​Apartment Building Developers Face Shortage of Construction Work

[William Hull]

Since the crash of the housing market, there has been a substantial impact on the construction industry. As developments are continuing to grow in number and the industry is picking back up, work is available again, but we are seeing a trend of construction laborers being in high demand. This is causing a lack of workers for the current demand. Contracts are becoming more competitive, but the companies are not finding the flow of workers required to answer the need. This is due to a variety of factors, including loss of previously skilled workers moving to other industries, and immigrants moving back to their original countries, neither looking to return to this type of work. Areas like the Bay area near San Francisco have taken the hardest hit, while areas like Washington D.C. have been able to begin bouncing back. While it is anticipated that this tight labor market will continue to worsen and harm the cost of materials, this lack in the labor force does not seem to have had a sizable impact on the cost of materials at this time. At this time, this excludes that of lumber, as there has beenupwards of 14 percent increase in cost, due to negotiations with Canada.

Key Takeaways:

• A very tight construction labor market is going to get even worse,” says Bill McDonald, president and chief investment officer of Mill Creek Residential, a multifamily developer.
• The contractors who build apartment properties are having a hard time hiring and retaining workers on their construction projects.
• The labor shortage has moderated and improved in some markets as supply has come in

"So many new developments are under construction, they are likely to compete with each other—and not just for residents."

Read more: http://nreionline.com/multifamily/apartment-building-developers-face-shortage-construction-workers