The lack of housing supply has multiple factors including the cost of borrowing and materials; but a shortage of labor is also a major factor in many areas.
In California, the Housing and Community Development Department has said that the sector needs improved productivity to tackle housing affordability. But a new study says there is a key barrier to this – a workforce shortage.
Smart Cities Prevail, a construction industry-focused non-profit, says that the residential construction industry in California must do more to attract the 200,000 workers it needs to meet the ambitious goal to improve affordability.
“The data shows residential construction work is more dangerous, economically risky, and lower paying than most other jobs in our economy,” said study author Scott Littlehale. “When you consider these dynamics alongside the industry’s aging workforce, its failure to institutionalize investments in apprenticeship training, and a shrinking supply of young workers and immigrants, it is clear why the housing sector is struggling to attract the new workers it needs.”
Littlehale found residential construction workers earn 24% less per year than all other jobs on average, and less than half have health insurance coverage through their employer. This is exacerbated by a typically longer commute.
He added the focus has been on regulatory reforms to accelerate construction but he says little will change the overall productivity of residential building unless the shrinking labor pool is addressed.
“Ultimately, housing builders’ reservoir of low-wage, less-skilled labor is not refilling itself,” Littlehale concluded. “The industry should consider labor-management cooperation measures like prevailing wage and collective bargaining agreements because they are consistently associated with higher wages, increased apprenticeship enrollment, more production efficiency, and fewer workplace safety problems. By improving labor market competitiveness, wider utilization of these workforce development arrangements would help restore California residential building to the production engine it once was.”
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