The U.S. already needed thousands of additional construction workers.
Then Harvey, Irma and Maria hit.
A few days after Hurricane Harvey slammed into Texas, pummeling the state with devastating flooding, a home remodeling contractor in Detroit sent a text to her four employees, asking if they would be up for temporarily moving to Houston.
She included a screenshot of a cable news graphic showing that 180,000 homes had been damaged and that clean-up and rebuilding costs could amount to $190 billion. She circled those numbers. The contractor, Asia Denson, figured there would be steady work for months, if not years. Why not head south?
One employee eagerly responded: “Hell yea plus we can help rebuild.” The others quickly agreed, too, as long as relocation costs factored into their pay.
Denson’s nearly seven-year-old firm, Denson Construction Services, isn’t hurting for work. It handles kitchen and bath remodeling projects around Detroit along with full-home renovations. It has a two-week waiting list for new projects. But she says the pay and workload could be greater in Texas, describing the post-hurricane boom as a “gold rush as far as construction goes.”
“A lot of millionaires are probably going to be made from this,” she said. “It’s unfortunate that it’s being made off of tragedy, but I guess that’s America.”
Just how many construction workers will follow Denson’s path, deciding to uproot their lives to temporarily move to a storm zone, is now the subject of debate. Harvey, Irma, and, now, Maria — the Category 4 hurricane that slammed Puerto Rico this week and left the entire island without power — struck at a time when the U.S. unemployment rate is near its lowest level in 16 years. Those who want a job can generally find one. That’s left the construction industry scrambling to recruit enough people to keep up with growing demand for homes. In industry surveys, builders consistently cite finding workers and paying their rising wages as the top business challenge. Shortages of construction workers, carpenters, plumbers, electricians and other craftsman exist across the U.S. The number of open jobs in the construction industry is near a record high.
In previous disasters, like Hurricane Sandy in 2012, the unemployment rate in construction was double what it is today. That meant people had a greater incentive to travel to take open jobs. Now? “I’m not sure that you’ll see as many workers willing to move into Texas or to Florida,” said Ken Simonson, chief economist at the Associated General Contractors of America, a trade group. Workers with plenty of demand for their services can stay in their own cities and homes. Those considering moving to a hurricane-affected area may think: “The pay would be good for six months, but I can stay here and I’ll get good work and I already have a place to live,” Simonson said
All of this adds a complicated wrinkle to the rebuilding efforts, and a question: If the industry is having such a tough time finding people, will this trio of storms serve as a catalyst to convince builders to do more without workers?
The sheer scope of the rebuilding effort would seem to demand it. In Texas, to replace and repair homes damaged by Harvey, the state may need an additional 10,000 to 20,000 construction workers, a significant increase on top of its existing base of about 90,000 workers, said Robert Dietz, the chief economist at the National Association of Home Builders. If firms can’t find those people, rebuilding efforts will slow and costs will accelerate, as contractors pay more in overtime wages or bump pay to retain their existing workforce. Already, some remodeling firms in Houston report year-long waiting lists and note that they will only work with existing clients.
“It’s not as though there are multitudes of people that are looking for employment,” said Sean Ebner, the president of PeopleReady, an industrial staffing firm that’s hiring for a range of hurricane-related construction roles in Texas, Florida and Puerto Rico. He said the company’s still managed to find people from across the country — including some who took paid-time off from their full-time gigs to work temporarily in a storm zone for extra money — but multiple hurricanes hitting so close together complicated efforts.
The company had arranged for workers from Florida to come to Texas, only to be forced to send them home once Irma approached. “Weather’s a funny thing,” Ebner said. “Having back-to-back-to-back (storms) is unusual.”
When Shermco Industries, an electrical testing and maintenance company, needed to hire 250 industrial electricians to repair petrochemical facilities in Houston, helping those operations get back on the grid, HR director Rorry Phillips left his home in Dallas and stayed in Houston for three weeks, working every day, pulling all-nighters and putting in a full day even on his 50th birthday alongside his team. He called finding those specialized electricians an “incredible feat,” given the current labor shortages.
“We can’t find people,” he said.
Phillips and his colleagues managed to track them down by recruiting some people from projects in Canada or by reaching deep into a pipeline of potential applicants, even contacting someone who had applied for a job years ago from New Zealand.
“It would be easy to pass on a guy that’s living in New Zealand under normal circumstances,” Phillips said. “These aren’t normal circumstances.”
(As it turned out, the applicant had moved back to the U.S., making hiring easier.)
Still, while industry officials fret about finding enough workers, those in Texas say they are seeing interest from people who sense an opportunity. Casey Watts Morgan, the CEO of the Greater Houston Builders Association, said she personally receives five calls a day from subcontractors outside of Texas, looking for ways to work on hurricane projects. With the state builder’s association, she’s helping develop a portal that will allow interested workers to upload their information and for Texas firms to find them.
