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Homebuilders Labor Shortage – Amos Weighs In

Posted on Apr | 2017

George H. Amos III

George H. Amos III President and CEO

Hank Amos, President and CEO of Tucson Realty & Trust Co, weighs in on Homebuilders Labor shortage in a story on Arizona Public Media

Homebuilders Worry Labor Shortage May Slow Construction

Low inventory on the resale market causing high demand for new homes, homebuilders work to meet demand.

by Zachary Ziegler

It is a weekday morning, and crews are working on houses at the KB Homes site in the Gladden Farms neighborhood of Marana.

They are framing one house, roofing another and leveling the ground to pour the foundation for a third. The homes are all next to each other.

“We were the only builder out here until recently,” said KB Homes Division President Amy McReynolds. “There’s been a couple of other builders that have opened up, which tells you a little bit of the demand for the area.”

Such scenes have not been common to the Tucson area since the housing bubble burst a decade ago. A lack of existing housing for sale may push some buyers into new homes. But a lack of skilled labor is keeping the pace of construction lower than some may like.

Now, four different homebuilders have signs posted along Tangerine Road, boasting new homes for sale and ongoing construction.

“There’s going to be more demand than there is supply [of existing homes],” said McReynolds. “Which is going to push more of those resale buyers to new homes, and as they switch to new homes the permits are going to go up, which is going to cause a challenge for labor.”

Some specialty fields in construction are starting to feel the labor pinch.

“We have heard of some shortages in certain subcontracting trades, but we haven’t seen, I think, the challenges that some other markets have seen,” said Southern Arizona Home Builders Alliance President David Godlewski.

The labor shortage is showing even though construction levels are down to almost a quarter of where they were a decade ago.

“During the peak, our region was doing over 10,000 single-family permits a year. Last year we were doing about 2,700 single-family permits a year,” said Godlewski.

Those who follow homebuilding think those workers have chosen one of two options.

The first option is that they retrained.

“Because there’s been such a long period of low levels of homebuilding, a lot of the folks over in building homes say 10 years ago had move on to a different career,” said National Association of Realtors economist Paul Bishop.

Another option is that they moved.

“When you had a lot of your construction labor leave the market because nothing was happening, right, and then your economy starts to improve, you’re going to have some shortages, obviously, in your construction labor,” said Tucson Realty and Trust’s Hank Amos.

keep reading the article on Arizona Public Media