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Home remodelers hammered by demand

SPECIAL REPORT

​By Kate Stevens. The home renovation business is hot post-recession but labor shortages in the construction and remodeling sector are extending project timetables and driving up costs, according to industry experts.

“We just don’t have the crew, the availability of the labor that we once had because so many people let the field during the recession,” said Dave White, president and owner of WHB, Inc., a Mooresville construction and renovation company.

A common problem across the Queen City, this lack of skilled labor can be lucrative for renovation companies as long as they can complete their jobs, said Mike Waite, executive director of the National Association of the Remodeling Industry of Greater Charlotte, a professional organization with 170 company members in the metro-Charlotte area.

“They’ve got all the work they can handle,” said Waite.

Driving up the demand for home renovation is the low supply of inventory and developable land in Charlotte and the Lake Norman area, said Brooks Henderson, owner of Henderson Building Group, LLC in Cornelius.

Instead of searching for a new home, homeowners are choosing to stay where they are and renovate, Henderson said.

Brooks Henrderson

“With the economy doing better, with more people employed, people seem to be making more money, and are deciding to stay in their homes and do renovations,” Henderson said.

Both Henderson and White reported seeing increases in the number of renovation jobs they have seen over the past few years, a trend that is expected to draw more workers to the field, according to national labor statistics.

Employment construction is projected to grow 10 percent from 2014 to 2024, faster than the average for all occupations, increasing from 6.5 million jobs to 7.2 million jobs, according to the U.S. Department of Labor’s Bureau of Labor Statistics.

Overall growth in the economy and population will increase demand for new buildings, roads, and other structures, which will create new job openings for construction and extraction occupations, according to the Bureau of Labor Statistics.

Demand for home renovation is high in Charlotte, Mooresville and Cornelius.

Waite said he is hearing from NARI company members words like “pipeline” and “backlog” when it comes to renovation and construction projects, vocabulary that hasn’t been used in a few years.

“We went several years without hearing about a backlog of work, and scheduling issues,” Waite said. “Now the contractors are having to plan further in advance and manipulate their pipeline efficiently to maintain the service and expectations they’ve grown accustomed to. They’re also able to be more selective in the work they choose, rather than jump at every opportunity.”

This backlog is causing slow-downs.

“We find that we get delays in our schedule because the labor force is so short right now,” said Henderson.

After the economic downturn, many skilled laborers went to Texas or North Dakota, where the recession didn’t hit the construction industry so hard, or traveled back to their home countries, Henderson said.

Some subcontractors went out of business while laborers found other jobs in other industries and haven’t returned, White said.

White says he has a steady subcontractor base he has used for years but they are stretched.

As a result of the labor shortage, White said he now considers each job carefully and is less likely to take on a smaller project.

“It’s gotten pretty intense now,White said. “You get calls on a pretty regular basis but you have to sort through and determine if they’re right to spend some time to even pursue.”

The problem is exacerbated by the fact that there has not been a new generation of laborers entering the workforce, Waite said.

The median age of construction workers is 41 with many specialized laborers even older, according to the National Association of Homebuilders statistics.

That’s why NARI works to develop the workforce by promoting skilled trades in schools, Waite said.

Other costs associated with the renovation business have increased as well.

The scarcity of skilled laborers has driven up their salaries and the increasing price of materials like lumber this year – a necessity for construction – also forces companies to pass the cost onto consumers, industry experts said.

Today, the remodeling season lasts year-round with work being able to be completed inside although Henderson said spring is typically the time when “everyone comes out of the woodwork” and wants project quotes.

The last three years, Henderson said, have been extremely busy. The most common project he sees are people purchasing a home and then deciding they want to do renovation work in their kitchens, bathrooms and bedrooms before moving in.

The average cost of a remodeling project in the Charlotte market totals between $25,000-$30,000, Waite said.

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