Build It

A Tribute to Japanese Engineering

I think everyone's hearts and prayers go out to Japan this morning after one of the largest earthquakes on record, anywhere.  

One thing that struck me this morning was the low number of reported deaths (so far) particularly in one of the world's most populated cities.  As of 10:00 AM PST this morning, MSNBC is reporting "hundreds" dead which is a very small number considering that the death toll from the recent Haiti earthquake (a full 1.9 magnitude smaller) has been pegged at around 47,000.  The difference is staggering.

So much of this has to be tied to building codes and engineering, and the fact that we're seeing less destruction in Tokyo than one would expect after a massive earthquake like that.  A large reason is that Japanese engineers design buildings with earthquakes in mind and build in the ability for buildings to "sway" and absorb the waves, rather than remain rigid and crack at movement points.  Here's a great video from this morning that illustrates it perfectly:

Imagine the loss of life and property damage if just the three buildings in this video crumbled, much less the hundreds of other skyscrapers in Tokyo.  It really goes to show you what kind of impact the building community can have in preparing for and preventing the worst when a natural disaster occurs.  Something we should keep in mind here in San Francisco.

Good luck and god speed to all those in Japan.

 

Jared Willis

Follow Up: The high price of nothing

After my post yesterday, a reader brought up a really good point.

In order to fill the news void that has been vacated by actual reporters, many outlets now rely on public reporting or the "man on the street" perspective.

This is especially rampant on local news, but it always amazes me when a news institution like CNN starts reading Twitter posts and reader emails as their way of reporting the news.  Now I know there are some really educated people out there that CNN may be talking to, but I just don't feel that I'm going to get great investigative journalism from someone whose Twitter name is "@Nooz_Junkie69".  

Sure this way is much cheaper than paying actual reporters, but are we, the audience, actually benefiting from this style of "reporting"? 

Again, I submit to you, that free or cheap is not always better and that one of the few constants I've found in life is that you get what you pay for.

Jared Willis

The high price of nothing

Listening to talk radio this afternoon, I heard Charles Osgood (of the Osgood Files) talk about some of the financial issues facing radio (and specifically talk radio) these days.  He spoke about how radio was struggling with an issue that faces traditional news outlets: the reduction in staff due to budgetary constraints.

As part of the reasoning for these constraints, he listed the inability for traditional media outlet sources to make money over the internet for their content.  As I've written about many times in the past, there have been very few traditional industries that have figured out how to maintain revenue levels once content goes digital.  This has been a large part of the death knell that has sounded for newspapers.

Osgood was not necessarily lamenting a drop in staff in the printing department or ad sales, he was mostly talking about the loss of journalistic talent which drives the papers and talk radio stations.

This got me thinking about a seemingly unavoidable scenario: what happens if no paper/radio news source can figure out a way to remain a profitable business?  What if all the great content that we expect from people like the New York Times is no longer available because the business model just doesn't work anymore?  What price might we be paying long term, by refusing to pay short term?

My guess is that many people won't know what a good thing they have now until it's gone.  I would bet that, should traditional media sources like major newspapers disappear, people would be in support (in hindsight) of paying $0.50 for their daily digital version of the paper.

The internet has done a great disservice to society in the sense that it has made everyone believe that if you get it on the internet, there was no cost to get it up there and therefore should be no cost to get it out.  I fear that all digital content providers (newspapers, music publishers, reprographers) will get so beat down by people demanding something for nothing, that we will all wake up one day and realize there was indeed a very high price to be paid for that content.

Jared Willis

The end of the experience?

I was just reading an article about Starbuck's recent attempt to counteract the attack of McDonald's and Dunkin' Donuts on their coffee stronghold.  For those of you who don't visit a Starbucks often, I'm talking about Starbucks recent introduction of instant coffee, ready to be made anywhere at any time.

I imagine for those regular Starbuckers, instant coffee seemed like the last thing that Starbucks would put out.  Isn't Starbucks supposed to be about the experience?  About coming to a local coffee shop, hearing the beans being ground, seeing the barista that knows your name and drink from memory?  Is Starbucks really lowering themselves to bulk instant coffee by the pound?

You have to hand it to McDonald's.  They brought the coffee giant down to their level and in some cases, are even beating Starbucks in taste tests.  The Execs over at McDonald's somehow timed their entrance into the specialty coffee market just right to coincide with the drop in the economy.  It seems that it's no longer about perfection and experience.  It's come back to speed and cost.

I tell you that story, to tell you this story...

I met with a Business Development person from an Architecture firm recently.  I asked about her company's value proposition to prospective clients.

