Here's why "can't not" is the lead for homebuilding, construction, and real estate's supply and capacity crisis right now.

• By now, the lead of construction's supply shock story is not how messy, costly, unpredictable, vulnerable, and everything else a true supply chain should not be.
• Also, by now, the lead of this narrative dilemma is not how conditions, circumstances, and challenges are more than likely going to worsen before they show signs of improvement.
• Further, by now, the story's lead that building-sector-wide determinism, which accounts for broken, chaotic, massively frustrating, and expensive business conditions as they are today, is clearly working overtime to ensure that at some time or other in the near or mid-term future, history will repeat. Dysfunction will reign. Blame will once again be plentiful and go around as it is doing right now.

Or, the lead of the story on construction's enormous existential challenge, which boils down to this ludicrous current state of things, is about how the messy real-world behavior and decisions of people will make things better, worse, or perpetually challenged in the future:

People need, want, desire, and aspire to having new, remodeled, and renovated homes and we, the industry community who are in business to offer that solution, cannot meet that need.

Now, remember, the broad context here – for building, for industry, for the economy – is one that begs forgiveness for the fact that natural balances of pull and push, demand and supply, need and solution, are out of whack. Owing to the magnitude of risk when COVID-19 declared itself late last winter, those natural balances vaporized.

The force of money into circulation as a strategy to avoid, delay, and, ultimately, wean away from incalculable disaster performed as hoped, but came with cost consequences, some of which were unknown and some unintended.

Where that leaves building – which when it comes down to it, has been thoroughly unmasked as a heaving expanse of supply pockets, and supply circuitry, and supply trial-and-error gambits, rather than a supply chain – is stuck in a limbo we'll call "can't not."

"Can't not," right now means that at each node of construction's global complex of material resources flow, a programmatic chain-reaction now occurs as a reflexive, impulsive response to the upset balances of supply and demand.

Predictably, inevitably, and potentially harmfully, this sequence of pull reflexes gains momentum, takes on a life of its own, and becomes contagion, a phenomenon that has plagued real estate and construction economies for as long as memory itself.

The symptom, so well articulated in a quote in today's Wall Street Journal account, Despite Lumber Boom, Few New Sawmills Coming, by Ryan Dezember, shows up in a quotation from Melville, N.Y.-based Sherwood Lumber family-member executive Michael Goodman. Dezember writes:

The Melville, N.Y., company annually sells about a billion board feet of framing lumber to truss manufacturers, building-supply companies and shipping-crate makers. The firm doesn’t expect additional supplies before late next year or even 2023 and has been trying to manage its risk in the white-knuckle market by taking positions in the futures market.

“This is our job,” Mr. Goodman said. “We’re a middleman. We can’t not have stuff on the shelf.”

There, you see it. That's the lead here, "can't not."

"Can't not" is entirely valid and understandable at the Sherwood Lumber firm level, as it is so at the firm level for every part of the sprawling, heaving complex system referred to as building's supply chain. A look at Dezember's quarterly net income for five leading lumber producers is a $2-billion bar-chart use-case for "can't not."

And hearing from up and down the channel's countless points of hand-off, from sub-materials, to bill of materials, to assemblages, to deliverable structures and systems, the Q2 dilemma for every node of cost-and-value in the chain centers on this "can't not" knot.

You'd imagine that if ever there were going to be a time to untie that knot, commit and invest in solving for chronic dysfunction, and securing a nimble, responsive, and evolving value chain, it would be a time like now.

Now, when demand is hot and supply is constrained – or rather, crippled – might be the better time to tackle this challenge, to address the "can't not" bind, and to discover and shape a future that maps to a digital thread versus a chaotic crush of materials through clogged and wonky channels to building sites.

In all its naked essence, housing's leaders face this challenge, whether they want to think of it this way or not.

The challenge is whether there's an out from "can't not," and residential construction's business thought and practice leaders have an opportunity to lead to another strategic option – proactive and integrated – as an alternative to exogenous forces at play here.

"Can't not" means that at every point in the process of sourcing goods, services, and other vital resources to deliver homes, escalators are at work – to secure profit today when loss is expected, to mitigate unbudgeted expenses, and to strike while the irons are hot in a competitive arena that presumes only winners and losers.

This fray determines the vicious-circle, self-fulfilled prophecy of a bust cycle ahead. Why? Because prices ultimately de-couple from reality, and become unsustainable, and ultimately lead to a deflationary correction.

There's still a lot of pressure under every moving part of homebuilding's input cost structure right now, and the "can't not" reflex will be to pass those volatile, escalating expenses over to consumer buyers until tolerance points can not withstand the increases.

So, just when homebuilders might be enjoying a halcyon moment of providing sanctuary and solutions by the hundreds of thousands to new buyers, they're instead creating a cohort of frustrated, resentful, embittered buyers.

That's the endgame of "can't not."

Or, there's behavior now to determine that "less is more" production, team-member, partner-relations, and customer care focus will be the kind of commitment and investment necessary to get out of the vicious circle.

Training, education, management goals, technology and data insight, and ultimately, leadership are the barriers to entry into an era that would transform supply chain brittleness, rigidity, and vulnerability to collapse into a digital thread-style value chain.

Then "can't not" becomes, simply, "can." That's the lead.

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