Another problem for fire victims — shortage of construction workers

Hundreds of families displaced by Northern California’s fires could face another challenge to rebuilding their homes — a persistent shortage of construction workers.

California lost nearly 20 percent of its construction work force between 2005 and 2016, according to a study released this week by Buildzoom, a web site that connects property owners and contractors. And more than 40 percent of construction job postings in the state remain unfilled for at least six weeks, according to the study, the third longest wait in the nation.

 

Families rebuilding after last year’s devastating Wine Country wildfires have felt the pain.

“There’s still a pretty big shortage of skilled labor,” said Alex Stewart, a client advocate at Buildzoom who is working with homeowners in Napa and Sonoma counties. “It’s a pretty classic supply and demand.”

The high demand for workers has resulted in rising prices and delays, despite an influx of general contractors from the Bay Area and beyond. Analysts believe the destruction of the latest round of wildfires will put even more pressure on a strained  construction industry.

The Carr fire has claimed more than 1,000 homes, while the ongoing Mendocino Complex fire has taken dozens more, according to Cal Fire. The Wine Country fires in October destroyed nearly 9,000 structures, including thousands of houses and other residences.

The series of fires have claimed two dozen lives, including firefighters.

The Bay Area already lags far behind its need for new homes. A study by the Silicon Valley Leadership Group estimated the region created six times more jobs than homes between 2010 and 2015.

 

That’s a heavy demand for a shrinking labor force, experts say. Issi Romem, chiefeconomist at Buildzoom, said expensive regions like Northern California have had the most difficult time keeping workers. Even though wages have increased since the 2008 housing mortgage crisis, housing prices have grown even faster. Only New Jersey and Massachusetts have longer waits to fill construction jobs.

Young workers, in particular, are not choosing a career in construction, he said. California has seen its share of construction workers under the age of 25 decrease by about 45 percent between 2005 and 2016, Romem found.

“It’s hard, physical work,”  hesaid. “People are more inclined to go after a college degree and white collar jobs.”

After the Wine Country fires, many residents have struggled through the emotional and complex decision to move or rebuild in a fire-prone community.

Housing prices near the ravaged communities rose, continuing a trend in the strong Santa Rosa real estate market, said Skylar Olsen, senior economist at Zillow.

One bright spot, Zillow researches found — more homeowners listed rental properties in the weeks following the crisis. Many were pricier, vacation rentals, but the new listings helped increase the ravaged housing stock for families who lost their homes.

Guy Kopperud, principal of industry solutions for CoreLogic, said the rebuilding is further hampered by California’s complex and strict housing code. He noted that after natural disasters in Texas and Florida, state officials streamlined the permitting process to allow faster reconstruction.

In Houston, the construction industry was bolstered after Hurricane Harvey by service industry workers leaving jobs to work in higher-paying construction jobs, he said. That has not happened in California, he said.

Even the influx of workers from the Bay Area and other parts of the state has not kept up with demand, housing officials say.

Kopperund cited an example of three homes with similar re-construction projects in an upscale Santa Rosa community. A single contractor agreed to the first job at $850,000. The contractor agreed to do the next two construction projects for $1.3 million and $2.5 million, he said.

“It’s really driven up costs across the board,” he said.

 

Stewart of Buildzoom has worked with about 40 homeowners this year on reconstruction projects in Napa and Sonoma counties.

 

He believes the increased need for workers will drain construction workers from Bay Area developments. Contractors have already relocated from as far away as Bakersfield to get a share of the steady work caused by last year’s Wine Country fires.

Trade workers in concrete, framing and fire suppression systems have been highly sought after, he said. “A lot of general contractors have come from surrounding counties,” Stewart said, yet demand remains “extremely high.”

 

 

 

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