I asked her, "Are you going in to these clients saying, 'Yes, we may charge 6% compared to 4% from our competition, but that's because we're better overall, have fewer change orders and offer better design and that's why we're worth the extra 2%."  She answered that that was the old way of doing it and that now all the Owners care about is that extra 2%.  Their firm has had to swallow their pride in their work and get down to fight in the gutter with the lowest bidding architecture firm.

If you're in the AEC space, this is probably a very familiar story right now.  Seems that everywhere I turn companies are having to throw in the towel on experience and overall value in order to just get the work in the door.  Getting business in the opposite way that they're used to.  As much as I hate to say it (and I really do), the price has finally (but not forever) become the great equalizer.

Some day my prints will come...

I have full faith in the fact that one day soon, life will return to normal, value and experience will again be the new black and we can go back to charging normal rates for our services, but it may not be this day.  

The challenge then, is to figure out that if you can't beat 'em, join 'em and how you're going to make money at whatever level you have to stoop to.  In fact, find out how you can use this "once in a lifetime opportunity" to open doors you couldn't open before.  Go back to those clients that haven't worked with you because of your rates and show them you're hungry.  Since value and experience have gone out the window, they're more likely to be looking at anything that comes their way right now. 

 If you can take it on the chin, smile, ask for more and grow your list of clients, you'll come out happier and more profitable on the other side.

Jared Willis

Community salvation by community demolition

I was listening to NPR this morning and they were interviewing Dan Kildee of Flint, Michigan.  Dan is the county treasurer and he has a unique plan to save his county from the years of foreclosures, fires  and neglect experienced by the economic downturn: knock all the homes down.

The county of Genesee (which includes Flint) has been buying up parcels of foreclosed homes from the bank, giving them control over wide swaths of land long abandoned by residents and they are beginning to demolish homes and business on those tracts of land, essentially returning the land to open greenspace.  Kildee believes that towns in economic despair like Flint, may need to contract about 40% concentrating the population and services in a smaller area, while beautifying once rough or burned out neighborhoods by turning them back into nature.

You can find a great article on this topic here.  There were two things that really stuck out to me when listening to him this morning:

1. He talked about the American obsession with growth and expansion as central to most American's view of our country, and that proposing intentional demolition went against the ideals that most people he talked about this with, held.  That it's been so ingrained in our brains for so many years (since the Louisiana Purchase and Manifest Destiny) that Americans are meant to expand and colonize, against all odds, that we find it hard to comprehend creating a more cramped and close living space.  

2. He used the term "new city design" to describe this chance to start over from practically scratch and to really take control over a city founded on the principle of personal, not public, transportation.  The majority of America was developed after the proliferation of the personal automobile which empowered/enabled us to create these far-flung cities where suburbs were the promised land.  You can see the vast difference with cities developed pre-1900 (San Francisco, New York, Boston, etc.) versus cities built up post-1900 (anywhere in the San Francisco East Bay, large parts of Los Angeles).

These models of suburban community and transportation have not been sustainable and ultimately have failed.  Think of communities outside of Sacramento or in the Central Valley.  The model is: new tract home, shopping center, new housing community, school, new housing community, shopping center and so on.  These places lack what I feel is the traditional definition of community and can not support each other long term.

Begin at the beginning

This really got me thinking about the progression of Transit Oriented Development and Sustainable Building trends and how cities with situations similar to Flint will have a chance to maybe do it right this time around.  A chance for a city to wipe the slate clean and think longer term about how their residents and businesses will interact and thrive.  The Obama Administration is already speaking with Mr. Kildee about applying this philosophy to 50 cities around the nation.

I don't think there's any doubt that our transportation, cities and economies will be vastly different in the next 20 or 30 years and many of our cities are not physically designed to encourage or support the kind of sustainable, connected communities of the future.

The bad economy can be seen as a fresh start, a reset, for many people.  And maybe in this case, a chance for a city founded on 100 year old ideas to rise from the literal ashes of it's burnt out former homes and communities.  

A chance for us to think smarter, even in our own communities, about great and true "placemaking" for future generations and for future sustainability.

Jared Willis

Poor Jobsite Communication May Have Caused Death

I often get up on my soapbox and rant about the importance of drawing/document management in construction, and it often falls on deaf ears with my clients.  They just don't realize the importance that those documents carry on their project.

A very tragic story out of Florida brings the gravity of the importance of construction information to the forefront.  Here' s the headline from the story:

 

"A second inspector testified Tuesday he didn’t see complete plans for the Berkman Plaza 2 parking garage in Jacksonville until after it collapsed in December 2007."

"The inspector was paid to examine temporary supports used during construction. He also said building crews changed materials used in some supports, but he didn’t get new plans taking that change into account."

