Housing supply

Labor shortage continues to weaken housing supply and affordability

A severe shortage of construction workers continues to weaken housing supply and affordability, according to a new report from the Home Builders Institute. The construction industry can significantly alleviate the problem by working closely with unions to train and place thousands more in the skilled trades, says HBI CEO Ed Brady.

“The lack of skilled construction labor is a major challenge for homebuilders across the country as they struggle to expand their housing stock and improve affordability,” Brady says.

“More training means more pre-apprentice talent placed on job sites. More and better trained workers will mean greater productivity, Brady said. “Greater productivity will mean not only an increase in the supply of housing, but also an increase in the ability of homebuilders to pay workers more, as national competition for almost all categories of labor continues. to be rough.”

To attract more people into the trades, Brady calls for closer cooperation between the construction industry and construction unions.

“We are in a new era of need and opportunity that requires serious collaboration,” he said. “The construction industry, workers, and the public and non-profit sectors must work together to create well-paying jobs for a new generation of skilled construction workers.”

The Spring 2022 HBI Construction Labor Market Report indicates that the estimated worker growth required for the construction sector is approximately 740,000 per year. Meanwhile, demand for construction workers remains strong, with 103,000 net residential construction jobs added over the past 12 months and a recent monthly average of nearly 12,000 additions, the report said.

The report is compiled for HBI by the Economics Department of the National Association of Home Builders. Its analysis continues to show that the construction industry needs an additional 2.2 million new hires from 2022 to 2024 to meet demand. “It’s a crisis-level skilled labor shortage,” Brady says.

The need to improve housing affordability by reducing the supply gap has captured the spotlight in recent days. The Biden administration last month announced a plan to reduce housing costs and boost housing supply over the next five years.

“Boosting housing supply requires training and placing thousands more skilled workers in well-paying jobs,” Brady said. “This is urgently needed as many of those working in the trades have aged or left the sector permanently for other opportunities.

“We need to capture the imaginations of more middle and high school students planning for their future. We need to create a more diverse and inclusive construction workforce. And we need to find ways that the construction industry and construction unions and unions work together to provide a strong pipeline of trade professionals,” says Brady.

“As a nation, we need to train the next generation of skilled tradespeople. This means recruiting more women. This means training and placing minority, low-income and opportunity youth for high-paying jobs as an important way to fight against social inequalities,” he says. “That means providing job skills training to veterans and transitioning military members. And that means reaching out to high school students, and those who influence their decisions, to change their perception of careers in the trades. »

Brady says these things can be achieved by expanding job skills education in high schools and community colleges, as well as industry-sponsored community facilities and programs. “The valuable skills learned in the training programs help graduates receive the dignity, respect, pay and benefits they deserve. In turn, training increases productivity, which enables employers to meet the compensation demands imposed by today’s competitive job market,” says Brady.

The NAHB now forecasts an economic slowdown for 2023. But the long-term housing deficit is likely to persist through any cyclical, interest rate-driven downturn, according to NAHB chief economist Robert Dietz. “This research shows us that this housing and skilled labor shortage crisis is not going away,” Dietz says.