Northern California wildfires putting even more stress on already-short construction labor supply

A construction worker shortage could cause delays and increase costs for hundreds of families displaced by Northern California’s wildfires, according to published reports.

Buildzoom reported recently that the state has lost nearly 20 per cent of its construction workforce in the decade between 2005 and 2016.  More than 40 percent of construction jobs remain unfilled for at least six weeks, the third longest wait in the nation, the study reports.

“There’s still a pretty big shortage of skilled labor,” the Mercury News quotes Buildzoom client advocate Alex Stewart as saying. “It’s a pretty classic supply and demand.”

The worker shortage has resulted in rising prices and delays, despite an influx of general contractors from the Bay Area and beyond, the newspaper reported.

Overall, wildfires in the past year have destroyed approximately 10,000 structures. These include the recent Carr fire claiming more than 1,000 homes, while the Wine County fires last October destroyed nearly 9,000 structures, according to Cal Fire.

Buildzoom chief economist Issi Romem said expensive regions including 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 construction careers, 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 said.

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

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

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.

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