Building development at all stages, from planning to breaking ground to construction, is advancing in Vancouver under the pandemic. It’s a big difference from the Great Recession, when development essentially ground to a halt for years.
During the last few months of the pandemic, contractors have been active: Block 10 started construction, Marathon’s Academy Phase 1 will start construction soon, The Columbia and The Aria apartment buildings have been under steady construction for months and Hurley Development submitted plans for an apartment development.
Permit applications for all types of new development dropped in March, but the city has “seen a steady increase since April, almost to pre-COVID levels,” said Chad Eiken, the city’s director of community and economic development.
“I have been in contact with a half dozen (or more) developers in the last month to inquire whether they are putting any projects on hold because of the pandemic and, interestingly, not one has said they are slowing down,” Eiken wrote in an email to The Columbian on Thursday.
Eiken said that developers are still looking for sites for future developments.
“To me, it feels like there is confidence that conditions are still favorable for development,” he said.
At the Port of Vancouver’s Terminal 1 at The Waterfront Vancouver, construction for the AC Hotel by Marriott is awaiting its start. The hotel, owned by Vesta Hospitality, should be under construction soon, said Chairman and CEO and Rick Takach. Takach said the pandemic slowed the progress, but he’s secured the needed permits, insurance and title. All he needs is to close on the loan and the hotel will begin to rise.
“The time it takes to build the hotel is roughly 19 or 20 months,” he said. “My hope is that we’re opening right when the economy has rebounded. It’s actually a good time to develop if you have the money to get it done.”
Takach said Vancouver is poised to bounce back with its development faster than other cities, including Portland, which is oversaturated with new construction and in-progress developments.
“If I was in downtown Portland, this hotel would be on hold,” he said. “Not just because of the unrest, but Portland has a ton of new supply. There have been so many hotels that have opened and will open.”
Clark County’s construction employment is still going relatively strong during the pandemic compared to the county’s history. A year ago, an estimated 15,700 people worked in construction, but that’s dropped to 14,400 in June 2020, according to Southwest Washington regional economist Scott Bailey. But compared to 5 years ago, it still overshadows the 10,700 construction workers in Clark County in 2015.
“It’s all relative,” Bailey said. “There’s still a high level of construction activity going in the state even though it’s dropped a bit in the last three months. It’s still a very high level of activity.”
Eiken said that single-family and multi-family residential development in Vancouver “is holding fairly steady.”
The city has more than 6,700 apartment units in the works now, from pre-app stage to under construction, which is more than any other time since the city started tracking data a few years ago, he said.
Also, “Block 10 has a large office component, Vancouver and Evergreen schools are still building schools under their respective construction bonds, and HP is moving forward with their master plan application in Section 30, which will be a large commercial project,” he wrote in the email.
While many business owners have compared the COVID-19 pandemic to the Great Recession to get a sense of how much business dropped, Eiken said developers appear to be much less affected under the pandemic.
“Single-family residential construction activity absolutely cratered during the Great Recession due to the mortgage crisis but has remained fairly steady through the pandemic,” he wrote in the email.
Multi-family residential construction before 2008 was not nearly as active as it is now, Eiken said, but after the economy bounced back in the 2010s, apartment projects began springing up in Vancouver.
“It wasn’t until we came out of the Great Recession that apartment construction surged, whereas it was booming before the pandemic and has not really slowed down that much since the demand for housing is still high,” he said.
Eiken said there are still uncertainties in the future of Vancouver’s development. Factors include a potential COVID-19 vaccine, federal financial assistance and “how the pandemic will change behaviors such as fear of crowded spaces even when it’s over.”
“There are so many unknowns,” he said.