Resurgent Housing Market Brings Labor Shortage into Focus for Homebuilders

Back Commentary May 26, 2017 By Rick Larkey

During the first four months of 2007, the Sacramento regional homebuilding industry sold 2,326 new homes. Five years later, and well into the Great Recession, that number had fallen dramatically to 842. But that was then and this is now. Through the first four months of 2017, our industry has completed an impressive 1,888 new home sales. Underscoring the uptick in the homebuilding industry’s economic fortunes, in March we sold more than 500 — 527 to be exact — homes in a single month for the first time in a decade.

While this growth is a welcome development and long overdue, more and more homebuilders are growing concerned that our industry simply does not have the workforce to keep up with the pace of consumer demand for new homes both now and in the years ahead. Consequently, a new issue for our industry is emerging: labor shortages.

The long and short of it is that the recession forced many of our industry’s members to consolidate, reorganize and, in many cases, completely shut down their business operations. Now for some data driven perspective. In 2005 the Employment Development Department reported that there were 73,400 people employed in construction jobs. By 2011, employment had dropped 50 percent to 36,900. Since 2011, construction jobs have increased to 49,800 — about 68 percent of the 2005 peak — but because people have found other employment, have retired or are working outside of the region, homebuilding trade contractors are experiencing significant skilled labor shortages.    

Last year, in response to this need, North State Building Industry Association’s Trade Builder Alliance Council and foundation hosted a series of meeting with builders and trade contractors to discuss and formulate a long-term workforce development and recruitment plan. This planning effort became the 5Kin5 Initiative, a regional jobs campaign with the express goal of bringing 5,000 new workers into the new homebuilding industry over the next five years. And in February, Sacramento Mayor Darrell Steinberg joined us as we formally launched this new program.

Already, we have partnered with Del Paso Homes, Elk Grove Unified School District, Greater Sacramento Urban League, Golden Sierra Job Training Agency, Lennar Homes, Los Rios Community College District Sacramento Unified School District and others. Thus far, our efforts have enabled us to the secure over $100,000 in sponsorship funds thanks to several local companies and foundations.

One example of how 5Kin5 is acting on multiple levels to solve the labor shortage is through its partnership with the Los Rios Community College District. NSBIF has partnered with Los Rios to help recruit new students to its construction programs, develop industry internship opportunities for its existing students and facilitate employment for its program graduates. Another example is the Golden Sierra Job Training Agency, which has partnered with the effort to place people on probation who have completed a construction training program into employment.

So, here is the bottom line: The greater Sacramento region is in the midst of a strong period of growth, but in order to keep up with this growth, we need to extol the virtues of working in our industry, which provides jobs with good wages, good benefits and a bright future. If our collective goal, as a region and as a community, is to sustain — and increase — this growth over the next several years, then we simply need more hands to do the work.

Editors note: Comstock’s welcomes different viewpoints on housing and all other matters. To pitch us on a commentary piece, email editorial@comstocksmag.com.

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