Cost of Construction Discussion Summary

Cost of Construction Discussion Summary

(May 13)  More than fifty MAHC members had an engaging discussion on the status of rising construction costs, organizational approaches, and brainstormed systemwide approaches that included:

  • Identify opportunities for sharing the increased risk of increased costs across multiple parties (developer, contractor, syndicator, lenders, municipality, MSHA)? Might reduce some of the padding in bids to address rising costs.
  • Support ARPA funding use for LIHTEC. See below for the Sen. Collins’ co-sponsored LIFELINE bill that addresses this and an article from Pew article on this: https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/04/25/rising-construction-costs-stall-affordable-housing-projects?utm_campaign=2022-05-02+SW&utm_medium=email&utm_source=Pew&subscriberkey=003U000001GBmneIAD
  • Bond for more money to get shovel ready projects built and maintain the pipeline. We can’t pause our State’s economic growth by not addressing this issue. Can consider preventing the increasing cost cycle later.
  • Talk with Finance Authority of ME on gap financing or other solutions.
  • Engage with DOL, AGC and others on workforce development
  • Identify projects that are ready, that are in particular need, to find unique solutions
  • MSHA follow up on:
  • Clarity of structure for limited notices to proceed ($1 million – $3 million). How should these work and what’s the timing?
  • Bulk purchase – is there a broad entity that can do this? (wood, steel)
  • Review cost caps (TDC has increased)
  • More opportunities to bring lenders together to discuss this issue

For a full summary, click: Summary-RisingCostConstruction-MAHC 5.9.22.