Analysis | Coronavirus | Housing Markets and Economics | May 15, 2020

Creating the Workforce Needed to Build Housing

Written by Mike Kingsella and Melissa Winkler

Reading time: 5 minutes

The COVID-19 pandemic has shed an even brighter light on the critical need for safe, affordable housing. The nation’s existing housing crisis has compounded the impact of COVID on public health and on the economy. Even before the current crisis, a shortage of homes at every price point left nearly half of American renters cost burdened – paying more than 30 percent of their income on rent. This cost burdening has prevented families and individuals from saving for a rainy day, forced low and moderate-income households into unstable housing, and has limited economic growth across the nation.

Now, as COVID-19 creates an unprecedented public and health and economic crisis, an already struggling housing ecosystem faces a new stress it is ill equipped to handle.

Last week’s Insights Report discussed how housing will be key to recovery. This week, we explore the positive impact that targeted housing recovery actions can have on workforce development.

Unemployment filings rose to 36.3 million since the COVID-19 crisis began, and this number is expected to grow as shelter-in-place orders remain in effect and consumer spending declines. Additionally, without a clear understanding of what a return to normal will look like, reaching full employment will likely take a very long time. When the dust settles, some industries may look much different than they did before, or they may not return at all. This shifting labor force opens the possibility – or rather, need – for new, targeted workforce development in skilled construction labor.

The housing crisis is the result of a variety of interrelated factors – burdensome regulations that limit new housing production, difficulty financing projects, restrictive zoning that limits zoned capacity, and the increasing cost of raw materials. Labor costs and constraints also play a critical role in limiting housing production and development. Pre-COVID estimates from the National Association of Home Builders found that there were more than 370,000 construction job vacancies in 2020 and that by 2028, there will be 3 million job openings for skilled and unskilled construction labor.

Construction forced to pause during the crisis (though many jurisdictions recognized construction as essential) will eventually restart. Targeted workforce development programs and policies can help speed recovery in the labor market while simultaneously increasing the nation’s capacity to produce housing that is affordable and accessible to millions of families.

Recovery programs that retrain workers for both skilled and unskilled labor and connect them to jobs and apprenticeships will have benefits that extend beyond housing and into ensuring a speedier recovery from this unprecedented shock. While the role of domestic manufacturing and the impact of automation are important discussions to have, housing construction is an industry that is largely immune to these phenomena. Ensuring that we have the workforce needed to match housing demand will buttress a vital domestic industry and fulfill a critical societal need.

It may sound overly simple, but it is a truism that bears repeating – when you lower the cost of building housing, you lower the cost of purchasing or renting housing. But when construction costs contribute to making housing unaffordable, it compounds inequality, as low- and moderate-income families and individuals are shut out of high opportunity and job rich areas. Targeted workforce development that spurs construction in the places housing is needed most will have ancillary benefits that extend far beyond the construction site.

Prior to COVID-19, housing construction was experiencing a labor shortage that exacerbated underproduction and increased the cost of housing. A lack of effective workforce development programs compounded the labor shortage. As we look toward rebuilding after the pandemic, we have the opportunity to rebuild the workforce needed to build the housing for our future.