Who is going to build California's needed housing?

Mar 7, 2019

This month San Luis Obispo will host a housing summit, featuring the state lawmaker behind a push to override local zoning laws and build high-density housing near centers of public transportation and jobs. And recently San Luis Obispo County officials signed an agreement with Central Coast builders and nonprofits dedicating themselves to building a lot more affordable housing in the coming years.

What’s not being talked about is how the planned construction is actually going to get done, when there currently are not enough construction workers to build all those new housing units.

"California will need at least 200,000 new housing construction workers to substantially address the affordability problem, and under status quo conditions, we're simply not going to wind up having those numbers of people," said Scott Littlehale. 

Littlehale is the author of a recent report called Rebuilding California: The Golden State’s Housing Workforce Reckoning. The report was paid for by a nonprofit group that advocates for the construction industry and prevailing wages—wages negotiated by regulatory agencies and collective bargaining, rather than determined by the free market, and whomever will do the work for the lowest bid.

"The data all pretty much agree that the residential sector of California's construction industry simply doesn't offer competitive compensation to attract the numbers of people that we need," Littlehale said.

Andrew Hackleman is executive director of the Home Builders Association of the Central Coast, and said he agrees in principle the state's construction workforce is already extremely strained.

"There are many questions I have about the Governor's 3.5 million homes in four years goal; certainly our lack of construction trades workers is very serious," Hackleman wrote in an email to KCBX News. "I'm not aware of a way to overcome this challenge in the timeframe being floated."

So who is going to build all the new housing? Don’t look to migrant workers from south of the border, said Littlehale, like those the agricultural industry depends upon.

"We should not expect there to be a surge in the immigration of people without college degrees coming to fill these jobs," Littlehale said. "We're going to have to look domestically to develop a skilled, trained workforce through apprenticeship programs—programs that already exist but that are under-utilized, practically not utilized at all—by the California housing industry."

Construction work is physically demanding and it can be dangerous, said Littlehale, and higher wages used to compensate for the on-the-job risks. But not anymore.

Littlehale also said the construction industry can’t fix the lack of workers alone.

"Because of the cutthroat, competitive dynamics that bind subcontractor's hands and really prevent them from, in a coordinated fashion, raising wages," Littlehale said. "I think it's going to require policymakers to provide a strong nudge to set standards that will be attractive, that will build the skilled workforce so that we can meet these housing supply challenges."

San Luis Obispo’s housing summit is slated for March 22, but the current residential construction workforce is not among the scheduled topics. Littlehale said he hopes his research will bring the topic to the table.