Construction worker shortage poses obstacle to building new housing

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Workers construct an affordable project out of shipping containers for FlyawayHomes in South LA. Photo by Avishay Artsy

California is 200,000 construction workers short to meet Governor Newsom’s housing goals. This number comes from a new study for Smart Cities Prevail, a pro-union nonprofit. That’s important to keep in mind, because what they say is that the shortage is in professional, union labor that pays a good wage and benefits.

That’s the kind of labor that would be expected on projects receiving any kind of public support.

The report includes a quote from USC housing economist Gary Painter: “It’s not so simple as to say, ‘Oh, we have a shortage of construction workers.’ We have a shortage of construction workers at the price people want to pay. The simple way to

solve shortages is to pay people more.”

So what’s the cause of the shortage?

The study found that California lost about 200,000 construction workers since 2006. Many lost their job during the recession and found work in other industries.

The study also finds that the industry hasn’t done a good job of training low skilled workers to get them into better-paid and higher-skilled positions.

DnA spoke with Ignacio Rodriguez, an architect who specializes in high end home construction in Los Angeles. He got his start with technical drawing at Compton High and points out that building is a major industry in LA, and yet kids are not being steered into the trades. He says starting in high schools students are pressured to pursue the college track instead of going into manual work.

“These trades were family trades, you know? The skills were handed down through generations. And you're seeing a break in that where the father did plumbing and then the son is now going to become an accountant or something totally different. And so that trade, all those 50 years of experience, are going to end on that generation when that gentleman retires,” Rodriguez said.

Are living costs a factor?

Ironically, it is so expensive to live in California that workers on housing projects cannot afford the housing costs.

“We're actually bringing contractors out of state because it's cheaper for us to bring them from out of state and have them live here and pay for their housing than it is to use the contractors that are in the city because their numbers are too astronomical,” Rodriguez told DnA.

Plus, there’s an add-on if they have to drive a long way to work, like to Santa Monica or Malibu.

He says construction workers can name their price right now. And that only piles on top of the high costs of materials and land that add to the many factors making housing construction so expensive.

Are union wages a deterrent?

The report finds that construction workers are quitting the building industry for better paid jobs in other industries. Yet many developers and contractors say that a project doesn’t pencil out for them unless they use non-union labor.

When DnA visited a project under construction for FlyawayHomes, a for-profit developer of housing for the formerly homeless, the company’s founder Lawry Meister said the prevailing wage adds anywhere from 15 to 30 percent to their costs.