There’s a reason you can’t find a new home to buy: too few people to build it.
Construction companies in the Central Valley and much of California are sounding the alarm, saying they can’t find enough carpenters, concrete workers, roofers and drywall installers while the economy is booming and buyer demand is high.
The labor shortage is slowing production, driving up costs, frustrating some Valley buyers and prompting home builders to launch a desperate recruitment effort.
The problem, they contend, stems from the Great Recession.
The 2007 mortgage meltdown erased nearly half of the state’s home construction jobs and bankrupted dozens of companies. Trades workers scattered. When the economy finally rebounded, many stayed away.
“The more talented of those people said, ‘Screw this, I’m going to do something else, I need a job,’” said Mike Prandini, president of the Building Industry Association of Fresno/Madera Counties. “They retrained and are in new professions and they’re not coming back.”
But a state labor union leader said the building industry is to blame. Companies that pay union wages have enough workers, but those that hire at lower wages, including minimum wage, will continue to struggle, said Robbie Hunter of the State Building and Construction Trades Council of California.
“At a point, someone is better off working at a McDonald’s or the car wash,” Hunter said.
From a high, to a low
Data from the state Employment Development Department reflect a massive bust in the industry more than a decade ago. But also a slow return of workers to job sites in the past few years.
During the peak homebuilding year in 2006, the state counted 150,000 people actively working in home construction. That number fell to 77,000 in 2011, when housing construction plummeted across the state.
That number has risen slowly since then, recently topping 100,000 jobs in a hot real estate market. Some builders say the biggest problem is a lack of experienced and skilled workers.
Many of the most skilled workers were older and simply “aged out” in the years when little was being built - growing too old to deal with the rigors of climbing scaffolding, carrying loads of lumber and working on rooftops in the hot sun.
Kevin Sheley of Anthem United, the construction manager at Willow at Natomas, said his company manages the work to make sure it is done in a timely way and done well. Rows of half-million-dollar tract homes were going up last week at the Natomas site.
“Our schedules are impacted” by not having a consistent roster of skilled workers, he said. “I’d like to think our quality isn’t because we make the adjustments needed. It might take longer, more oversight.”
Loss of immigrant workers
The problem is exacerbated by a plunge in immigrant workers. Many home construction workers have been undocumented individuals, as well as immigrants here legally.
Many returned home during the recession and have not returned.
A report by the Pew Research Center showed that the number of Mexican immigrants living in the United States illegally declined by more than 1 million between 2007 – near the start of the recession – and 2014. And the number of arrests of people trying to cross the border illegally into the U.S. last year was the lowest it’s been since 1971, according to the U.S. Customs and Border Protection agency.
Dan Dunmoyer, chief executive of the California Building Industry Association, which represents new home builders, said he’d like to see some form of immigration reform that would bring some workers back legally.
“There is a hesitancy to cross the border even legally now,” he said. “To us, comprehensive immigration reform is good, because it will create a path for people to work here legally.
“Right now, there is a message heard across the border that we don’t want an international workforce.”
Some Central Valley builders say the labor shortage has been worse in the Valley than in the Bay Area, where more jobs are unionized with higher wages, and where builders can compensate for higher wages by selling homes at much higher prices than in the Valley.
“It is difficult to lure that job base to return. We just couldn’t offer a competitive wage,” said David Ragland, whose Anthem United company has been slowed by worker shortages at projects in Lathrop and the Sacramento region.
The shortage is not just a California issue. A National Association of Home Builders member survey released last week found that 90 percent are having trouble finding enough carpenters this year, 77 percent lack enough concrete workers and 69 percent are unable to hire enough roofers.
More than 80 percent of home builders surveyed this year nationally said they expected to raise home prices because of labor shortages. The slowdown also means some buyers are waiting half a year to get into their homes after they sign a deal. That’s left some buyers making repeated treks just to visit their under-construction homes and numerous calls to sales representatives for progress reports.
Rebranding the industry
Builders say they are struggling not only to build houses, but to rebuild and rebrand their industry as a viable career for young workers.
Rick Larkey, head of the North State Building Industry Foundation, said wages in the industry are on the rise, but so are wages in competing industries, including high tech.
State EDD data show the average wage in the construction industry in the Sacramento region earlier this year was $27.84 per hour. A quarter of jobs paid less than $19 an hour.
Some construction site jobs pay only the $11 minimum hourly wage, builders said. Another quarter of jobs, typically for experienced and higher-skilled workers, paid more than $34.
Industry representatives lament that high schools push more students toward college these days, and parents are less likely to suggest their children choose an occupation that suffered such a massive bust a decade ago.
“The pressure for a parent is still to have their kid get that four-year degree,” Larkey said. “We are trying to convince them we’re not condemning their kid to (economic deprivation) if he goes into the trades.”
But it’s not an easy sell, even to people who find the trades attractive.
Paul Felker, 18, a recent Whitney High School graduate, went to a job fair a few months ago and landed an apprentice position as a plumbing installer at new home sites in Placer County and the Sacramento area for $13 an hour. He’s gotten a raise to $14. He lives with his family, so he does not have to pay rent.
He hopes to go to tech school to gain a skill, but not necessarily for home construction. He said he’s heard Tesla, the electric car company, has jobs for welders.
“Most people don’t look to the trades as a career opportunity,” he said. “You don’t purposely go in that direction.”
Meanwhile, the state building industry has been working with high schools and community colleges to create modern training programs, Larkey said.
To cast a wider net, the industry group has begun working with agencies that help troubled youth. Building industry leaders have met recently with the head of the city of Sacramento’s violence prevention office and with county parole officers as part of a recruitment campaign.
Central Valley home builder Ragland of Anthem United suggested there’s pressure to attract and train workers and get them building homes faster now, before the current economic cycle subsides.
“I’m disappointed with the results so far,” he said. “I have not seen the situation get any better the last few years.”