A building challenge: Contractors, home builders struggle with labor shortage

Apparently, David Sinkey isn’t averse to a bit of a challenge.

With about 12 different residential communities under construction in the northern Front Range, the CEO and president of Boulder Creek Neighborhoods figures on upping the number homes built this year from about 197 to about 240. This in the face of one of the most dramatic construction labor shortages Colorado has ever faced.

“We grow between 15 and 40 percent every year,” said the head of a residential building firm that specializes in low-maintenance housing. “We’re able to meet our quality and schedule expectations, though it takes more management and an extended schedule to get it done the way we want it done.”

Across the board, residential and commercial builders alike are dealing with a severe construction labor shortage, which is most poignant in Colorado among skilled workers. Various sources see the overall construction unemployment numbers for the state as ranking in the top four industries — perhaps even No. 1 — in terms of the tightness of the labor market, contributing to overall unemployment numbers as low as 2.4 percent.

In Fort Collins, Doug Dohn, president of Dohn Construction Inc., said for commercial projects, the situation has gotten tight, with contractors necessary to keep buildings on schedule, especially framers, plumbers and drywall contractors who work with steel studs.

“There for a while, everyone was moving from one plumbing company to another — doing the same work for a higher wage — so it was tough on the subcontractors to keep their crews together,” Dohn said. “But a lot of the shifting around has slowed down and improved.”

Still, Dohn and other commercial contractors said there are few competitive bids out there — especially in certain fields, such as drywall. Another problem in Colorado is the lack of affordable housing.

“Even though there the labor market is tight everywhere, neighboring states have higher unemployment than we do,” he said. “Before, in a typical scenario, a drywaller (from out of state) would see the per-foot price and figure they could make some good money. Now that housing costs are so much higher, they end up not taking the work because they can’t do it for that price.”

Over the winter, Dohn has also been busy with apartments, from low- to high-income and student housing, such as Prospect Station in Fort Collins. His company typically has 60 people on salary throughout the year, but now he is ramping up for upcoming projects in Fort Collins, Windsor, Greeley, Boulder and Estes Park.

“We’re definitely selecting our work realizing that our subcontractor pool can only do so much. They still struggle to man the crews,” Dohn said. “We don’t want expectations or commitments that we can’t keep.”

In Longmont, Golden Triangle president Brian Laartz agreed that positions are not being filled by out-of-state craftspeople.

“There’s not going to be an easy way out of it,” Laartz said. “With my involvement in in the AGC (Association of General Contractors) we’ve been working hard with recruiting from both high schools and the under-employed. It’s got a long way to go. It’s just going to be a while.”

Golden Triangle had about $18 million in commercial projects in Louisville’s Colorado Technology Center lined up at the beginning of the year, along with $35 million in major educational projects in Northern Colorado and $16 million in other major projects. Those were just the major projects, and Laartz said there has been a major management effort to keep crews moving forward.

“Having a lot of good work is always a good problem to have,” he said “It’s better than not having good work on hand.”

Acknowledging the lack of affordable housing, especially in condos, Laartz said he believes that the construction industry is just heated up all around the country. While there are some available workers from oil-dependent states such as Wyoming and New Mexico, those states also have construction work available.

“We try very hard to match our resources to the projects before us, and concentrate on working with our subcontractors to make sure we really plan their work to be as efficient as possible,” he said.

“We have not moved back our schedules. We’ve done a good job planning and managing our resources, though maybe we’ve turned down work to make sure we don’t overreach our resources.”

Both Laartz and Dohn said their standing with subcontractors is an important element in keeping projects moving. While some competitive bidding may have gone out the window, having established relationships are important in such times, they said.

At Roche Constructors in Greeley, Director of Preconstruction A.J. Roche said work is proceeding, but large projects have become more interesting from a planning aspect.

“We do have issues with the skilled trades, at least,” he said in a previous article.

While commercial projects are often thought of as requiring more skilled labor, Sinkey said that often isn’t the case with Boulder Creek neighborhoods.

“I think it’s a factor for us, especially because we try and specialize in maybe more complicated construction,” Sinkey said. “We’re looking for more diversity in architecture and more complication in structure, so we’re looking for a more skilled level of trade in our trade partners, and that’s increasingly less abundant.”

Sinkey also noted that maintaining a good working relationship with subcontractors — or as he called them “trade partners” — is increasingly important.

“We’ve worked really hard for years to maintain good relationships with our trade partners,” he said. “We try to be the first choice. Good relationships mean we can all in favors to get people to move things around, but we get there with good payment terms and reasonable expectations.

“But we also keep clear and reasonable expectations with our home buyers. We built every house we thought we were going to build last year. We did not miss a closing or close on an unfinished home.”

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