Workers restore a power line to a pole in Marathon, Florida after it was blown off by Hurricane Irma. (Photo by Joe Raedle/Getty Images)
Ericka S. Williams, a director of sales and customer relations at Grandview Painting and Remodeling in Austin, Tex., says she’s been fielding calls, emails and Facebook messages from people across the country, looking for information on how to get paired with Texas-based contractors. Some are unemployed or underemployed or are looking to gain skills in construction fields. Others see big money.
“I think, honestly, right now, if you get in on the ground floor and let’s say you’re a guy who’s only been making $30,000, $50,000 a year, it’s a real possibility for you to make $100,000, if you’re consistent and busy with the work,” she said. “I think it’s a real, true possibility.”
Since Harvey hit, more than 1,000 individuals from neighboring states have applied for reciprocal licensing agreements to work as electricians or air conditioning and refrigeration contractors in Texas, said Scott Norman, executive director of the Texas Association of Builders. He said his group is meeting with the Texas governor’s office and education regulatory bodies to entice them to create additional classes in the construction trades, so more people can be trained to do the work. He expects most workers to come from areas of the U.S. that have still not fully recovered from the housing bust, such as the upper Midwest.
Rust Belt cities in places like Grand Rapids, Mich., have some of the greatest “abundance” of workers with construction skills, along with Philadelphia, Providence, R.I. and Hartford, Conn., according to an analysis of LinkedIn data. Houston and neighboring cities like Dallas, meanwhile, have among the worst shortages of construction talent.
Nationally, the number of construction workers is still down 808,000 from its peak in 2006. At the same time, the U.S. has 14.4 million more working-age adults now compared to 2006, according to U.S. Census Bureau data analyzed by John Burns Real Estate Consulting, suggesting many people simply don’t want to get into the industry.
In one noteworthy poll of adults ages 18 to 25 conducted last year, 63 percent of people who identified themselves as undecided on their career paths said they would not consider construction as a career, regardless of the pay. “A lot of workers today, particularly among millennials, and increasingly, Gen Z, they want to do an occupation that involves sitting behind a computer,” Dietz, the economist, said.
Given that reality, some contractors say they’d readily embrace more efficient building methods that could help them do more with fewer people or build homes faster than the seven months required for construction. But the industry is fragmented, and slow.
In the U.S., there are about 50,000 homebuilders. While a few large, publicly traded builders exist, the majority are still small, family owned companies that get funding from local banks and lack resources to overhaul their practices or incorporate new technology. So even though the industry is desperate to do more with its existing workforce, change won’t come quickly, Simonson said.
In a survey of 1,600 contractors conducted in August by the Associated General Contractors of America, only 22 percent of companies said they were using labor-saving equipment and tools such a drones, robots or GPS-guided machinery. Just 11 percent said they had moved to off-site prefabrication, a method of construction that involves manufacturing pieces of buildings in factories and assembling them on site.
Will Holder, the president of TrendMaker Homes, a Houston builder that sells 500 homes annually, most priced above $400,000, says he could envision using technology like 3D printers in the homebuilding process. But he’s also skeptical of new technologies, having watched peers get burned in the past.
“I’ve seen it over the course of my career: Somebody comes up with the greatest new siding ever. Ten years later, they’re ripping it off the houses and trying to get over lawsuits,” he said. “That’s a definite concern.”
He said the industry “is due for some level of automation and some real changes in how we build homes,” but cautioned that he wouldn’t be the first to do so.
“I don’t want to build 500 houses with the wrong thing. I think I would be not an early adopter of a lot of things; we kind of like to be the second wave. We ride that second wave when it comes to new products, new methods,” he said.
Worker shortages and the need for quicker building methods have spurred change in the past. In the early 20th century, contractors built most homes with plaster — a time-consuming, laborious process. The invention of drywall, the now ubiquitous combination of paper and gypsum, came in 1916. It didn’t gain widespread acceptance until decades later, after World War II, when consumers rushed to buy homes, and builders responded by adopting drywall as a faster way to construct them. The constraints builders face today will “drive innovation from other solutions,” said Todd Tomalak, vice president of research at John Burns Real Estate Consulting.
In the meantime, for people like Denson, the contractor in Detroit, automation is not the concern — it’s when she and her crews can get started. She’s currently talking with contractors in Texas and waiting to bid on projects. She hopes to move in the coming weeks and says the rebuilding after the storms could get her closer to her eventual goal of working as a federal contractor on construction projects.
“I definitely feel like it’s career-changing,” she said. “This could be to get me where I want to be.”