It seems that the major problem here is that the Inspector, whose job it is to ensure that a structure is safe for inhabitants, did not have updated construction information regarding changes in support materials which he may have deemed unsafe or insufficient.  Because he was unaware that new plans existed, he was not able to inspect the work that may have led to the structure's collapse.

Here's another troubling quote:

"Dickey said he thought the inspectors were doing their jobs and catching problems. But some details weren’t being caught.  For example Mullins said the plans he used were shrunken versions, not the big blueprints commonly used by engineers."

"OSHA lawyer Dane Steffenson had him study a full-sized set of plans, which showed an engineer had specified exact heights to which screw jacks that raise and lower the shoring should have been set.  Mullins hadn’t seen that before on the half-sized version and didn’t know to check for that."

The lack of communication, accuracy and quality led to the death of one man and to 20 others being injured, not to mention the financial impact of lawsuits, reconstruction and disability that the City of Jacksonville will now incur because of poor construction information management.

For those developers and GCs who read this blog (if there are any), please understand the impact that information and how it's handled has on your project.

Jared Willis

Good News for Real Estate Rebound

Adding to the general sense I feel that things are starting to pick up, here's a quick post from the National Association of Home Builders (http://www.nahb.org).  Basically, the confidence level of Single Family Home Builders about the future of new housing construction is on the rise:

"The National Association of Home Builders/Wells Fargo Housing Market Index climbed out of single digit territory to 14 in April, posting the highest level since October 2008 and marking the largest one month increase since May 2003."

Also, the California Association of Realtors reported on March 25th, that home sales increased 83% statewide in February compared with the same period last year.

On top of all that, The Conference Board released figures showing that consumer confidence increased 45% between March and April.

Couple that with some very positive gains in the stock market over the past weeks and I think we are feeling a definite bottom.

Stay positive.

Jared Willis

Construction Starts - November

McGraw-Hill Construction just released numbers for Construction Starts in November of 2008.  Overall, construction starts slid 3% to $454 billion annual rate (the weakest level so far in 2008). 

This decline was mostly driven by the continued downturn in residential properties with a 9% decrease in November.  Here's a bad quote:

"Single family housing has now shown decreased activity in 10 out of the first 11 months of '08."

 

Residential building has plunged 39% year-to-date in both the single and mutli family projects. 

Overall, total construction is down 16% since '08.

Is there any good news?

As I've written before, there are some silver linings in these dark clouds.  Education building rose 7% in November and non-building construction (roads, utilities, etc.) added 1%.

These amounts are going to increase in 2009 with the incoming Obama administration pledging to spend billions on new infrastructure creation including roads and transit systems as well as public buildings like libraries, and schools.  Also, the new administration should fuel a boom in renewable energies construction.

Additionally, while overall commercial construction fell 17%, the growth for Institutional Buildings was up 6% and Manufacturing Buildings were up a whopping 56%.

So...

Essentially, even though this isn't great overall news, I think there are the makings of a good recovery.  For instance, even though residential is down pretty far, we know that inventory is going down across the country which means there are sales and that we're probably pretty close to the bottoming of residential's decline.

Public projects and Institutional buildings are up which will be further driven by President Obama and his WPA-like programs.  And, I think the best news is the major growth in Manufacturing Buildings.  Manufacturing plants increase jobs, increase our exports, reduce our dependence on foreign products and can be the economic engine behind recovery.

I believe that 2009 will not be as bad as everyone is predicting and that we will see a return to semi-normalcy by the middle of the year. 

Let's hope I'm right.

 

Jared Willis

Construction Clairvoyance

Anyone who has been in Development knows that Construction is a lagging industry.  Because of the length of time to construct properties, most construction is building for the market situations of 8 months ago.  On the flipside, Developers have to be part prognosticator in that they have to build for the market demand of next year or beyond.

In the current economy, we're seeing a lot of delay and outright stoppage of construction in some cases.  People can't stomach the market volatility or simply can't get resources to build.  Granted, this is a crisis in itself, but the all out stop in Construction will have greater implications for the future.

There is a real and future need for structures to accomodate future populations which we know are increasing.  One estimate for the San Francisco Bay Area estimates we'll need 700,000 new homes over the next 30 years to house our growing population. 

This economy is not only affecting current projects, but it will create a future housing crisis as the demand for homes far outpaces the existing supply.  In fact, I imagine that if you looked back at the last housing price boom in the early 2000s, it was preceeded by a similar halt in Construction in the 1990s.  Even though times are tough, development needs to continue to meet future demand.

Development needs to have a long-term mindset and, in the words of Wayne Gretzsky, skate to where the puck is going to be, not where it was.

Jared Willis