Phil Crone: My Two Housing Holiday Wishes — More Labor, Less Regulation
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by Phil Crone, Executive Officer, Dallas Builder’s Association
What a year it has been! Homes are where the jobs sleep at night, and we have had added plenty of both in 2016. More than 113,000 jobs and nearly 30,000 homes lead most housing economists to rank Dallas-Fort Worth as the nation’s top housing market, snatching that title from Houston in the middle of this (almost past) year.
So with the good times rolling here more than anywhere else, what more could we ask for? Don’t get me wrong, I would gladly take these two issues over the problems we had eight years ago. They are correctable if we take ownership of them. We need to own them or else we are in serious danger of losing the affordability advantages that have been a major factor for our prosperity.
That leads me to my first wish for the Dallas housing market, that we address our labor shortage.
Any builder around here would rather see more workers on their job site than presents in their stocking. We have a severe labor shortage that is adding more than $4,000 to the cost of every home and nearly two months in delays. Our members cite shortages in unskilled labor such as roofers and framers. However, skilled labor is dwindling as well and we need to fill a lost generation of carpenters (average age 49), plumbers (average age 56), HVAC technicians, electricians, etc.
Herein lies a great opportunity for Dallas ISD. My wish for educators is that we no longer perpetuate the fiction that success is directly tied to obtaining a four year degree. Many students unwilling or unable to attend college have great careers waiting for them in construction. Homes are getting more complicated to build, creating the need for strong vocational training. Recent legislation enables Texas schools to modify their curriculum to accommodate such programs. Getting them to actually do so involves a culture shift, the result of which will hopefully allow young adults when asked where they went after high school to proudly say, “I went to work.”
My second wish is that local government understands how their decisions impact housing affordability. More than 25 percent of the cost of a new home is directly attributable to regulation. Some of it is necessary, but much of it is not. Many city leaders around here firmly believe that homes need to cost a certain amount (usually over $400,000) in order to “pay for themselves” and to ensure that affluent citizens move there. They characterize new fees as a “cost of growth.” Many northern suburbs have instituted design standards that rival what you see in many HOAs. Dallas has a tree ordinance that levies fees for removing trees on a property owner’s land that exceed the cost they paid for the land. With 85 percent of the developable land in South Dallas, those areas are impacted disproportionately.
Buyers in the middle to upper echelons of the market can (and are) absorbing these regulatory costs, but first time homebuyers such as millennials, teachers, first responders, and working families are being denied an opportunity by forces beyond simple supply and demand. Even small fee increases have a big impact. According to the Texas A&M Real Estate Center, a $1,000 increase in the price of a new home means that 20,000 Texas families are no longer able to afford the American Dream of homeownership.
The continued Californication of North Texas in terms of “local control” of development has to change. We do not have the beaches and mountains that they do (although the BBQ is much better here), so we cannot lose the affordability advantage that put Dallas in its rightful place as the nation’s top housing market. Let’s drink a toast to a 2017 with more housing labor and far less government red tape!
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I was with you until the tree comment. “Mature trees” are a selling point in any realtor’s spiel whereas none list “Mature trees replaced with newly planted, Charlie Brown-like Christmas Tree.”
And those new trees are often “trash trees’ ill-suited with fast growth but short life span. Often planted in the wrong place, too!
It is unfathomable that one would write an article complaining about the “labor shortage” in the construction industry without even mentioning (much less discussing) the role that immigrant labor plays in the building of houses, and the consequences of restricting the migration of that labor into the U.S. Would comprehensive immigrant legal reform be easier, or wiser, than trying to achieve the cultural shift in attitudes that a re-emphasis on vocational training would require? I don’t know the answer, but I would think that this question should be explored in depth before we spend a whole lot of money attempting to accomplish something (acceptance of manual labor) that might actually be impossible to achieve in our society. Using our public schools to divert children from higher education just seems to be wrong on so many levels.
And as far as the “regulatory costs” go, should we get rid of all regulations that increase costs? That would be all regulation, I guess. No more zoning, no more building codes, no more minimum standards for subdivisions, no more historic preservation ordinances, no more tree ordinances, no more child labor laws, no more minimum wage laws, no more licensing of plumbers or electricians or contractors, no more licensing of real estate sales people–well, you get the point. Each of those “regulations” was put in place because a city council or a state legislature decided that it would benefit the public to regulate that subject. If a regulate could be improved, then go ahead and do it. But our cities work best when the public good is balanced against the private interest in a fair and responsible way, not when the public good is discarded because there is cost involved. There are always costs to living in society, and we will usually have different opinions about each of these issues–that is what our political system is set up to manage. If it doesn’t do a good job, the remedy is clear–vote the policy makes out (not overthrow the government).