Despite the pandemic and recession, home sales are booming. In fact, demand is outpacing residential construction. The gap between housing needs and housing production has never been wider. A major obstacle to filling it: The nation’s home builders face a severe skilled labor shortage. Some of the jobs that are in highest demand are carpenters, electricians, HVAC and solar installers, plumbers, painters, and masonry workers. In the last six months, unfilled positions in construction have averaged 275,000, according to Robert Dietz, chief economist at the National Association of Home Builders (NAHB).
The unrepealable law of supply and demand is driving up home prices, making the country’s longstanding affordable housing crisis grow even deeper. Meanwhile, a heartbreakingly high number of Americans are losing their jobs in hospitality and other service industries. A disproportionate number of young people, women, minorities, and lower-income adults have been hit the hardest.
A solution to these three, simultaneous problems—unemployment, skilled labor shortages and lack of housing availability—seems obvious. As housing demand soars, the acute labor shortage in the home construction business can provide new opportunities to unemployed workers. Even better, with labor in such short supply, builders must pay more for their workers. And in a pandemic-driven economic downturn nationwide in scope, it’s important to note that the housing shortfall provides these new opportunities in every region of the country.
It’s time for a major national push to train new workers in the skilled building trades. Leaders in housing and workforce training must come together, first to change the perception of trade jobs and then provide the education and resources for those who need and want to enter a new field in this changing economy.
A good place to begin building greater momentum for a cross-industry effort is with state housing finance agencies (HFAs) and local home builder associations (HBAs).
HFAs are state-chartered, nonprofit organizations that provide financing and other services for affordable housing and community development. But they are more than reliable sources of capital in the affordable housing system. Over and over, state HFAs have demonstrated their powerful ability to create nonpartisan coalitions of housing interests in their states, across the entire spectrum of the private, public, and nonprofit sectors. And that’s where they can play a vital role in helping to solve the housing production gap.
What can state HFAs do? To start, they can make workforce development a major priority. For example, in Memphis, Tennessee, the Tennessee Builders Education Foundation (TBEF) launched its trade skills training program in 2019 with seed money granted by the Tennessee Housing Development Agency. TBEF started with three high schools where Black students were in the majority. More than 150 students quickly enrolled. By the spring of 2020, another three high schools were added and a total of 248 students were learning building trades. While the pandemic forced Shelby County schools to close before students could complete their training, TBEF board member Keith Grant invited program participants to meet with him and his subcontractors. Several dozen accepted the invitation, and all of them left with job offers.
Likewise, HBAs, which form a nationwide network of the membership groups that organize home builders at the local level, can play an important role as well. They know their markets backward and forward, and they can match the labor needs of builders and subcontractors with a steady supply of newly trained workers. Many HBAs already are working with some of the nation’s leading nonprofits for training in the skilled trades. The Home Builders Institute (HBI), historically renowned in the construction industry for its training curricula, is making significant inroads—stepping up its efforts to join forces with local school systems, state HFAs, and other state-based organizations to help close the skilled labor gap. HBI, in partnership with the NAHB, has pledged to train 50,000 workers over five years to prepare students for building industry careers and meet the demand for skilled labor. The organization’s placement rate among students is more than 85%. With greater partnerships with state HFAs, and other state, regional, and local groups, it can be even higher.
Yes, the housing market is roaring. Economists expect a pent-up demand to last. But with the shortage of skilled labor, the nation simply cannot build enough homes to satisfy the needs of those seeking homeownership,
The choice is clear. To build homes, especially when the economy rebounds and demand grows even stronger, America needs more skilled workers now, particularly those who are newly trained, who have not traditionally been part of the construction workforce, and who have been inordinately affected by the pandemic and recession. Workers trained in the building trade skills increase productivity, which lowers costs to consumers. Home builders and their local associations, and state housing finance agencies, all working together to support skills training of young men and women now will mean more good jobs and a larger supply of affordable housing in an economic recovery.
