Real Estate News

Sacramento new home construction slowed by worker shortages

Construction workers put on trim on a townhouse at The Mill at Broadway on Wednesday. Construction superintendent Gregg Uttecht said he is feeling the pressure of falling behind on the development because of a lack of workers. “These are big buildings, and to get them (built) in the time frame the owners want, I’d need six electricians, and the most I have is two,” Uttecht said.
Construction workers put on trim on a townhouse at The Mill at Broadway on Wednesday. Construction superintendent Gregg Uttecht said he is feeling the pressure of falling behind on the development because of a lack of workers. “These are big buildings, and to get them (built) in the time frame the owners want, I’d need six electricians, and the most I have is two,” Uttecht said. apayne@sacbee.com

The economy has improved, and demand for new homes is on the rise, but Sacramento home builders are sounding a new alarm: They can’t find enough construction workers.

In Davis, partly built houses are sitting idle for days at The Cannery subdivision because there aren’t enough workers to deliver materials. In Roseville, builder Meritage Homes reports that houses are taking months longer to finish because contractors don’t have enough stucco workers, drywall crews, painters and other tradespeople.

And in Sacramento’s central city, construction superintendent Gregg Uttecht says he is feeling the pressure of falling behind schedule at The Mill on Broadway, a residential community, for lack of workers.

“These are big buildings, and to get them (built) in the time frame the owners want, I’d need six electricians, and the most I have is two,” Uttecht said, standing in the dirt next to a cluster of four-story model townhomes under construction.

Seven years after a major nationwide recession brought new home construction to a halt, Sacramento’s construction engine is revving up again. Housing starts are up, and construction jobs overall, including residential, industrial and commercial, have grown from 36,900 in 2011 to 45,500 last year (though still down from a pre-recession peak of 73,400).

But the massive industry shutdown seven years ago that sent workers scattering is having a residual effect. Builders are having a hard time bringing those workers back. They cite several reasons: Many of those laid-off workers retired during the recession or “aged out” of the more physically demanding trades. Some took up other jobs and are reluctant to re-enter the industry, fearful the bottom might fall out again. Still others are commuting to work in the Bay Area, where the home-construction market is hotter.

Other regions of the country face similar shortages, but the labor shortage in Sacramento and some other Northern California areas is more pronounced, said Barry Grant of Meritage Homes, partly because workers are attracted to those higher-paying Bay Area jobs.

Industry officials say housing construction also has become more complex in the intervening years, given new energy efficiency requirements, stricter environmental standards and construction technologies. That requires more training and new skills, making it harder for inexperienced workers to jump right into trades jobs.

For now, the labor shortage appears modest, causing slightly fewer houses to be built per month, at slightly higher cost. Builders are holding back as well, still testing the waters by building only small clusters of homes in former high-growth areas like North Natomas to see just how firm the market is. But if the number of new home shoppers continues to grow, industry officials say workforce issues could seriously impede their efforts to meet market demand.

“We’re feeling the strain,” said Michael Strech, president of the North State Building Industry Association. “What happens in 2016? We need to tap into a whole new set of workers.”

Strech said the industry has been ramping up training programs and increasing its outreach to vocational schools, high schools and colleges, delivering the message that young people can find worthwhile careers in construction.

The question, Strech and others say, is whether the industry can entice a new generation of young workers to become plasterers, painters, plumbers and concrete pourers. New home construction typically relies on nonunion labor at lower pay scales than larger and more complicated commercial and industrial projects.

Wages for nonunion jobs at residential construction sites in Sacramento range widely, from $12 an hour for basic labor, such as fence building, to nearly $60 for highly skilled jobs, such as electrical engineering.

North State Building Industry Association Foundation director Rick Larkey lamented that industry jobs are no longer considered solid or upscale enough for some, despite a recession that has left many still searching for work.

“Everybody wants their kid to be an architect and engineer, and no one wants them to be a plumber and an electrician,” Larkey said. “But there is a lot of meaning that is derived out of building things. Working at a blue-collar job is not as bad as portrayed.”

Larkey said the outreach includes an effort to persuade migrant farmworkers to switch to construction jobs. Before the recession, industry officials said, Mexican immigrants – some legal, some undocumented – often worked in demanding trades such as roofing and drywall and were valued for their work ethic.

Larkey and others in the industry said they do not know what percentage of construction workers, pre-recession, were from Mexico, or how many returned there when job sites closed down. Employers say they do not expect many to return the long distance to Sacramento, at least for now, given uncertainty about how strong the housing rebound will be, as well as uncertainty over where the country is going on immigration policy.

Doyle Headrick, who owns Production Framing, a carpentry contractor, said he believes trades workers will come back over time as the market stabilizes and strengthens. Some workers who are commuting to the Bay Area eventually will tire of that trek and take jobs locally, he said. Until then, companies will have to adjust their expectations and their production schedules.

“It is going to take patience,” Headrick said. “Consistent work, that is what will bring them back. It is going to take time.”

Uttecht, the construction superintendent at The Mill at Broadway site, is among those happy to have a job, even if his crew isn’t half the size he wishes it were. He was laid off during the recession after 20 years in the trades. He retrained in office management and worked for his wife, but kept his résumé circulating. Now, at age 57, he said he is pleased to be back in construction and hoping the comeback will continue.

“I’m pretty confident,” he said. “But I was confident in 2000, too. You never know.”

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