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Need for bigger timber leads to scarcer pilings

Coastal construction and need for taller timber pilings leads to scarcity

Posted on July 20, 2014 at 12:00 a.m.

GALVESTON, Texas (AP) — A severe shortage of timber pilings, crucial for construction on the coast, is complicating life for homebuilders who are lamenting about longer and longer waits for supply, as demand for new houses and vacation properties surges.

Not long ago, builders could get 12-inch-by-12-inch timber pilings in a matter of days. Now it can take months, and the problem will get worse before it gets better, industry observers say.

“Twelve-by-twelves are by far the hardest to get your hands on,” James Fox, manager of McCoy’s Building Supply on the island, told the Galveston County Daily News (http://bit.ly/1oglogk). “Vendors have stopped quoting lead times; they were saying four to six weeks, then five to seven weeks, then up to eight weeks. They’re not giving us times anymore.”

Mandie Parker, who works in sales at Ideal Lumber Co. on the island, asked a vendor last month for a quote on 20 28-foot-long 12-inch treated pilings. The vendor joked the lead time would be a “million weeks.” It might as well have been — his quote was three months.

“It’s never been quite this bad,” said Jimmy Clore, owner of Alta Vista Builders.

A few weeks ago, Clore, who builds custom homes around the county, called a local lumber yard for pilings and was told he’d have an eight-week wait. Wanting to keep the project on schedule, Clore started dialing. Of 16 suppliers he called, only one could give him quote. That supplier could get Clore the pilings “faster” — four weeks — but at a steep price.

The supply shortage can be traced back several years to a national market collapse that brought housing starts to an abrupt stop. Mills cut shifts and slashed production in response to falling demand. Timber harvests plummeted. Inventory was whittled away. Some suppliers didn’t survive. Labor sought greener pastures in the booming energy industry.

Another culprit is the weather. Timber used in construction around here comes mostly from East Texas and Louisiana, where spring rains made harvesting timber difficult.

Meanwhile, homebuilding across Texas rebounded, and not gradually. It shot up fast, builder Billy Sullivan said.

“It was a pretty aggressive incline,” he said.

The factors all added up to a supply crunch.

“Those suppliers which remain simply have more orders than they can physically produce, so things are out of balance,” said Larry Pikas, president of Breton Woods Builders. “When conditions such as wet springtime weather in East Texas are added to the mix, the gap widens more.”

But perhaps the biggest cause of the shortage is the coastal quest to build houses ever higher, out of reach of storm surge and other flooding, which has spurred demand for larger, longer pilings that require larger trees.

For years, 10-by-10 pilings were the industry standard for home construction on the coast and still are widely used. But after hurricanes Ike and Dolly in 2008, demand rose for 12-inch pilings.

Many structural engineers aren’t comfortable building too high above grade with 10-inch pilings, Pikas said.

Although not required by building codes, many engineers want builders to use 12-inch pilings when the living area of a house is higher than 12 feet above grade, he said. Engineers consider 12-inch pilings to be more stable and have less rocking effect, Pikas said. And building higher tends to reduce flood premium rates, he said.

“Flood premiums are largely based on the elevation of a home relative to the established base flood elevation, so going higher tends to reduce those flood premium rates passed on to customers,” Pikas said.

Not only are structural engineers mandating larger pilings, they’re requiring them to be driven deeper, as much as 20 feet below grade, Pikas said.

And they want builders to use more of them. A few years ago, engineers might have required about 24 treated pilings for a 1,500-square-foot, single-story house, Pikas said. These days, they might require 38 pilings for the same house.

More and bigger trees are needed to meet that demand, which is adding to the problem.

“If you’re buying a 12-by-12 piling that’s 34 feet long, you’re going to need a tree at least 37 feet tall,” Clore said.

The quickly rebounding Texas homebuilding industry also is driving sudden and increasing demand for wood products other than pilings that are more profitable, Fox said. So a lot of large trees that could make pilings are instead cut up into the 2-by-4s, 6s, 8s and 12s used to frame houses, he said.

Timber pilings also are competing with other higher-margin products that require large trees, such as utility poles and bridge trusses, said Kevin Ragon, executive director of Southern Pressure Treaters’ Association, which is affiliated with the Timber Piling Council.

The industry needs a little time to adapt to the increased demand, Ragon said.

“When you get into the bigger trees, you change the market,” Ragon said. “A bigger piece of wood is worth more money, and you make other products out of it. The pilings have to compete in different marketplaces.”

Some suppliers who count coastal builders among clientele hope the industry adjusts sooner rather than later.

“Without pilings, they can’t finish the rest of the beach house,” Todd Toups, sales executive of wholesaler Eastex Forest Products in Houston, said. “I’d love to see six or eight truckloads sitting outside my gate, but that’s not going to happen anytime soon.”

Tightening supplies haven’t caused drastic spikes yet, but when the market shakes out, prices likely will be higher. Some builders are reporting price increases of about 8 percent for 12-inch pilings since January.

Timber piling prices vary, depending on size and height. A seasoned builder with good connections can typically buy a 12-by-12 timber piling for $600 to $700, which includes the cost of transporting the product to work sites.

Still, some builders with large jobs looming have reason to be a little worried.

Rumors have been circulating that an order for thousands of 12-inch pilings to rebuild island public housing complexes Cedar Terrace and Magnolia Homes was causing the drag on supply. But Sullivan, a principal in SLS, which won the bid to rebuild the public housing, said that’s not the case.

SLS hasn’t ordered the 2,000 pilings for the development of multifamily mixed-income complexes to replace housing destroyed by Hurricane Ike, the rebuilding of which has been in legal limbo for years.

But SLS has been making calls to suppliers to see who might be able to fill the order when the pilings are needed, likely by the third quarter. Sullivan said he hopes the market will have adjusted by then.

Some builders use concrete pilings, but those usually are more expensive, Fox said. If timber prices do become prohibitive, more builders might consider using concrete, polyplastic columns or engineered beam wood.

Builders and suppliers aren’t calling the shortage a crisis and most say it’s just a matter of adapting and placing orders much earlier. Mike Lockwood, an owner of Hoffman Lumber Co. in Texas City, is advising his customers to not procrastinate.

The shortage had been in the making for some time but had most recently become noticeable with the demand for housing, Lockwood said.

The industry has seen shortages before, Pikas said.

“To many, it seems like a crisis is going on, but eventually things come back to equilibrium,” Pikas said.

In 1999, for example, there was a drywall shortage, he said.

“That lasted several months. Eventually economies of scale were achieved as the industry self-adjusted.”

Information from: The Galveston County Daily News, http://www.galvnews.com





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