Jessica Blakely knows to expect delays during the construction process. She鈥檚 used to planning and developing housing projects for the Salem Housing Authority, and her team plans accordingly for those delays.
But one of the projects she鈥檚 especially proud of 鈥� a modern-style apartment complex that mostly serves Oregonians who previously experienced homelessness 鈥� almost missed its opening day.
The reason surprised Blakely: a potential monthslong delay in acquiring equipment needed to connect the buildings to the power grid.
鈥淲e understood it could be an 18-month lead time,鈥� Blakely said.
So, before even breaking ground, they ordered the electrical equipment. The 60-unit housing project needed a box for each building, with meters for every apartment and wiring to help connect to the electric grid.
On the day in November 2023 when it was supposed to arrive, Blakely鈥檚 team got a notification that the equipment wouldn鈥檛 ship for another four months.
Housing providers across the state are reporting similar snags. Delays and amended timelines are par for the course in the construction industry, but in recent years it鈥檚 been especially challenging to get the pieces of equipment needed to connect apartments and clusters of homes to the larger electricity system.
The delays come as Oregon is in dire need of more homes. Lack of affordable housing is the to the startling number of people experiencing homelessness in the state. Gov. Tina Kotek set an ambitious goal of building a year when she took office. The state鈥檚 latest budget includes to address the housing and homelessness crisis.
Meanwhile, developers point to the numerous delays they face, from long wait times for permits to challenges with funding, as barriers to building more housing. These problems are compounded when crucial equipment is significantly delayed.
Electrical manufacturing experts say the reason it鈥檚 so hard to get electrical equipment is, at the core, a basic supply and demand imbalance: the push to electrify everything from heavy industry to transportation is rapidly driving up the demand for equipment used to connect to the power grid. Suppliers can鈥檛 make and distribute the equipment fast enough to keep up.
Risks and costs of long delays
In the housing world, the pieces of necessary electrical equipment go by a variety of names: meter box, electrical box, power pack, shutoff, meter pack, and so on. People across the nonprofit and for-profit building industry 鈥� including engineers, electricians, architects, contractors, and utilities 鈥� tell a similar story: that the equipment to connect homes and apartments to the grid has been hard to come by. It shows up eventually, but in some cases projects are waiting one to three years for the correct equipment.
Whether the housing developer is a for-profit company or a nonprofit, delays cost money.
At Sequoia Crossings, the Salem Housing Authority project, a delayed opening could have threatened to bankrupt the complex before it ever got to serve residents.
Blakely said the apartments are geared towards Oregonians who would benefit from having access to social services on site. Rent is capped at 30% of the resident鈥檚 income, which has to be to live at Sequoia Crossings. The project鈥檚 funding is mostly from grants and subsidies that could disappear if a housing project doesn鈥檛 open close to its target date.
Blakely was feeling pretty good about how far in advance they ordered the equipment. And because the housing authority would be covering the cost of utilities for each apartment, the equipment wasn鈥檛 as complicated as what they need for other developments.
鈥淎ll we needed was the power supply pack for each one of the residential buildings, all in one box,鈥� She recalls. 鈥淭hey weren鈥檛 individually metered, so we thought, 鈥楬ey, piece of cake, this one鈥檚 going to be the easy one. It鈥檚 not one of our complex buildings. It should be a slam dunk.鈥欌��
Instead, they learned the power supply packs might not show up until after they were hoping to open the building to residents.
鈥淪o, we panicked.鈥�
That鈥檚 how Blakely found herself talking with U.S. Rep. Andrea Salinas, D-Salem, about power packs. The Democrat represents a swath of Oregon from Tigard to Salem, and was visiting the construction site for a planned Veterans Day tour when Blakely mentioned their problem with electrical equipment. Salinas鈥� staff started making calls to see if they could help.
鈥淭hey say I give them too much credit,鈥� Blakely said. 鈥淏ut I cannot tell you what magic wand they swung. They had called and rallied enough people to find a power supply pack in the back of a warehouse across the country, for which our contractors got in a truck, drove over, picked it up, got it back, and delivered it on the timeline that we had originally anticipated 鈥� so we were able to open the building on time, thankfully.鈥�
It feels like a supply problem 鈥� but it鈥檚 not exactly
Blakely wondered if there was a problem with supply: that, perhaps, somewhere along the line, a crucial manufacturer had shut down, or there was a problem getting a certain component from another country.
However, experts say there hasn鈥檛 been a downturn in production. Instead, they point out a rapid rise in demand is making it harder for housing projects like the one in Salem to get equipment on time.
