Recently, we sat with a city council discussing something that will never appear on a set of construction drawings, yet could be the most important factor in the success of their project:
Time.
The council faced the familiar challenge of budget pressure. Difficult tradeoffs between moving forward, delaying, or adjusting the project’s scope. The need to make responsible, thoughtful decisions on behalf of their community was at the forefront. But as the conversation unfolded, we realized one piece of the puzzle that is often significantly underestimated: construction escalation and how dramatically it reshapes the economics of bond-funded projects.
A Slow Crisis that Compounds Quickly
Right now, we’re experiencing a 6% annual construction cost escalation, or roughly 0.5% per month. On its own, that doesn’t sound significant, but compounded over time, it fundamentally reshapes a project’s trajectory.
A $20 million project doesn’t stay a $20 million project for long.
When decisions stretch out over months, or worse, years, the gap between what voters approved and what the project ultimately costs widens rapidly. This gap creates a cascade of problems: design scope may need to shrink, mechanical systems get value-engineered, timelines slip, and escalation continues to creep forward.
“When construction escalation outpaces inflation, reasonable becomes difficult to achieve, as the numbers don’t align with what people are experiencing in their day-to-day lives.”
Ian Gelbrich, FFA Partner
The Perception Problem
Here’s where the problem gets bigger: the disconnect between what voters experience and what projects actually cost.
Over the past decade, the Consumer Price Index has increased roughly 37%. Over the same period, building costs in the Pacific Northwest have increased by 57%, according to Engineering News-Record (ENR) data. That’s nearly double.
This gap creates a psychological disconnect. Projects feel like they’re getting more expensive than they “should,” even when they’re simply keeping pace with market realities. And that disconnect shows up most visibly during a bond campaign, when a city needs voters to say yes.
In almost every community, there are people who enthusiastically support public investment in libraries, parks, fire stations, and schools. And then there are people who oppose it outright. But elections are decided in the middle by persuadable voters who need to be convinced that the need is real and the cost is reasonable.
When construction escalation significantly outpaces inflation, that “reasonable” bar becomes difficult to clear.
The Very Real Cost of Waiting
The challenge only compounds when a bond fails. Here’s what might happen: the city responds by trying to reduce the bond amount, hoping for a better reception at the polls. But getting back on the ballot takes time, often a year or more, and during that delay, escalation continues.
The result is a different reality.
A smaller bond will deliver less
In most cases, it will deliver significantly less. A reduced scope plus delay means the same amount of money now buys a smaller, less fully realized version, or forces yet another cycle of cuts and delays.
This is why the conversation about time isn’t just a project management issue; it’s about staying aligned on what the community needs, what it’s willing to pay for, and what it actually gets. In today’s environment, delay isn’t neutral.
“In today’s environment, delay isn’t neutral. Time has become part of the project’s cost structure.”
How FFA Helps Navigate These Decisions
We work closely with public agencies to navigate these realities. We listen to stakeholders—council members, staff, community members, and taxpayers—to understand what trade-offs matter most. We design buildings that deliver long-term community benefit. And we’re transparent about how scheduling and phasing decisions directly impact what a community can afford to build.
The projects we’re most proud of are the ones where decision-making was collaborative, hard choices were made transparently, and schedule and cost decisions were aligned with the community’s actual priorities. This only happens when everyone involved – the city, the architect, and the community – understands the math.
When you understand that waiting another year means your dollar buys less building, it may change how taxpayers make choices today.
If you’re a city or public agency in need of a capital project, this conversation matters now. Understanding how construction escalation affects your project’s timeline and budget, and how stakeholder alignment accelerates decision-making, can mean the difference between delivering what your community needs and compromising on scope.
We’re here to partner with you throughout the process, bringing transparency about trade-offs and collaborative expertise to help your council and community make the best choice.
