Booming Austin construction sector short of workers

At a time when construction cranes have become emblematic of the Austin skyline, it might be logical to conclude that the city's building boom is as hot as it can get.

But the supply of workers skilled in construction trades is stretched so thin locally that projects are being delayed, prices are rising and, potentially at least, quality is suffering, according to a number of Austin experts.

"It's going to take longer (to complete projects), it's going to cost more, and the quality is going to be worse. I think that's kind of where we are," said Joe Basham, a lawyer specializing in construction law. "I do think that there will be some (quality) issues that will manifest itself later on because of this."

Speaking during an Urban Land Institute event Wednesday in downtown Austin, Basham and others said the shortage is being exacerbated by a number of factors, including high housing costs in Austin that have priced some workers out of the area, an extremely tight local labor market that has resulted in heated competition for many categories of employees, and not enough educational focus on skilled trades.

"This is the toughest (hiring) market I have seen in 35 years" in the Central Texas construction industry, said David Stauch, managing principal at consulting firm Capital Project Management. He said it also is the busiest construction market, in terms of number and size of projects, that he has witnessed over that time.

Austin isn't the only city experiencing a shortage of construction workers. More than three-fourths of Texas construction firms, and 80% nationwide, have reported having trouble hiring the workers they need, according to a study last September by the Associated General Contractors of America and Autodesk.

But the booming Austin-area economy and the sheer number of construction projects underway in the region have made the issue particularly noteworthy locally. The unemployment rate for the Austin metro area registered 2.2% last month — a 20-year low for the month of May — according to figures from the Texas Workforce Commission.

Justin Huling, an executive at construction company American Constructors, said commercial projects in the city on average are taking 20% to 25% longer to complete because of the difficulty in finding workers.

"In the past, you have been able to accelerate projects — add more manpower, work overtime, work multiple shifts" if needed, Huling said. "But right now, the labor pool is not there to do that. You can ask a subcontractor to put in extra hours or add more manpower to a project, (but) it's just not there. They can't even go and hire the workforce to be able to do that. And you can't throw money at it, either."

Sheri Blattel, who heads the Austin office of CTA Architects Engineers, said many people left her profession during a downturn a decade ago and haven't returned, leaving a dearth of professionals able to guide new entrants.

"The midlevel talent is missing," Blattel said. "We are really struggling (to find) that group that can mentor" students interested in the field.

She and other participants in Wednesday's event offered a number of potential solutions — including increased outreach to high school and college students and more internships and hands-on training — although they acknowledged that such efforts are unlikely to provide immediate relief.

"I'm going to say it's going to take at least five years," Stauch said.

Basham, a partner at law firm Allensworth & Porter, said immigration reform to allow more legal foreign workers into the United States would help.

"You can't have a conversation about workforce or labor shortages in this market and not talk about having some form of legal immigration into this country," he said. "It can't be chaotic — it has got to be thoughtful and done right. But I think it has got to be on the table."

Regardless of how and when Austin's labor shortage eventually is resolved, Basham said he thinks quality has been suffering because demand for skilled workers is far outstripping supply.

"My sense is that the economy — sort of the velocity of money in this economy — is papering over a lot of problems," Basham said.