All over the U.S., blocks, streets and entire subdivisions of homes are sitting half-finished because their builders ran out of money or went bankrupt. In 25 (mostly coastal) metro areas surveyed by research firm Hanley Wood Market Intelligence, 52,295 housing units are completed and sitting empty, with 6,097 of those located in projects where work has been halted or canceled.
For engineer and construction expert David Carlysle, business is booming. He is often called on to evaluate half-built construction: Banks want to know if projects they've inherited through foreclosure can be salvaged. Builders need help calculating the cost of completing a job. City inspectors often won't issue a building permit to restart a stalled job without an expert assessment of damage.
"Most of the time what we have seen is the builder ultimately goes bankrupt and the bank winds up looking for someone to finish it for them," says Carlysle, president of the National Academy of Building Inspection Engineers and owner of Criterium-Carlysle Engineers, in Birmingham, Ala. Banks either hire a builder to complete the job or try to sell an unfinished project to a builder who will complete the homes and put them on the market. But as demand for new homes has dried up, so have bank loans that would enable a new builder to step in and complete the job. And these abandoned homes can sit empty month after month after month.
Exposure to the elements is a big risk, but not the only worry. Builders under financial pressure sometimes cut corners before finally walking away, Carlysle says. He tells of a 3,500-square-foot home — "the kind of house that would wow a buyer" — that was nearly finished when the original builder went bankrupt. Tipped off by a sagging wall, Carlysle found that crucial support beams were missing in several places. The original builder hid the shoddy work behind finished walls, skipping a city inspection that would have exposed the negligence.
There are some great deals on new homes today. But before you inadvertently buy trouble, here's what you need to know about the potential costs and safety concerns of interrupted construction.
3 vulnerable stages
Homes are erected in a sequence involving three main stages. A break in the sequence invites trouble. Whether problems result, and how severe they become, hinges on three questions:
- At what stage was construction abandoned?
- How long was the project left unfinished?
- How much wind, rain, temperature change and ultraviolet light was it exposed to? All these can damage or even destroy an unprotected building over time.
Stage 1: Roughed in
When a house is "roughed in," the site is graded, the foundation built and the framing (usually wood) is erected. Some or all of the sheathing — boards of plywood or manufactured wood — may be installed as the subfloor and roof underlayment.
Exposure limit: Roughly two months from the start of construction.
Risks: If abandoned for even a few months at this stage, especially in high humidity or continuing wetness, a house can become seriously damaged. The longer the exposure, the worse the risk:
- Manufactured wood products, made of glue and wood fiber, can swell and lose strength in moisture. "They can actually turn to kind of mush if they get too wet too often," says Claudette Reichel, an expert on housing and building materials at the Louisiana State University Agricultural Center. The warranties and manufacturer recommendations vary on different products, but generally two months — roughly the time it takes to get a house ready to enclose — is their exposure limit, Carlysle says. Oriented strand board (OSB) used in floors, roofs and walls, can grow mold in a week or less under the right conditions, causing ugly stains and a health hazard. Plywood — thin, laminated sheets of wood pressed together with glue — will separate and warp. (Warped wood is unsightly but structurally sound.) "It's basically rated for exposure during the construction period and that's all," Carlysle says. "If it sits on the site for a month or so before the building gets started, then that clock is running."
- Framing studs are less vulnerable because they're made of solid lumber and are narrow and vertical. But if water is trapped on the surface, even solid lumber can rot in a few months, Reichel says.
- Foundations are likely to settle, buckle or crack after a heavy rain if gutters aren't installed yet or if the soil hasn’t been graded to direct runoff away from the house. Failing foundations cause uneven floors, ill-fitting doors and wall cracks.
- If left uncovered, synthetic roof weather-barrier products, called "felting," break down after several months' exposure to sun, wind and storms, reducing their effectiveness.
- Even nails eventually corrode. Dan Grisa, a contractor in Riverside County, Calif., who rehabs half-built homes for banks and investors, says he's seen nails rust right inside the wood framing of a half-built home.
Stage 2: Dried in
A house is considered "dried in" when it is protected but not tightly sealed. At this point, the roof is finished and sealed with flashings to weatherproof joints and seams; wall cavities are filled with insulation; and the outside is covered in moistureproof house wrap. Inside, plumbing, wiring, ductwork and subfloor panels are installed. Floors and walls are defined and supported with panels of plywood or manufactured wood sheathing. Windows and doors may or may not yet be installed.
Exposure limit: Roughly four months after work has stopped
Risks: Moisture is the biggest risk at this stage:
- Plywood or manufactured wood flooring or roof sheathing can mold or rot. "I've been involved in some projects where the house was not well dried in, so that water was able to penetrate in and sit on the subfloor," Carlysle says.
- House wrap grows brittle and loses protection after several months of exposure to sunlight, wind or driving rain. Synthetics, used in house wrap, roofing felt and flashings (tape used to seal joints and seams) can hold out four to five months at most before they must be enclosed under siding or roofing, says Bijan Mansouri, technical applications manager for Fiberweb, maker of Typar house wrap and other membranes. After that, synthetics lose the ability to repel and transmit moisture. "The longer a product is exposed to sunlight, the more it basically breaks it down," Mansouri says. Wind-driven rain and freezing and thawing also drive moisture through synthetics and into the house, inviting mold and decay.
- Moisture can enter wall cavities. If dampness is sealed into walls, it can ruin insulation and encourage mold and rot. "I have seen that in homes where the house wrap and finishing was not properly applied and water gets into the areas under the eaves," Carlysle says. "We've opened those areas and found essentially black mush in there."
