MEMBERS’ VOICE
How Is the Downturn in the Economy Affecting You?

by Russell Boniface
Associate Editor

Summary: AIArchitect asked five members how the downturn in the economy is affecting them and their firms, and what they are doing about it. We received five different responses, and they all had a lot to say.

Richard Becker, AIA
Principal, Becker Architects Ltd., Chicago
If you had asked me a few months ago, my answer would have been different. 2007 was a very difficult year. We're a small firm and had to lay off an architect who had been with us for many years, and that was painful for both her and myself, though I found her a job that started the following week. We also had ongoing collection issues. And it seemed like clients were harder to please than usual. They were kind of like the waiter who asks, "Is anything all right?"

2008 seems to be working out better. The collection issues have resolved (and not by writing off). The phone is ringing more, and people seem more upbeat. We've had several projects expand in scope. We have two major retail projects going forward. But I'm not sure we're out of the woods yet. We do a lot of residential work, and concern about declining housing prices is dampening enthusiasm for construction.

Bob Burke, AIA, NCARB
CEO, Burke, Hogue & Mills Architects, Orlando
Central Florida is feeling the recession, and it’s no longer just about the residential market collapse. Our firm has an abundance of project opportunities in both the private and public sectors, but competition is fiercer and it takes much longer for projects to leave the starting gate than ever before. As a result, we are taking great care of our existing clients, and all firm principals are taking a more proactive marketing role and are retooling specific marketing plans for each of our areas of practice.

Diane Georgopulos, FAIA
MassHousing (Massachusetts Housing Finance Agency), Boston
I’m an architect at MassHousing, a quasi-public agency with authority to lend money to private developers for affordable single-family and multifamily development. The downturn in the economy has a double edge. Declining house prices can qualify more low-income families for owning their own homes, presuming affordable financing is available to them. On the other hand, for architecture offices, the economic slowdown caused by tightened credit will mean only those projects that must be done will be done. In general, firms that have cultivated relationships with institutional clients may fare better in this environment because owners who own properties or manage portfolios for the long term will not postpone necessary maintenance and operational upgrades that increase energy efficiency and overall building performance.

Shaun Roth, AIA
Kari Kimura, AIA, LEED-AP
Partners, Roth Kimura, LLP, Holualoa, Hawaii
We are hearing second-hand reports of construction companies laying off workers on the Big Island. We saw this coming 18 months ago and decided then not to expand our business. Last year, at the county council level, numerous initiatives were proposed that were essentially back-door building moratoriums. Instead of a gentle landing and a correction to the market, it seemed as though our politicians were determined to crash the local building economy.

We actually would welcome a soft adjustment to the building boom. In the past few years, with material and labor costs escalating at such an unpredictable rate, the general contractors that serve our clients were having great difficulty in coming up with accurate construction budgets. It seems as though when construction is red hot, in addition to costs going up, building can suffer in the sense that personnel get stretched too thin, inexperienced workers are assigned to jobs beyond their abilities, and there’s just an overall lessening of attention to projects.

We run our business with low overhead costs. We do the jobs of architect, office manager, bookkeeper, computer, and janitor. We don't advertise, or even have a Web site for marketing. However, we are very active in our community. We always have a pro bono job in the office and have served as directors for local nonprofits. As for jobs, we've been fortunate to have repeat clients and client referrals come our way.

Larry Smith, AIA
President, AIA Nebraska
Avant Architects, Inc., Omaha
The Midwest, and Omaha in particular, seems to avoid the major highs and lows experienced in other markets. We have a slowdown in the residential market. The focus of my firm is in commercial and health-care markets, and we are as busy as we have ever been. Most firms in our area are busy as well. I have received three letters from peer firms in the past month inquiring if I know of any architects looking for work! A big challenge is managing project budgets with rapidly changing steel and construction materials.