By Phil Crone
A recent survey of Dallas Builders Association members indicates builders are managing the ongoing labor shortage, but affordability concerns are mounting. Faced with a shortage of more than 20,000 construction workers, DFW’s construction industry remains hard-pressed to find the workforce needed to keep up with demand.
Nearly 70 percent of builders surveyed by the Dallas BA claim the lack of sufficient labor is negatively impacting their business. The greatest number of respondents claimed the lack of labor is adding $3,000 to $5,000 to every home they build and, on average, about a month of delay.
These numbers are down slightly from the same survey taken about a year ago. That could be attributable to builders adapting to a shortage of labor as the “new normal.” Regardless, the problem continues to be significant but is stabilizing.
The same sentiment is shared nationally. A February survey by the National Association of Home Builders (NAHB) cited the cost and availability of labor as the top concern. However, fewer builders expect it to be a significant problem this year. Builders were more dubious about lot and regulatory costs, expecting them to increase and become a more significant concern in 2020 as compared to last year.
Dallas area builders are feeling the regulatory crunch as well. Local regulation now rates as just as large of a concern as the labor shortage. Despite a successful legislative session that saw state lawmakers reduce rollback taxes and empower homeowners to choose from all code-approved building materials, housing advocates continue to battle fee increases, protracted permitting, and efforts by established property owners to keep housing exclusive to desired income levels. Therefore, it is hardly surprising that “affordability in general” was, by far, the top concern for Dallas BA members.
Both the Dallas BA and NAHB surveys predate fears related to the spread of COVID-19 (aka Coronavirus Disease 2019). The housing industry will certainly feel the impact of the virus in the form of supply chain disruptions and corresponding cost increases as well as erosion in consumer confidence until the virus runs its course. It is too soon to determine the full extent of its impact.
Phil Crone is the executive officer of the Dallas Builders Association, the trade association and network of Dallas builders. Find out more about the DBA at dallasbuilders.com.