Shortages of Home Builders and Tradespeople

Editor’s Note: We will be publishing selected editions of the Herman Trend Alert here at Small Business Trends. The first one follows. You may have heard economists debating whether we are in a real estate bubble in the United States. This week’s edition looks at the other side of the superheated real estate market: the shortage of home builders and skilled tradespeople, and the impact on the economy.

Herman Trend Alert

Small and mid-sized communities strive to improve their economic strength by attracting new employers. Those companies bring jobs that need people who are educated, trained, and ready to work. If those workers are available, everybody wins. If people are available, but not qualified, the community and the company must find resources to train them to do the work. With our growing global economy, many communities are fortunate to have existing companies expanding. Existing employers also feel the same need for increasing numbers of qualified employees.

These communities increasingly face another problem. Without sufficient housing, it is difficult for employers to recruit the people they want to hire. If people can’t find a decent, affordable place to live, close enough to their workplace, they will not accept the job offer. In addition, the increasing cost of fuel limits how far people will want to commute to work. As commuting costs force workers to find jobs closer to home, many employers are already experiencing increased employee turnover.

We are hearing from economic developers and employers reporting that they have more jobs than people. The availability of affordable housing to attract manufacturing workers is starting to become an issue. The housing that is being built is too expensive for the market, but these communities can not attract developers to build what is needed.

Where’s the problem? The demand for home builders far exceeds the supply. (Emphasis added.) Contractors can not recruit and hire enough skilled tradespeople to do the carpentry, plumbing, electrical, and other construction work that is involved in building houses. Because of building needs in the storm-damaged gulf region and in burgeoning China, construction materials are in short supply.

Smaller cities and independent communities in Missouri, Colorado, and other states are facing the housing challenge. Resort areas across the country are searching for ways to offer incentives to builders to provide affordable housing. When community leaders understand the linkage between affordable housing and available workforce, they seek solutions as varied as special tax levies to attract developers, establishing housing authorities enabling governments to build, and charitable foundations offering housing on a non-profit basis.

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Reproduced with permission. From “Herman Trend Alert,” by Roger Herman and Joyce Gioia, Strategic Business Futurists, copyright 2006. (800) 227-3566 or

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.