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I have several theories as to why there is a labor shortage in the home building industry. First, zoning policy and anti-development sentiment around the country. If you follow development trends, state, city, and local municipalities are favoring multi-family development/townhome development or at the other extreme – the mini-mansion or basically one house per two-plus acres. The middle class is being completely ignored. The kind of house that I grew up in (house on a quarter acre lot) is no longer in favor. The middle class, as much as they were talked about in this last election, is being completely ignored. Furthermore, without this middle class product being constructed, upward and class mobility will also be stifled. You can’t talk about getting people out of the city into the suburbs if the product being built goes from $450,000/unit for a new townhouse to 1,300,000 for a new home. What happened to the middle? I bet you if you looked at home sales in desirable neighborhoods the homes prices between 300,000 and 700,000 are selling within days.
Second, the lack of trade schools. Now I was fortunate to go to college and eventually graduate school and law school and have done well, but not everyone is made for college and many are given false hope and saddled with unnecessary debt. Trade schools and tech schools must be built. Plumbers, electricians, and other tradesman are in huge demand.
Third, I know that builders are now sub-contracting work out such as framing, dry-wall, and sheet rock. These subs are working for multiple builders working off-hours. Who is supervising them? How good is their work? How can a subcontractor do a good job if they are installing dry-wall at 11 pm at night after working at two or three other job sites that day? Why would you have a staff and put them on salary if you can 1031 a crew that hops around from site to site and keeps your bottom line down?
Ernie Rafailides
Second, the lack of trade schools. Now I was fortunate to go to college and eventually graduate school and law school and have done well, but not everyone is made for college and many are given false hope and saddled with unnecessary debt. Trade schools and tech schools must be built. Plumbers, electricians, and other tradesman are in huge demand.
Third, I know that builders are now sub-contracting work out such as framing, dry-wall, and sheet rock. These subs are working for multiple builders working off-hours. Who is supervising them? How good is their work? How can a subcontractor do a good job if they are installing dry-wall at 11 pm at night after working at two or three other job sites that day? Why would you have a staff and put them on salary if you can 1031 a crew that hops around from site to site and keeps your bottom line down?
Ernie Rafailides
