Rebuilding after Harvey to be slow and costly
For Houston after Harvey, the costs of labor and materials are soaring
Many Houstonians
Many Houstonians are facing sticker shock and delays as they rebuild their homes and lives after Harvey because the costs of labor and materials are soaring with demand.
“There will be a lot of patience required with such an influx of construction demand,” said Casey Morgan, president of the Greater Houston Builders Association. “I think that’s hard, obviously, for homeowners to hear.”
It was indeed difficult for Nena Lamb and her husband to hear. They were quoted $5,500 last month to have new drywall hung inside their floodravaged home in Webster.
When the work was finished, the Lambs found out they were on the hook for $7,567. The blown budget caught the paralegal and IT professional by surprise as they began restoring their three-bedroom, two-bathroom ranch, which took on nearly a foot of water during the storm.
“I can understand going over $500 or even $1,000, but we weren’t budgeting an extra $2,000,” Lamb said.
With more than 136,000 homes damaged by Harvey in Harris County alone, contractors have been in high demand. Thumbtack, a San Francisco-based company that connects
homeowners with contractors, saw a 121 percent increase in online requests for general contractors, handymen, roofers and flooring professionals during the two months after Harvey.
Stephen McNiel of Creative Property Restoration has experienced brisk business since Harvey. The Houston-based home remodeler typically completes 40 projects a year. Over the next 12 months, McNiel expects to take on 50 projects.
“The construction industry is trying to absorb this as much as they can to get people back in homes, but it’s going to be slow and hard,” McNiel said.
The sudden increase in contractor demand has caused labor prices to skyrocket.
Hourly rates for construction workers rose on average 7.2 percent from September to November, according to Xactware. Siding installers saw the biggest wage increase, 19.3 percent; followed by drywall installers, 11.8 percent; demolition labor, 11.2 percent; and carpenters, 11 percent; according to the Utah-based construction technology firm.
Material costs have risen by a more moderate 1.6 percent, Xactware said.
Most building suppliers, including Home Depot and Lowe’s, sent truckloads of goods to Houston for Harvey, which was the first of three major hurricanes to hit the U.S. this year.
Lumber prices have shot up the most, but that’s primarily because of a new tariff on Canadian softwood lumber, said Ken Simonson, chief economist with the Associated General Contractors of America.
“In general, there’s more supply and less demand for materials globally, so we haven’t seen a shortage,” Simonson said. “Supply and logistics chains have gotten better, so there was a lot of pre-positioning of goods done in the Houston area. ”
The ongoing construction labor shortage has meant bidding wars for subcontractors, like drywall installers and painters. Those rising subcontractor costs are being passed on to consumers.
“My drywall and painting guys are just in high demand, they can charge more,” McNiel said. “There’s plenty of work. If you don’t say yes, then someone else will.”
Renovation and remodeling crews are stretched thin as they rush to finish as many jobs as they can. Some companies are split- ting their crews among many projects, taking a scattershot approach to the demand.
“Instead of having a group of 10 working on a project, it could be cut in half,” Morgan said. “There’s some concern seeing fewer people on projects.”
Contractors are hiring more workers to fill the demand, but some of these new hires are inexperienced, McNiel said.
“It’s hard to find good quality people, and Harvey has made it worse,” McNiel said. “We’ve gotten into situations where we need a few extra hands, but it can be a real roll of the dice. All of the good people are really busy.”
The Lambs discovered first-hand how difficult it could be to find a contractor. The couple reached out to several contractors by email, then by phone when they realized contractors were ignoring the deluge of emails from hundreds of homeowners. It eventually took two weeks to get three contractors out to look at their home.
“That part was aggravating,” Lamb said. “They seem all gung-ho on the phone, but then it would take forever to get them to come out.”
After paying for new drywall and cabinets, the Lambs realized they have exhausted their federal disaster relief dollars.
Now, the couple is tackling the remaining renovations on their own, pulling funds from limited savings.
The Lambs hope to have their house rebuilt by February, renovating after work and on weekends. Nena Lamb’s father is helping out. As a veteran, he has been able to take advantage of Lowe’s 10 percent veterans discount on their behalf, Lamb said.
“The 10 percent doesn’t seem like a lot, but it adds up,” Lamb said. “You’ve got to make your dollars stretch.”