Skyrocketing costs force some N.B. contractors to walk away from housing contracts

The cost of building material has skyrocketed to the point where some Fredericton-area contractors are now putting construction projects such as houses and apartment buildings on hold. 

Others have started buildings but can't afford to finish them. 

Jack Youssef, who owns the property development company Javo Properties, said he's had to walk away from a project on Fredericton's north side "indefinitely." 

"We got the foundation in," said Youssef. "We were all ready, prepped and ready to go. We had our anchor tenant with our letter-of-intent signed. Our pricing was all locked in.

"When we went to start framing, our lumber costs alone went from about $27,000 to about $87,000." 

On the city's south side, another contractor is powering through the record high prices of lumber and other building supplies in order to finish.

Four years ago, Youssef Brothers Construction built a 24-unit apartment complex in Fredericton. He's now building a nearly identical one in the city's uptown.

"That development is about $700,000 more than the same development four years ago," said Louie Youssef. "It's crazy. But it's not just lumber. Lumber is probably $100,000 extra of that cost."

He said he'll have to make that money back by increasing rent once the project is finished. 

Those rapidly increasing costs led two dozen contractors and politicians to meet Wednesday night in Maugerville, northeast of Fredericton, to try to come to terms with the almost daily increase in building costs.

Compounding the issue is the influx of people moving to New Brunswick from outside the province and a red-hot real-estate market. 

"We have such an influx of people that want a piece of what we have now that it's eventually possibly going to price New Brunswickers right out of New Brunswick," said Youssef.

"If you're a builder that's done well for the last 10 years, my best advice to you is to take a year off. And come back when it's over hopefully."

Lumber not the only material spiking in cost

While the ever-increasing cost of lumber was often cited as the main culprit, contractors say other materials are also following the trend. 

"Almost every single material," said Jenna Holland of Holland Homes. "From lumber to siding to any type of metal, soffit, fascia, exterior and interior doors — it's all gone up."

And despite the high costs, many materials have become scarce as demand is so high.

One contractor said he's had to call multiple suppliers for sheet rock to finish a project, and the material was so delayed workers had to cut holes in finished walls once it arrived to install it because construction had to continue on without it.

Youssef said it was a struggle to even order bathtubs for his project. He ordered them months ago, and they've yet to arrive. Although the building is on hold, he won't cancel the tubs, because he doesn't know how long it would take to reorder them.

Some at Wednesday's meeting have cancelledcontracts to build houses because it's become unaffordable. Others are considering simply walking away from contracting for at least the summer, or until prices come back to Earth. 

Meeting organizer Lloyd Dutcher said he's had to cancel contracts to build homes for people who have already sold the houses they've been living in. That's left them no place to live after the closing date.

"It's awful," said Dutcher, who said he'll likely hang up his tool belt once the houses he's currently building are finished until prices come down.