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The Construction Labor Shortage Needs Major Institutional Fixes
Ask commercial developers in a major market to name their biggest challenges, and the rising cost of construction will be at or near the top of the list. But while the complaints have grown louder in recent years, the underlying problem has been decades in the making, and the current administration’s policies only figure to make it worse.
A major contributor to the present challenge of obtaining construction labor is the current point of the development cycle. A Fannie Mae study found that 404,000 new units are slated for delivery in 2017, 61,000 more than came online just a year ago. In the near future, construction labor will likely become easier and cheaper to come by; the same study expects 2017 multifamily starts to decline by at least 25% compared to 2016.