NAHB’s efforts to overcome hurdles in affordability involve workforce-training programs, dismantling the millennial myth, and more
By GREG UGALDE
You have seen the headlines: “Millennials are killing the napkin industry,” “Millennials are killing the yogurt industry,” “Millennials are killing the diamond industry.” One thing that Millennials are being blamed for that truly is not their fault: killing homeownership.
The messaging is that Millennials are renting longer to buy a more expensive home later; this is not the whole story. For many Americans aged 22-37 and older, entry-level housing is either unaffordable or unavailable. Recent housing-price measures, including new home sales, show the demand for housing within the $150,000-$300,000 range has grown 11 percent since 2018.
We have come a long way in a decade, but the American Dream of homeownership remains out of reach for too many people. By addressing some of the following challenges, I am confident that we can make this dream a reality once more.
As I travel around the country during my year as chairman, I hear from builders that one of the largest hurdles to building affordable housing is a lack of skilled labor. More than 80 percent of builders and remodelers say they are experiencing labor shortages. There are currently about 280,000 unfilled construction trades jobs in the United States.
Unfortunately, fewer high school students are opting to pursue skilled trades. As the number of skilled workers decreases, the cost of bringing these critical professionals onto a build site skyrockets driving up the cost of new homes. The National Association of Homebuilders (NAHB) is working hard to combat this by building up the labor force.
We have established a Skilled Labor Fund that is providing scholarships so thousands of students can attend accredited training schools around the country. The Skilled Labor Fund works with the National Housing Endowment to award scholarships. The Endowment’s scholarships also help develop and expand construction management programs.
The Home Builders Institute, NAHB’s educational arm, is providing skills training for youth and adult populations, veterans, and displaced workers. With an 80-percent job placement rate for graduates, HBI training programs consistently benefit graduates and the communities where they live and work.
Last year, HBI received a $50 million grant from the Home Depot Foundation to train 20,000 new skilled workers over the next 10 years.
I am hopeful that providing more ways to make training programs accessible to a broader population, and changing the conversation around vocational training, will fill the labor shortage gap.
Excessive Regulation/Permitting Costs
NAHB economists recently looked at the cost of various inputs into a new home and found that regulation and other costs imposed by all levels of government account for 24 percent of the price of producing a new single-family home. The amount is even higher for multifamily housing.
These burdensome regulations push the price of housing beyond the means of many families. NAHB is working with policy makers at all levels to identify ways to achieve the goals of various regulations in more cost-effective ways.
It is not just Millennials who are struggling to buy a home, and it is not just up to builders to make sure that desirable housing is affordable and attainable for all Americans. This will take a team effort. When we all work together, we can put the American Dream back within reach.
Greg Ugalde, CGP, GMB, a Connecticut builder and developer, is NAHB’s 2019 Chairman of the Board. Ugalde is the president and chief legal officer of Torrington-based T&M Building Co., Inc., one of the largest homebuilders in the state. He can be reached at greg.ugalde@TandM.com.