Time for New Policies to Address Today's Construction Challenges
By now, nearly everyone has read about the construction labor shortages facing the industry. I say “by now” because this has been an on-going story for at least the past decade. The only difference is that today it’s more significant than ever.
The National Association of Home Builders recently found that 82 percent of its members believe the cost and availability of labor are their biggest issues. In 2011, only 13 percent named labor costs as their biggest worry (Curbed - Jan23, 2018).
On top of this historic labor shortage, our nation faces a HUGE need for infrastructure in all sectors. Every four years, the American Society of Civil Engineers’ Report Card for America’s Infrastructure depicts the condition and performance of American infrastructure in the familiar form of a school report card—assigning letter grades based on the physical condition and needed investments for improvement. In 2017, ASCE gave the U.S a “D+” overall for infrastructure needs, with an estimated cost of $4.6 trillion needed for improvements over the next decade. Just slightly above failing for our nation’s schools, roads, bridges, sewer systems, and parks.
Amazingly, that $4.6 trillion does NOT include the cost of additional housing needed to adequately shelter people. According to CNBC, sky-high demand and record-low supply continued to push home prices higher in December 2017, far faster than income growth. U.S. home prices increased 6.3 percent compared with December 2016, according to the much-watched S&P CoreLogic Case-Shiller national home prices index. The index measures the nation's 20 largest metropolitan markets, with none seeing a price decline.
And the problem is even bigger in California, where the average home price is $561,000 – twice the national average. California has added fewer than 80,000 homes each year over the past decade, while the need has been closer to 180,000, according to the state Department of Housing and Community Development.
And none of this includes commercial and retail construction needs. With increasing regularity, agencies, owners, and developers are considering modular and offsite construction solutions to address their needs. But we also are starting to see the same “solutions” included in policies and proposals.
How does the saying go – when all you have is a hammer, everything looks like a nail. Policy makers continue to use the same tools in their toolbelt such as prevailing wages, project labor agreements, and local labor preferences when talking about housing and school construction needs. There is a decades-long conversation about the need to recruit more young people into an again industry. But far less often, we talk about how to build more efficiently with the same labor resources or even with less labor.
Let’s give our policy makers more tools to address these needs. Streamline and standardize the approval process for modular and offsite construction practices. Incentivize manufacturers to open new plants or to expand current ones. Reduce procurement practices (such as design-bid-build) which virtually eliminate modular company participation. Develop housing construction policies that encourage resource efficiency over political paybacks. Teach robotics, building information modeling, and industrialized construction at vocational schools.
What’s at stake? In ten years, the U.S. will start to resemble a third-world country if we do not embrace industrialized construction processes now, like many of our European and Asian counterparts have. There is simply no other way to come close to meeting our infrastructure needs unless we do so.
Started on October 31, 2018 by Tom Hardiman