, resulting in even longer delays. It’s easy to see my six-week completion (whenever work restarts) stretch to months as contractors’ schedules refill as forcefully as they suddenly stopped.

mm

Jon Anderson

Jon Anderson is CandysDirt.com's condo/HOA and developer columnist, but also covers second home trends on SecondShelters.com. An award-winning columnist, Jon has earned silver and bronze awards for his columns from the National Association of Real Estate Editors in both 2016, 2017 and 2018. When he isn't in Hawaii, Jon enjoys life in the sky in Dallas.

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Comments

  1. Dr. Timothy B. Jones says

    Having been President of a Turtle Creek building, I sympathize with the HOA’s plight. No one once to be out on a limb if a resident gets infected and dies. Having said that, you make a very logical and compelling argument that seems reasonable to me given the scenario you laid out. It wouldn’t work in The Wyndemere or The Mayfair (Fram, the developer, didn’t believe in loading docks or dedicated freight elevators.) But it seems to be fine for others. As Board President I was always concerned about the number of rental units and the potential for foreclosures….both can kill the appeal of a building and impact the quality of financing available……and thus impact every homeowner. So many developers/flippers/renovators on speculation, are thinly financed anyway so delays of this pandemic nature can bankrupt someone too quickly. No one wins when that happens. I hope you will be back at work soon Jon! We need middle ground that is both safe and reasonable but also practical! You have the same property rights to your units that your neighbors have to theirs….and finishing your project will have exponential benefits to them as well. Good luck!

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