Constra Costa Times Sunday August 10, 1997 Business Section page D1
Construction Crunch
Contractors are desperately seeking workers in Bay Area building boom
By Jessica ouynn
Many are desperately trying to find enough welders, framers, carpenters, electricians and plumbers to finish housing and commercial projects on schedule.
All the contractors are scrambling to find good people and get organized so they can service everybody's needs," said Mike Semas, vice president of construction at Blackpointe Homes in Walnut Creek.
Some East Bay builders say the labor shortage has driven up construction costs by as much as $500 a home and delayed housing projects by as long as a month.
"I had one man who said, 'I can't stand living with my relatives any more. Please finish my house!" said Frank Adams, vice president of construction for Warmington Homes, which is building 182 houses in Contra Costa County. "We've had peopl who had to live in motor homes who want to get into their new house."
The shortage has also delayed dozens of office and industrial projects as commercial contractors wait for tradespeople to become available. In some cases, the competition for workers has prompted some subcondractors to abandon construction sites in the middle of the job.
"We had one situation where a subcontractor offered more money, and the entire crew left and went with that company," said Mark Miller, senior project manager for Turner Construction Co. in San Francisco, which is building PeopleSoft Inc.'s new $40 million corporate headquarters in Pleasanton. "We've had to slow down on the job."
The problem is by no means restricted to the Bay Area. All across the state, both home and commercia builders have been shorthanded it almost all of the skilled trades-from carpenters and framers to welders and electricians. And it's orgy going to get worse, building experts say.
Unemployment is at an all-time low, about 4.3 percent in Contra Costa County and 4.6 percent in Alameda County, according to the state Employment Development Department. Although the EDD does not compile separate statistics on the construction industry, a state spokeswoman said jobs have been difficult to fill because of the shortage.
The Construction Industry Research Board, which tracks building trends throughout the state, reported a sharp jump in housing and commercial construction for the first six months of this year. In fact, building is at a five-year high in Contra Costa County, according to the research board.
The dollar value of office building construction jumped 47.3 percent to $43.7 million compared with only $29.7 million during the same period last year.
About $581 million of new homes were built during the first half of this year, up 35 percent over 1996. The number of new houses, condos and apartments also jumped to 1,885 from 1,729 last year.
In 1989, the last time the Bay Area experienced a labor shortage, other parts of the country were experiencing a recession. But now, other states are also experiencing a construction boom and workers are unwilling to relocate to the Bay Area, said Adams, the vice president of construction at Warmington Homes.
Until we begin to get migration of competent trade people from other marketplaces, I don't see how it can get better," he added.
East Bay builders also blame other Bay Area counties for siphoning laborers from their work sites.
Some long-term public works projects, such as the reconstruction of the Cypress Freeway in Oakland and a project to build the new San Francisco international terminal could tie up thousands of workers over the life of the project.
David Ogilvie, a vice president at Herrick Corp., a Pleasanton-based steel contractor, said the company has experienced minor delays in finding workers for some jobs.
"lf you're a worker, and you think, 'I can go and have guaranteed work for two years or more at the airport ... I'm going to go where the work is.' That's just human nature," Ogilvie said. "There's nothing of that mag- nitude being built" in Contra Costa County.
The labor shortage problem began about two years ago when the region began to see an economic recovery. Businesses began expanding and building new offices again and new housing for the accompanying work force had to be built.
The industry that only seven years ago had to lay off construction crews in droves was suddenly scrambling to find skilled workers. But contractors discovered many of the unemployed laborers had already relocated out of state or abandoned construction to work in other, more stable industries.
Now that construction is again on an upsurge, the ano trades needed" signs that used to be plastered at construction sites are being replaced with banners desperately advertising job openings-openings that are increasingly hard to fill.
John Robinson, executive director for Associated Builders and Contractors, which represents about 900 commercial find industrial builders in the Bay Area, said the problem is so widespread, some contractors have to advertise out of state to find highly skilled trades.
Builders also face competition keeping high-level construction man- agers on board. Some veteran superintendents and construction executives are jumping to rival builders for more money, one builder said.
"I have one superintendent who worked for me for the last five years ... go to greener pastures," said Randy Smith, co-owner of Harold W. Smith Co., a custom-home builder in Walnut Creek. "He expects to earn considerably larger salary than he did here."
Home builders say the unstable labor pool has forced some contractors to pay more in overtime costs to keep a crew on the job. The added expense is passed on to clients, but in some cases, contractors are just absorbing the costs.
"I can't call the people who bought the house from me and say, 'Hey, you have to cut me and check for $500,' " said Adam Warmington Homes "we're trapped in the center."
Bob Noble, vice president of operations for Kaufman & Broad, which is building about 550 homes in Contra Costa and Alameda counties, said the company lost two to three weeks on one housing project in Livermore because the plumbing crew didn't have enough people to finish the job. None of those overtime costs, which the company has not yet tallied, will be passed onto the buyer, he said.
"It did cost a fair amount of money," he said. "We're just going to let it go."