Could Gov. Newsom’s ambitious housing goals be sidelined by a worker shortage?

Updated: Jan 16, 2019

POSTED: 1/14/18

Author: Leonardo Castañeda

Publication: Marin Independent Journal

Electrical apprentice Miguel Diaz is photographed during a lab at the International Brotherhood of Electrical Workers Hall in San Jose, Calif., on Thursday, Jan. 10, 2019. (Randy Vazquez/Bay Area News Group)

Gov. Gavin Newsom has said he wants to build as many as 3.5 million new houses by 2025 to solve California’s housing crisis.

But those ambitious goals could be derailed without hundreds of thousands of new construction workers needed to dramatically accelerate the pace of California home building, even assuming that cities agree to zone for more housing and there’s money available to build it all. And it’s hard to imagine, given recent trends, where that many additional workers in the low-wage, high-risk industry would come from.

Newsom took an early stab at the money question in his first budget, offering $500 million in state funding for middle-income housing, But he wants California’s companies to take on a bigger role funding new homes. And he said he’s already talked with some Silicon Valley tech companies who are open to cooperating.

Ramping up housing construction from about 100,000 units in 2016 to 1980s levels — about 300,000 new homes were built in 1986 — would require some 200,000 new workers, according to the researcher behind a new study for Smart Cities Prevail, a pro-union nonprofit. But even that influx of workers wouldn’t be enough to meet the goal of 500,000 new houses a year that Newsom floated during his campaign.

“Workers are not going to fall out of trees,” researcher Scott Littlehale said.

Littlehale’s study found that California housing construction isn’t just failing to attract new workers. It’s losing the workers it already has, many of whom are low wage and lower-skilled.

From 2006 to 2017, California lost about 200,000 construction workers. And within the construction trade, many workers are opting for commercial building jobs, which pay more, have better benefits and steadier work.

During the boom building years, the construction industry was “dependent on young workers without a college degree and on immigrant workers,” Littlehale said. Today, both populations are on the decline.

A brutally honest ad for a career in housing construction, according to Little, might read like this: Pay that’s, on average, 24 percent lower than other jobs and few benefits. “Oh, by the way, you have a high likelihood of getting injured during the course of that career and you may get laid off,” he said.

Miguel Diaz, 26, chose construction anyway. He started at 22, doing stints as a painter, carpenter, plumber and electrician. At his last job, he said he was only one of two native English speakers, which helped him earn $20 an hour and steady work. But he said many of his co-workers, who were undocumented or here on work visas, were often paid much less even if they were more experienced, and would go days without work, which can be devastating for workers living paycheck to paycheck.

“My dad just said, ‘Go do something that will make the most money and you won’t have to break your back as much. Use your brain,’” Diaz said.

So Diaz, who has a six-year-old son, applied to become a union electrician in commercial construction.

Daniel Romero, the assistant business manager of the Santa Clara County electrical workers union where Diaz is apprenticing, said starting union wages are about $27 an hour for commercial jobs compared to $17 an hour for residential work.

“We have an applicant pool list for commercial that’s 1,000 people deep,” Romero said. “And we’ve got an applicant pool list for residential that’s maybe 100 people, 150 people.”

Littlehale said part of the problem is the industry hasn’t done a good job of training low skilled workers so they become highly skilled — and highly paid.

That’s what attracted Jerry Blake, 24, to the electrical union’s apprenticeship program. A former seasonal delivery worker for UPS, he switched to residential construction when he was 20 and began working as a non-union electrician.

He said he knew that if he got hired full-time as a UPS driver he could make more than the $13 he was paid when he first started in construction, but he liked the hands-on work. He eventually worked his way up in residential building to make $22 an hour, but still never got any training to extend his skills.

“They promised me they would send me to school,” he said. “We were supposed to do online school, but somewhere down the line that never happened.”

Now, Blake’s hoping to get a pay boost by moving into commercial construction.

Littlehale cautioned that even if Newsom and other government officials resolve many of the other major roadblocks to building more housing, they’ll never achieve their goals if conditions don’t change for workers.

“You have a lot of people saying state and local government need to get out of the way on the regulatory front,” Littlehale said. “If state and local officials do nothing on the labor side, they’re going to have a lot of issues.”

And if housing prices stay high, even the most highly skilled construction workers will struggle. Diaz said he’s now earning $30 an hour, and anticipates $5 raises every six months, but he still lives with his parents. Even as a journeyman, when he expects to make about $70 an hour, he doesn’t think he’ll be able to afford to buy a house in the Bay Area.

“I don’t see myself buying a house, honestly, in this lifetime,” he said. “Unless I want to move to Stockton or Modesto or Santa Rosa, I don’t see it.”

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