After the Floods, Will Builders Be Swamped?

June 19, 2008 — -- As floods continue to threaten the Midwest, builders in Iowa are bracing for another kind of deluge: work.

"Nearly every place that's damaged is going to have a fair amount of repair work that needs to be done -- taking out and replacing insulation and drywall, mechanical and electrical items, flooring ..." said Jason Drewelow of Primus Construction Inc. in Hiawatha, Iowa. "For a lot of places, it's going to be like having a complete remodel done."

Officials in Cedar Rapids, Iowa's second-largest city, have pledged that the city will rebuild, following the record flooding that last week caused more than $1 billion in damages and destroyed or damaged 1,300 square blocks of homes and businesses.

"We're one of the two primary economic centers of the state," Cedar Rapids City Manager Jim Prosser told ABC News. "We have to make sure that we're reinvesting to continue to provide vitality for the state and for the Midwest."

At first blush, the new demand for flood-related repair and remodeling work might seem like it would be welcome news to Iowa builders. The U.S. housing slump has been brutal on the nation's construction industry, and construction sectors in some states have been hemorrhaging jobs.

But both residential and commercial builders in the Cedar Rapids area say they've been left largely unscathed by the slump. They were busy before the floods and new flood-related business, some say, may prove to be a mixed blessing.

"It's going to put a huge stress on the new construction being built and new remodeling being done, because the subcontractors are going to be tied up with a lot of this flood work," said Wayne Winn, the owner of Hometown Restyling.

Winn said that before the floods, his Hiawatha-based company had already started hiring more workers to keep up with demand.

"We're still building a lot of new houses, we're still doing a lot of remodeling," he said

He and other builders said the Cedar Rapids housing market has thus far avoided the highs and lows plaguing other areas of the country.

"There's not a deflation of home prices like you see on the West Coast or the East Coast or the South. Building has been stable here," said Mike Flynn, president of Flynn Homes Inc. in Cedar Rapids. "I'm not saying it's gangbusters, but it's not in the dumps like it's been in other parts of the country."

Winn, who is also president of the Greater Cedar Rapids Area Homebuilders Association, worried that demand for flood-related work could slow down new construction planned or already under way in the area.

Cedar Rapids' many flooded basements means that everything from fuse boxes to furnaces will likely need to be replaced, and that, Winn said, could lead to a shortage of subcontractors, such as electricians and heating and ventilation specialists.

Some builders face an additional challenge: They'll need to spend extra money to pump water out of existing construction sites before they can resume building.

Dale Snyder, co-owner of Dean Snyder Construction, an industrial and commercial builder in Clear Lake, Iowa, said he can't charge his clients more for such work because construction contracts don't cover flooding.

"We're at the mercy of Mother Nature," he said.

Between the cost of drying out a work site and other construction delays associated with the flooding, Snyder estimated that his company could lose up to $150,000.

There is, however, at least one thing working in the builders' favor these days: It's the weather, ironically enough.

"We're fortunate the sun's shining," Winn said on Wednesday. "There's a nice breeze and the forecast looks good for the next seven days."

It'll be a good time, he said, to keep working.