Unveiling the Hidden Challenge in Housing
While the housing market grapples with various challenges such as supply chain issues and fluctuating lumber prices, there’s an underlying crisis that often goes unnoticed—the shortage of skilled tradespeople and workers in the construction industry. As we’ve highlighted over the past couple of years, this scarcity is now manifesting in the housing market, impeding efforts to increase housing supply and tackle homelessness. In the state of Oregon, the need for more workers takes center stage, with the headline declaring, “Workers Needed to Close Housing Gap.”
1. Beyond Lumber Prices: Understanding the Root Cause
Despite strides in overcoming supply chain disruptions and witnessing a decline in lumber prices, the housing shortage persists. A report from The Economist for the state of Oregon emphasizes that while factors like supply chain issues and lumber prices have seen improvements, the crux of the housing crisis lies in the shortage of construction workers. This underlines the critical role of skilled tradespeople and labor in the construction process.
2. The Economist’s Perspective: A Focus on Workforce Increase
Addressing the housing gap, The Economist proposed various solutions, including increasing land availability, turning land into buildable lots, and stabilizing development costs. However, the pivotal emphasis was on the need to bolster the construction workforce. The headline from the talk echoed a simple truth: “If we want to build more units, we have to have more workers.” This encapsulates the essence of the challenge faced by the industry.
3. The Reality for Developers and Contractors: Struggles in Recruitment
For developers, contractors, and construction companies, the struggle to fill roles has become a significant impediment. Despite the availability of materials, lumber, and land, having a skilled and reliable workforce to carry out construction tasks, including installation of mechanical systems, remains a persistent challenge. The shortage spans from basic hourly labor to skilled trades, with reports of companies offering competitive wages ranging from $30 to $70 per hour.
4. The Vanishing Workforce: A Persistent Issue
One aspect of the labor shortage is the transient nature of the workforce. Many workers show up for a day or two, only to disappear after receiving a couple of days’ pay. This further exacerbates the challenge for companies seeking reliable and committed employees.
5. The Magnitude of the Problem: Oregon’s Need for 13,000 Workers Annually
Quantifying the problem, the state of Oregon alone requires an additional 13,000 construction workers per year to bridge the housing gap. This stark figure highlights the severity of the situation, especially when considering the compounding effect over the next few years. With an increasing number of households seeking homeownership and more space, the demand for new homes is escalating, putting further strain on the labor force.
6. Tackling the Silent Crisis Head-On
As the construction labor shortage emerges as a silent crisis impacting the housing market, it’s crucial to recognize its significance. Efforts to address the housing gap, reduce costs, and increase inventory must include a strategic focus on bolstering the construction workforce. The chronic and persistent nature of the labor shortage demands innovative solutions and collaborative efforts from industry stakeholders, policymakers, and educational institutions to train and attract the skilled workforce needed to sustain and expand the construction industry.
Join the Conversation: Share Your Insights
If you’re a developer, contractor, or have insights into the construction industry, share your experiences and challenges in recruiting skilled workers. How has the labor shortage impacted your projects, and what innovative solutions do you envision to address this silent crisis? Join the conversation and contribute to the dialogue on the crucial intersection of the construction labor shortage and the housing market.