Contact Us
 

Are labor shortages causing delays in multifamily construction?

build-to-rent podcast market research Oct 11, 2021

Depending on what state you are in, there might be massive demand for construction labor. What kind of delays should you expect during your next rental property build?

Watch the full episode here: https://youtu.be/6uHbi4-LkHw


Like a lot of builders in 2021, we get labor delays.

We've talked with not just our main builder, but we've talked with other builders to see what they're seeing, and their delays and whatnot, not just materials, but labor, getting workers and people to show up consistently, and keep them on that job.

Either they don't work or show up, or they're doing something else. Or these guys are just hopping into different jobs, whoever's gonna pay them the most at that time.

Sherida Zenger

And it's often a very minimal amount. I know that we ended up hearing in one of the Idaho projects that they said "we'll pay you $1 more an hour" and all of a sudden we have people show up on the job site.

Steve Olson

All of a sudden that farmer was available. It's not a great long-term business plan to just leave job sites for this guy's gonna pay me more.

I remember after the housing crash, labor, they just got treated like garbage, everybody assumed that the tile setter was willing to work for free. And he was for a while, there was no work. And that's come full circle times three, by now, right?

And it's exacerbated by the fact that I tell people that hey, look, Millennials don't want to be framers or plumbers, they want to sit at Starbucks, and they want to code apps, or be influencers. Nobody's out there willing to hammer nails or shovel dirt anymore. And so it makes the fact that if you're willing to do that, you're a lot more valuable.

Sherida Zenger

It's a dying breed, that's for sure. People don't want to do manual labor.

Steve Olson

My daughter, she's 14. She's talking like, oh, what do I want to be when I grow up? You know, and she listed a whole bunch of white-collar stuff. As a sure, you don't want to own like nails or staple factory or an HVAC company, or something like that, that everybody needs that nobody can seem to supply right now?

So we'll see if the labor thing can get corrected. It's gonna take time but that's perpetual price pressure.

Sherida Zenger

And I think it's kind of market-dependent as well. Arizona, we're not seeing a labor shortage.

Steve Olson

We don't have a labor problem in Houston, but Idaho and Utah are very difficult. Yeah. I know it's a crazy time, there's we're hiring signs everywhere. Listeners pay attention when you're out today.

How many hiring signs do you see? I think that does depend on your market. But in the markets that we operate in, there are just tons and you can't fill the jobs.

FIG's Waitlist:

Each year, the Fourplex Investment Group releases new projects in a variety of markets. Joining FIG's investor waitlist is the easiest way to grow your portfolio before reservations fill up.