Spencer Pederson is the senior vice president for public affairs at the National Electrical Manufacturers Association. The Washington D.C.-based trade group represents nearly 400 electrical manufacturers across the country.
Pederson said company leaders are telling him they鈥檙e the busiest they鈥檝e ever been.
One CEO told him, 鈥渆lectricity has only been really exciting twice in history, once when it was first invented 鈥� and now,鈥� Pederson recounts. 鈥淪o that should give you an idea of the amount of activity in the industry.鈥�
The rapid rise in electricity demand is a confluence of things, he said. On the consumer side, the pandemic saw a rise in home renovation projects. Also, there鈥檚 been a continued ramp-up of electric car demand, triggering demand for home charging stations and roadside equipment 鈥� all of which needs to be hooked into the grid.
Pederson said those things were already pushing up demand when the U.S. passed two landmark pieces of legislation: the bipartisan infrastructure law and the Inflation Reduction Act, both jampacked with federal dollars to help move the country away from fossil fuels. That means switching things like heavy machinery and industrial operations to electricity.
And if that wasn鈥檛 enough, Pederson said the rise in electricity demand for large data centers is pushing up demand for both electricity and electrical equipment needed to power and cool the concentrated mass of computers. Oregon has a number of such centers holding information for Google, Facebook, Instagram and others.
鈥淎 lot of those products that are going into some of the larger multi-family housing complexes are the same products that are going into just new home construction and in data centers,鈥� Pederson said. 鈥淎nd so there鈥檚 just a very unusual demand right now for many of these products.鈥�
Pederson said these delays touch every part of the construction industry, including nonprofit builders like housing authorities, large corporate builders and local development companies.
Uncertainty, delays flummox for-profit builders
Jessie Dhillon is the vice president and co-owner of Portland-based Carla Properties. It鈥檚 a family-run company founded in the 1960s, although Dhillon laughs while saying she鈥檚 the first person from outside the family to join the Carla Properties leadership team.
Dhillon said the company manages more than 2,000 apartments at over a dozen properties across the Portland metro area. Its newest development is a 162-unit apartment building in Troutdale. It was supposed to open in June 2023.
鈥淚t didn鈥檛 quite work out that way,鈥� Dhillon told OPB.
Her crew expected the needed electrical equipment to arrive in April 2023.
Dhillon said they got a notification in April that the equipment wouldn鈥檛 arrive until June, the intended opening month.
鈥淭here鈥檚 so many things that happen between the time that we get power and somebody gets to move in,鈥� Dhillon said. 鈥淲hen we get power inside these buildings, we can now finish our drywall, and the mud and tape will stick. We can do all of our finished carpentry work.鈥�
It meant until the power was brought to the building, the apartments sat 85% done.
鈥淎nd then, the equipment wasn鈥檛 coming in until July,鈥� Dhillon recalls. 鈥淎nd then, the equipment wasn鈥檛 coming in until September. And then, October, and in the beginning of October, we were promised that the equipment was on a truck and it was going to be delivered. Come November, we heard nothing and we didn鈥檛 get the equipment.鈥�
Similar to the Salem Housing Authority, the folks at Carla Properties started calling friends in the industry across the country. Dhillon estimates they reached out to 10 different sources and couldn鈥檛 find the needed material in a warehouse anywhere.
Then, like magic, one day in December 鈥� six months after Dhillon had hoped to rent out the first apartment 鈥� all the needed electrical equipment showed up.
鈥淥ur electricians and our staff worked like crazy to put these big shutoff switches on the ends of the buildings and put the meters in and call for electrical permits and call for inspections,鈥� Dhillon said. 鈥淭hey worked really, really hard to get everything up and running.鈥�
The first building in the complex opened in the middle of March 2024, nearly 10 months after its planned debut.
鈥淓lectrical equipment was the biggest delay in this entire project,鈥� Dhillon said.
Dhillon said it鈥檚 well known in the housing industry that electrical equipment is hard to come by quickly, but her experience in Troutdale shows it鈥檚 exceeding the generous wiggle room most contractors build into timelines.
Longer timelines, she said, drives up costs.
Back at the Salem Housing Authority development, Blakely doesn鈥檛 anticipate starting construction on anything new until at least 2026 鈥� and only if constraints in getting electrical equipment ease. She鈥檚 worried commercial builders could make the same choice, slowing the production of needed housing and further exacerbating the current crisis.
鈥淭here鈥檚 housing needs at every level,鈥� Blakely said. 鈥淭his could potentially become a federal issue 鈥� and I hope they hear it, and I hope they help, because I believe there is a solution. I just don鈥檛 know what that is right now.鈥�
This story comes from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.
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