No Houses And No One To Build Them: Inside The Local Construction Labor Gap

“Traverse City needs more housing” has been a common refrain lately, from public meetings to social media posts. But building the region’s housing stock isn’t possible without the construction trades, and shortages on that front continue to pose massive challenges as the region grows.

Just how big is the construction worker shortage? On a national level, statistics from Associated Builders and Contractors (ABC) show the industry is already facing a shortfall of 650,000 skilled workers in 2022. On top of that figure, Dan Goodchild, interim director of the technical academic area at Northwestern Michigan College (NMC), says some 50 percent of the existing construction trades workforce is nearing retirement age and is likely to exit the industry “within the next 5-10 years.” 

The problem has been building for years, especially locally. “I was working as an electrician back in 2007 when we had that huge market crash in the housing industry,” Goodchild recalls. “And since then, we've never recovered the manpower we lost during that time. Tens of thousands of people just left the state, and most of them were out of the construction and automotive industries.”

Bob O’Hara, outgoing executive officer of the Home Builders Association of the Grand Traverse Area, concurs, noting that the state “lost as much as 40 percent of the [construction trades] workforce” during the Great Recession.

At the same time, Goodchild says the United States as a whole has not done a good job of filling the funnel with the next generation of construction workers.

“Growing up, I remember I had a shop class in fifth or sixth grade,” Goodchild tells The Ticker. “Then it was probably in the ‘80s or so that those classes started fading away. Now, we’ve got 20-30 years where trades have not even been mentioned to lots of kids.”

For Colin Bushong, owner of the TC-based CMB Construction, the lack of younger workers – and the growing number of professionals aging out of the industry – has led to significant hiring challenges. When seeking new members for his core team, Bushong says he’s only had “a 10 percent success rate in finding somebody that’s going to stick with us long term.” Most of the skilled construction workers in the region, he explains, are already happily employed elsewhere.

When hiring subcontractors for specific projects, meanwhile, Bushong has observed the aging workforce problem firsthand. “From a carpentry standpoint, which are the direct trades I hire most regularly, there does not appear to be a lot of people below the age of approximately 40, with 50 being a typical skilled carpenter age. And at 50, being a skilled carpenter, you're really starting to age out of that career. It's very physical, it's hard for your body to do that. And typically, people still in carpentry at that age are starting to think about their next phase.”

Collectively, Bushong says labor challenges have made it difficult for CMB to expand its bandwidth to meet skyrocketing local demand. Spread that same situation out among every local builder and you see the problem: massive demand for more housing, scarcity of skilled construction services, rising building costs, and entire demographics priced out of the market.

“The cost of building is getting to a point where it's outpacing the working class,” Bushong admits. “It's people that have extraordinary means that are keeping it going right now – albeit, I'm seeing a large influx of people with means that are very abnormal for our area. And then, at the same time, you have this perfect storm of not enough people in the construction trades to handle even that work. I would say every builder in our area right now is probably functioning at over 100 percent capacity on any given day, and that will probably continue to be the normal for a long span of time.”

In O’Hara’s mind, there are two paths forward to give local builders some relief: Build enough housing units to satisfy the demand, or bring enough new workers to the industry to fill the labor gap.

On the former front, O’Hara points to a joint 2019 study from Housing North and Networks Northwest, which found that the 10-county northwest Lower Michigan region could “support an additional 15,540 housing units through 2025.”

“Right now, we're building maybe 1,500 a year,” O’Hara says. “It's going to take us 10-15 years to fill that gap. And that doesn't account for deterioration of the current stock.”

As for filling the labor gap, Goodchild and Bushong agree that doing so is effectively impossible, given the sheer size of the current and projected shortfall. They say the goal should be to keep the industry moving in the near term – and hopefully achieve some incremental gains in the long term. The only way to do that, Goodchild says, is to get more young people interested in the construction trades.

Northern Michigan has numerous efforts already underway to start exposing kids to the trades at a young age. Goodchild says NMC is “going on year eight” of an annual event that tours local eighth, ninth, and tenth graders through the college’s construction trades facility.

“We set up a hands-on career exploration event in each of our areas for kids to get exposure,” he explains. “They have an opportunity to actually hold and use a nail gun, or to swing a hammer. Team Elmer’s comes out with their mini excavators and the kids actually get to use those. We solder some copper pipe with them in the plumbing area, and they get to wire up some devices in the electrical area. So they all get this hands-on exposure to each of the trades that we offer here at NMC, just so we can try to start generating some awareness and building that pipeline of the younger kids coming up and give them an idea of what they could do.”

While Bushong acknowledges that getting today’s middle and high schoolers interested in construction won’t necessarily help address the immediate shortage of both workers and new housing projects, he’s adamant that it’s a much better option than the alternative.

“For me, it's not a question of whether we can fill the gap,” Bushong says. “It's a question of what happens if we don't even try. We’ve got a real train wreck coming if nothing happens. We’ll have our aging workforce that will have worked themselves out of the industry, and we will have virtually no one with the skills to put these things together. If we do our best and fall short, the problem is still going to continue to grow, but it's not going to be the train wreck that will happen if we simply wait for that day to come.”