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Construction worker shortage in Arizona; businesses luring workers with good pay, promise of raises

Posted: 6:13 PM, Aug 11, 2016
Updated: 2016-08-12 15:31:13-04

With the demand for new homes climbing, there's a big need for people to build them. The construction industry has been booming, but home builders and contractors are having a tough time finding skilled workers to do the job.

At Toll Brothers home builders, division president Bob Flaherty said business is booming.

"In June, we had the highest number of permit activity since August 2007 with 1,900 new permits. So that puts us on pace to do 18,000 to 20,000 new homes this year compared to 16,000 last year. That's a pretty good story," said Flaherty.

He added that the biggest challenge facing the industry is the shortage of construction workers.

"We just flat out do not have enough skilled labor. Meaning framers, concrete finishers, plumbers, electricians, roofers, drywall contractors. We have houses that sit idle. It costs us money, and that is not what we like to see," said Flaherty.

Some of the reasons for the shortage of work crews in Arizona include the political climate.  Flaherty said the construction industry is traditionally run by foreign labor. In Arizona, Texas, and California there are primarily Hispanic workers. He added that most of the workers are legal, but the political climate had pushed the labor market into other states.

"Some have to do with policies put in place by the state. SB 1070 certainly didn't help us, and part of it was a slow down in construction," said Flaherty.

Troy Love has worked as a roof loader for the last eight months. He started as a temp, but the attractive wages and his passion for building lured him into the industry.

"I just like to see something from start to finish, and the pay is nice," said Love.

He said the starting pay for his job was between $11-13 but he got a significant raise after six months on the job.

Flaherty added that's pretty routine.  Arizona is trying to lure construction workers back into the state by promising a 15-20% higher salary than other states.

Because of the competitive market, Flaherty said they would not be passing labor costs for home building on to home builders.

"I can only sell a home for what the market is willing to pay me for the home, regardless of what it costs. We are absorbing those cost increases," he said.

Industry experts said during the real estate boom, there were more than 60,000 new builds in the metro Phoenix area. During the housing market crash that fell to about 6,000. Now the market continues to be on the upswing, with about 18,000 to 20,000 new builds, but the labor market had not rebounded.  At its height about 250,000 skilled workers had jobs in the state, today they were about 140,000 jobs still need to be filled.

Flaherty calls it hard work, but also rewarding. He started his career swinging a hammer.

"Right now probably the sub-contractors that need the most help are roofers, stucco contractors, and dry wallers," said Flaherty.

Most job postings state they're hiring immediately with no experience needed.

Flaherty said it's a great time to buy a home with interest rates low. And, because of the construction worker shortage, builders that could normally finish a home in 4-6 months are now averaging about an 8-month turnaround, but Flaherty called that a win-win for buyers.

"This gives you a longer time to sell your home."