If you’re building a new home, or are a builder, this will come as no shock to you: It’s taking longer to get the job done, and it’s more expensive.
In fact, at a recent annual meeting, National Association of Home Builders economist Robert Dietz said this shortage was actually holding home construction growth back.
“The rate of unfilled jobs in the construction sector now is actually higher than it was in the building boom,” he said in a press conference during the event, adding that labor, lots and lending are the three drivers of industry health.
And the NAHB adds that its own analysis, combined with statistics from the Bureau of Labor Statistics, shows that there were 214,000 open construction sector jobs in July — the second highest monthly count of open, unfilled jobs since May 2007.
And December’s NAHB/Wells Fargo Housing Market Index survey revealed that 82 percent of those polled said the cost and availability of labor would be a challenge in 2017, up from 78 percent and 13 percent in 2016 and 2011, respectively.
“It’s affecting both the cost of housing and how quickly we’re able to complete some of these projects as well,” said Dallas Builders Association executive officer Phil Crone. “Builders are telling us it’s about $4,000 extra and two months added to the completion date.”
If the old adage is “many hands make the load light,” then the opposite is holding true for builders. Undermanned projects are taking longer to complete.
“If a contractor needs 12 guys on a framing crew, they’re lucky if the get four of them,” Crone said. “If they need six trim carpenters, maybe they get two to show up.”
“And if we don’t have the labor force to build all the new construction, just imagine how hard it is to find someone who just needs home maintenance,” said DBA president Michael Turner, who is a homebuilder in Dallas and a Dallas ISD parent.
The shortage became even more apparent after Mother Nature came to play. “That really rainy period at the end of 2015 pushed a lot of projects onto the same construction schedule,” Crone explained.
And if you go to almost anyone renovating or building a home, you’ll hear about contractors who are continually having to replace workers after they leave for a higher paying project.
“People are going to the highest bidder for work,” Crone said.
“If we keep increasing the cost of housing, employers may not be lured so much,” Crone said. “Companies like Toyota may look at the area and think, ‘the housing costs aren’t that much lower than what we already have, let’s stay by the beach or let’s stay by the mountains.’”
“I just don’t want us to lose our competitive advantage,” Crone added.
What Crone and Turner would like to see is a partnership with Dallas ISD to form a construction trades magnet school, with the builders and developer members of the DBA filling the same function as businesses who partner with Dallas ISD’s collegiate prep academies.
Crone said the desire and interest from their members is there. “At a dinner we had recently, it came up,” he said. “Bigger builders and developers were on board and asking for a partnership, especially with Dallas ISD.”
Turner said that the building community is ready for this partnership. “We have builders that are willing to mentor high school kids,” he said.
“This is probably my biggest initiative,” Turner, who talked about his background as part of his speech when he was installed as the association’s president this year, added.
“I was a vocational student in Arlington,” he said. “I tried to get into auto body and auto mechanic, but I ended up in building trades.”
“Lo and behold, it’s worked out pretty well over the years,” he said, laughing.
Turner said that he was impressed with Dallas ISD’s commitment to making students college ready or workforce ready by graduation. He just hopes the district can help respond to the need for skilled workers in a profession that, he said, pays quite well.
“This is one of the few industries where you can excel without a college degree,” he said. “My bricklayer doesn’t have a college degree, and he has a 500-acre ranch outside of Grand Prairie!”
“Anybody in the industry, they feel our pain,” Turner said. “We’re building more complicated houses with a less educated workforce.”
“And the thing is, our potential workforce is there — we just need to make them aware that these jobs exist, and that the training is out there,” he added. “And they’re good paying jobs. They can make $15 an hour the day they graduate high school. For instance, the electrical trade — a typical wireman can make about $20 an hour, and a journeyman $35 an hour or more. And some licensed electricians can make up to $100 an hour.”
“We would love to partner with DISD because these kids could graduate almost ready to be licensed,” Turner explained. “They could get great paying summer jobs while they’re in high school.”
“And if they go to college later, they have a great job they can do in the summer to keep student debt down,” he added.
Turner said that he would love to see a program that teaches students the proper way to do these jobs because, with that knowledge, advancement is rapid.
“A lot of these kids, if we could offer this to them, they’re already on our job sites, working for their dads or uncles,” he said. “But they’re not necessarily learning how to do things right.
“If we can put them in school and they can learn how to take pride in their work and a job well done, then these are the guys that become foremen and crew leaders really quick.”
Turner said he’s ready to start working on a plan with Dallas ISD officials – not only because it would help his business, but because of the opportunities it would give Dallas ISD students.
“I worked my way up from tile setter to builder, I’ve had my own company for 12 years, and now I’m the president of the Dallas Builders Association,” Turner said. “With this industry, it really is the sky’s the limit.”