Construction labor shortage will slow post-fire rebuilding efforts

“If you’re a homeowner, you’re going to reassess your life as a result of this event, and if you are a developer you are going to look at all your options,” Robert Eyler, a professor of economics at Sonoma State University, said. “Homeowners will have tough choices to make."

By J.K. Dineen
SF Gate

Even as wind-blown flames menaced entire neighborhoods in Sonoma and Napa counties, even as thousands of evacuees bedded down on cots in makeshift shelters, North Bay builders were coming to terms with a daunting reality: a multiyear rebuilding effort the region appears unprepared to tackle.

“There are not enough workers up here,” said Keith Woods, chief executive officer at the North Coast Builders Exchange, an 1,100-member Santa Rosa trade group. “Contractors couldn’t find workers to do remodeling or repairs before the fire. It’s a serious problem that will definitely delay the rebuilding effort.”

In Santa Rosa alone, the fires have consumed 2,834 homes, roughly six times the number of new residential units that will be produced this year in all of Sonoma County. Tom Carreiro, president of Santa Rosa’s Carreiro Builders, said the phone started ringing Monday with clients eager to be first in line when the rebuilding starts.

“The fire is not even out yet and people are calling,” said Carreiro. “They know it’s going to be really hard to find a good contractor.”

If natural disasters tend to expose existing problems in stark relief, the Wine Country fires are shedding new light not just on the North Bay’s housing shortage but also on the fact that there are not enough workers to meet demand.

Since Monday morning, Wright Contracting, a large Santa Rosa builder specializing in everything from schools to wineries to apartment complexes, has been fielding calls from a steady stream of clients who have had their homes destroyed, said Mark Davis, the company’s president. He is worried that his industry will lack the workers and materials to get the reconstruction done, particularly with San Francisco’s building boom still attracting skilled laborers with higher wages.

“Labor is tight. Materials are tight. A special order of windows that would have arrived in eight weeks a few years ago now takes closer to 16 or 20 weeks,” he said. “The younger generation is not interested in working hard and learning a trade. They all want to play on computers and stuff.”

The fires will force soul-searching for homeowners as well as developers, said Robert Eyler, a professor of economics at Sonoma State University. Many more affluent homeowners with ample savings and strong family networks will take their insurance money and buy in other places rather than wait out the years it could take to rebuild in the Wine Country. Other commercial property owners — particularly those with larger parcels of land — may decide to try adding value with a denser, multifamily development.

“If you’re a homeowner, you’re going to reassess your life as a result of this event, and if you are a developer you are going to look at all your options,” Eyler said. “Homeowners will have tough choices to make. You can take the insurance money and walk. You might decide to rebuild in Boise, Idaho, or some other place.”
But many of the fire victims, especially middle-class homeowners in devastated neighborhoods like Coffey Park, have fewer choices. Tied to Santa Rosa by jobs and schools or elderly parents who need care, many of those people will be thrust into the rental market during the rebuilding process. But in a Sonoma County rental market with a 2.3 percent vacancy rate, they may have to move farther than they would like.

“There is not a lot of flexibility in the housing market to absorb all the new demand,” said Eyler. “You are going to have thousands more people looking for places to rent in a nonexistent supply of rental housing.”

Eyler hopes the push to ease the housing crisis through increased density will pick up steam. “It would be a shame if we ended up with fewer housing units on the other side of this,” he said.

Larry Florin, executive director of Burbank Housing Development Corp., the largest builder and owner of low-income housing in Napa and Sonoma counties, said that even before the fires there were more than 15,000 qualified individuals and families on his group’s waiting list. The group owns 3,000 rental units and has developed another 1,000 units of deed-restricted affordable home-ownership units. It has two projects in Napa under construction.

“Demand is ridiculous,” he said. “It’s hard to imagine what is going to happen. Where are all these people going to go?”

Woods said his group, which helps recruit high school seniors into the building trades, will have to expand its efforts.

“The worker shortage is the long-term problem,” said Woods. “Getting people sheltered is the short-term problem.”

Carreiro, the Santa Rosa contractor, said his group can only do so much.

“We are going to do what we can, but we’re going to have to say, ‘Sorry, we can’t take on any more,’” he said. “I have to be real and honest about the situation. We can’t take on more than the company can handle.”