More trained workers needed to increase housing supply, ease affordability

The severe shortage of construction workers that continues to weaken housing supply and affordability can be mitigated by working closely with unions to train and place thousands more in the skilled trades, according to a report by the Home Builders Institute.

"The lack of skilled construction labor is a major challenge for the nation's home builders who are struggling to expand inventory and improve affordability," HBI’s CEO Ed Brady said. "More training means more pre-apprentice talent placed on job sites.

“More and better trained workers will result in greater productivity. Greater productivity will not only mean a boost to the housing supply but also an increase in home builders' ability to pay workers more, as the nationwide competition for nearly all categories of labor continues to be stiff."

Brady called for closer cooperation between the construction industry and building and trade unions to attract more people into the trades: "We are in a new era of need and opportunity that requires serious collaboration," the chief executive said. "The building industry, labor, and the public and nonprofit sectors must work together to create good-paying jobs for a new generation of skilled workers in construction."

The Spring 2022 HBI Construction Labor Market Report finds the estimated worker growth required for the construction sector is approximately 740,000 per year. Meanwhile, the demand for construction workers remains strong, with 103,000 net residential construction jobs added over the last 12 months and a recent monthly average of almost 12,000 additions, the report states. The report is compiled for HBI by the National Association of Home Builders (NAHB) Economics Department.

The analysis continues to show that the construction industry needs an additional 2.2 million new hires from 2022 through 2024 to keep up with demand. "That is a skilled labor shortage at crisis level," Brady said.

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The need to improve housing affordability by shrinking the supply shortfall has garnered attention in recent days. Last month, the Biden administration announced a plan to ease housing costs and boost housing supply over the next five years.

"Boosting housing supply requires training and placing thousands more skilled workers in good-paying jobs," Brady said. "That is urgently necessary as many of those in the trades have aged out or left the sector permanently for other opportunities. As a nation, we need to build the next generation of skilled tradespeople.

"That means recruiting more women. It means training and placing minority, lower income, and opportunity youth for good-paying jobs as an important way to fight against social inequity," the CEO added. "It means providing trade skills education to veterans and transitioning military. And it means reaching out to secondary school students, and those who influence their decisions, to change their perception of careers in the trades."

Brady said the problem can be mitigated by expanding trade skills education in secondary schools and community colleges, and industry-sponsored facilities and community programs. "The valuable skills learned in training programs help graduates receive the dignity, respect, pay and benefits they deserve. In turn, training increases productivity which allows employers to meet the compensation requirements driven by today's competitive labor market," he said.

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The National Association of Home Builders now is forecasting an economic downturn for 2023. But the long-term deficit of housing is expected to remain during any cyclical, interest-rate driven recession, according to NAHB Chief Economist Robert Dietz: "This research shows us that this housing and skilled labor shortage crisis is not going away," he said.

HBI trains and places thousands of skilled workers every year for the building industry. With a 200+ training team working in 46 states, HBI is the nation's leading nonprofit provider of trade skills training in residential construction. Through the organization's industry-recognized curriculum utilized in nearly 400 programs, HBI trains in a variety of skills including carpentry, electrical, plumbing, building construction technology, HVAC, and masonry.

The organization provides pre-apprenticeship training and certification programs in secondary schools, community colleges, technical institutes and training academies for middle and high school students, veterans and transitioning military, underemployed, unemployed and displaced workers, low-income and opportunity youth, and justice-involved youth and adults.