Big jobs creating laborer shortage
2,000 workers on one Texas project
DALLAS — When the first Toyota employees start moving into the auto giant’s new North American headquarters in late April, they’ll be setting up shop in a modern marvel.
Yards of poured concrete that would pass 475 football stadiums end to end, 17,000 tons of reinforcing steel — the equivalent of 1,700 city buses. Acres of glass, literal tons of Texas limestone.
But the most impressive part about the project isn’t the materials. It’s not the 7.75- megawatt solar power system or the interior color palette designed to reflect the indigenous Texas environment.
It’s that, in a region where builders are struggling mightily to find construction labor, as many as 2,000 workers are out at the 100- acre suburban Dallas site at a given moment.
Altogether, crews will have crammed more than five centuries’ worth of work into two years.
“It’s the single biggest project we’ve ever done in a single phase,” said Mike Rosamond, executive vice president of KDC, the commercial development firm that’s building the campus. “Toyota set a high- water mark for us.”
Luring Toyota from Southern California was a crowning achievement for North Texas’ economic de-
velopment strategy, which entails recruiting major employers from around the country and abroad.
Toyota’s move has helped propel the Legacy West development it’s part of — the automaker will be joined by luxury apartment towers, a Renaissance hotel and regional offices for JPMorgan Chase and Liberty Mutual insurance — to its status as the largest mixeduse project ever built in North Texas.
Observers say the $ 350 million, 2 million- square- foot Toyota campus marks a turning point for the region not just in economic development terms. It’s also a first- of- its- kind logistical undertaking.
Rosamond said the Toyota campus presented a unique challenge — even for a company that’s been behind many of the biggest, highest- profile developments in the state.
For instance, KDC built a development that includes 2.5 million square feet of offices for State Farm and Raytheon.
But that has been — and is still being — built in phases.
Rosamond said that, despite the bigger scale of the project, the company has been able to adapt.
He highlighted KDC’s good safety rate on the Toyota project, as well as its hiring of more than 30 percent minority contractors.
“I don’t know if I can say [ our processes are] different,” he said. “Just maybe on steroids.”
Still, as development increasingly takes place in huge, mixed- use developments anchored by big corporate employers, experts say such projects are exacerbating a years long construction labor shortage.
That’s true for two reasons: They simultaneously tie up thousands of workers for long stretches of time and drive up demand for the single- family houses that might otherwise be built by those same workers.
Laila Assanie, a business economist with the Dallas Federal Reserve, said D- FW’s construction labor shortage stems, ironically, from the “Texas Miracle” — or the state’s early recovery from the recession.
“The bounce- back from the housing recession was much slower in Texas … compared with the overall Texas job market,” she said.
That was in part because North Texas’ housing market didn’t bounce back as quickly as the overall job market, Assanie said. The shale oil boom also siphoned off North Texas construction workers.
As a result, Assanie said, construction wages have skyrocketed and competition has become fierce.
According to Assanie’s research, inflation- adjusted average wages for Texas’ construction sector climbed 20.3 percent between 2011 and 2016 — roughly four times the 4.7 percent increase in average wages for the U. S. construction sector during that same time. Average hourly earnings for all jobs in Texas grew just 5.9 percent during that time.
Meanwhile, the labor shortage has led to a rise in crews with less experience — which, in turn, can lead to problems with workmanship. And that costs yet more money and time to fix.
“The constant complaint is
that the cost of labor keeps on rising,” Assanie said. “There seems to be no end in sight to it.”
Phil Crone, executive officer of the Dallas Builders Association, said the problem is “worse in Dallas than it is anywhere in the country.”
And Crone, whose group largely includes homebuilders, said projects like Legacy bump single- family homes or remodeling jobs down the totem pole.
“The construction labor force is all of the same pool for a lot of trades — concrete and whatnot are things that are shared throughout residential and commercial,” he said. “A lot of times, these big jobs with big price tags will be prioritized over some of the projects we do.”
Crone said immigration reform, preferably in the form of a viable work visa program, is critical for an industry that relies heavily on immigrants.
“The fear is real in the immigrant community and sometimes perception is reality,” he said. “If they’re scared to … come over here to do some of these jobs, it’s going to make a bad situation worse.”