ERC for Home Builders

Supply Chain Challenges Home Builders Faced

Homebuilders in the United States faced several supply chain challenges during the COVID-19 outbreak, which impacted the construction industry as a whole. These challenges were a result of disruptions in the supply chain caused by the pandemic. Material shortages of lumbers, OSB (oriented strand board), floor tiles, steel, and paints were major challenges that impacted their business

Ivory Homes, one of Utah's largest home builders, found itself caught in the midst of a lumber crisis. The lockdowns sparked a surge in DIY home improvement projects, straining lumber supplies. Prices skyrocketed, and Ivory Homes had to navigate the intricate dance of balancing construction costs and home affordability for its customers. The lumber shortage was felt acutely as they sought to meet the demand for new homes.



Edge Homes as well as a couple of other prominent home builders in Utah, faced significant challenges due to the shortages of oriented strand board (OSB). The closure of mills and factories due to pandemic restrictions resulted in a scarcity of this crucial material. Project delays and increased costs loomed as Edge Homes worked diligently to maintain construction schedules and deliver quality homes

Floor tiles and steel, essential elements of home construction, posed their own set of challenges for home builders companies including Hamlet Homes. Pandemic-induced disruptions in production and transportation led to delays in deliveries and heightened expenses. As they strived to uphold their reputation for quality homes, Hamlet Homes grappled with the unpredictability of these vital materials.

Floor tiles and steel, essential elements of home construction, posed their own set of challenges for home builders companies including Hamlet Homes. Pandemic-induced disruptions in production and transportation led to delays in deliveries and heightened expenses. As they strived to uphold their reputation for quality homes, Hamlet Homes grappled with the unpredictability of these vital materials.

Even seemingly minor components like paints felt the pinch during the pandemic. Candlelight Homes, known for its attention to detail, had to adapt to the disruptions in paint production and distribution. Delays in securing paints added complexity to their projects, highlighting the far-reaching effects of supply chain challenges.

As material shortages persisted, builders across the state faced project delays, increased construction costs, and the ongoing challenge of balancing profitability with the affordability of homes for their clientele.

Impact Suspension of Services Made for Home Builders Companies

During the COVID-19 lockdown, home builders grappled with significant challenges related to the suspension of services and the implementation of COVID-19 safety measures. For instance, a Michigan-based construction company faced a complete shutdown of real estate and construction activities for the second and third quarters of 2020. This abrupt halt in operations severely impacted their ability to carry out inspections, as county offices were closed, causing delays in project timelines and creating uncertainty.

Additionally, the lockdown measures led to reduced services for many home builders. Stringent hygiene protocols required daily sanitation of equipment, adding both time and cost burdens. Moreover, capacity restrictions imposed by social distancing rules posed another hurdle, limiting the number of workers who could safely operate in confined spaces. These restrictions not only resulted in reduced productivity but also necessitated careful scheduling and coordination to ensure compliance with safety guidelines.

In response to these challenges, home builders had to adapt rapidly. Many implemented strict safety measures, including sanitation protocols and the provision of personal protective equipment, to protect their workers and clients. They also reshaped their project timelines and strategies to accommodate the reduced workforce and adhere to social distancing guidelines. The home building industry's ability to pivot and find innovative solutions during these trying times exemplifies its resilience in the face of adversity.

How the Employee Retention Credit Can Help Home Builder Companies

Employee Retention Credits (ERC) offer valuable financial relief to home builder companies that faced challenges during the COVID-19 pandemic. These credits can significantly reduce payroll tax liabilities, easing the financial burden caused by lockdowns, supply chain disruptions, and project delays. By retaining employees with the help of ERC, home builders not only reduce labor costs but also preserve their skilled workforce, ensuring they have the expertise needed to meet future demand. ERC provides flexible funding that can be directed towards payroll expenses, enhancing the overall resilience and continuity of home builder businesses during economic uncertainties. It acts as a financial safety net, allowing companies to navigate challenges while positioning themselves for long-term success in the industry. Home builders should work closely with tax advisors to maximize the benefits of ERC, understanding its evolving eligibility and regulations.