Home rebuilding will be painfully slow -- and costly
With floodwaters nearing knee height, Arlene Estle fled to the upstairs of the Houston house where she has lived for 50 years and raised four children. It was many hours later before her son-in-law arrived by boat to rescue her.
Her flooded home didn't fare so well. It could be a year, her contractor warned her, before she can return. Until then, she'll have to find some place to rent.
"I'm going to be 83," Estle said one recent morning as her daughter and housekeeper helped try to disinfect her belongings. "This is just a life-changing thing for me to face with making so many decisions. It's just overwhelming."
Estle is among the fortunate ones. She has flood insurance and a longtime contractor who can start work soon. Most victims of Harvey have neither. They'll be spending months struggling to assess damage, navigate federal assistance and apply for loans. Then, victims will have to compete for contractors who have already put prospective clients on waiting lists.
All told, it could take years for some people to rebuild, if they can do it at all. The same could be true of many victims of Hurricane Irma, which caused its own catastrophic damage in Florida, though less than initially feared.
For anyone who needs to repair or rebuild a home or business, the back-to-back hurricanes coincided with a national shortage of carpenters, electricians, drywall installers and other skilled workers. Many construction workers left the industry after the housing bubble burst a decade ago and haven't returned.
With fewer younger workers entering the business, the average age of some construction trades has reached well into middle age. The construction sector recorded 255,000 unfilled jobs in June, according to the National Association of Home Builders.
On top of the worker shortage, homeowners will pay elevated prices for materials, which had already been rising this year.
"The labor shortage is going to make this take longer, but more importantly, it's going to be more expensive than people think because labor rates are going to go up dramatically," said John Burns, CEO of John Burns Real Estate Consulting, a housing industry research firm.
Few construction companies outside Texas and Florida are eager or equipped to travel there to handle rebuilding. Most are already busy on work closer to home.
"Why would I take a chance on going to Florida or the Gulf Coast for temporary work, where I might not be able to find housing, when I can find steady employment here and now?" said Ken Simonson, chief economist for the Associated General Contractors of America.
In Texas, Harvey compounded a heavy demand for housing. Texas had been on pace for 30,000 housing starts in 2017. Now, an estimated 200,000 more homes suddenly need to be repaired or rebuilt. Construction projects were already taking one or two months longer than usual, said Scott Norman of the Texas Association of Builders.
Nearly 70 percent of Texas contractors had trouble finding concrete workers, electricians, cement masons and carpenters, according to a survey of construction firms that the Associated General Contractors of America conducted in July. Texas has long struggled to replenish its aging construction workforce. The average age of a master electrician in Texas is 59. For plumbers, it's 62.
Stephen McNiel of Creative Property Restoration, a remodeling firm in Houston, received calls from seven flood victims on the day he visited longtime client whose recently restored home had been ruined by Harvey. One came from a woman who had phoned dozens of contractors. All warned her it would be months before they could take on additional work.
"There is a tremendous amount of demand -- far more than I'm capable of handling and than everyone I know in my industry is capable of handling," McNiel said.
McNiel said he could use 50 percent more workers but is struggling to find subcontractors. He said he worries that the shortage of skilled labor is being exacerbated by a perceived suspicion of immigrants under President Donald Trump.
"The reality of my industry is that most of the work gets done by immigrants," McNiel said.
Simonson noted Trump's decision to phase out the Deferred Action for Childhood Arrivals program, which grants a reprieve from deportation to nearly 800,000 immigrants brought to the U.S. as children.
"Texas, more than ever, needs people with construction skills from any country," he said.
Victims of the storms can first expect delays in having their property assessed for damage by insurance adjusters. Then, securing financing will become a challenge. Flood insurance coverage has declined in both Texas and Florida as premiums have risen. Many homeowners will have to go into debt or dig into savings to make repairs -- or sell their properties.
For homes that have sat the longest in feet-deep water, drywall and insulation will need to be stripped down to studs and dried. Then everything from wooden flooring to electrical systems and interior doors must be rebuilt.
Mary and Duane Hendricks, retirees who live a few streets from Estle, have decided to give up on their home, now flooded for the second time in two years. They still face a prolonged repair process in hopes of selling it. The Hendrickses have begun removing Sheetrock and flooring to prevent mold.
Two years ago, they tried to live in their home while it was being repaired for flood damage and ended up moving out after three months. This time, they arranged a rental even before the hurricane hit. If they can't sell, they'll just walk away from the home they bought in 1971, where they raised two children and built a sunroom where they taught yoga in retirement.
"We cannot go back," said Mary Hendricks. "It's a beautiful home, and we've had it for years and we've done a lot of work on it. That's the heartbreaking part."
In Florida, the magnitude of damage from Irma is still coming into focus. But the widespread flooding means Florida will have to compete with Texas for many of the same materials and laborers. Irma spread its destruction over a vast territory, covering all of Florida and causing major damage to Georgia as well.
"It isn't just a few counties -- it did damage in county after county," said Douglas Buck of the Florida Home Builders Association. "That's going to make it more difficult for contractors and builders to go where the problem is and help rebuild communities."
In Houston, Estle's contractor, Dan Bawden, urged her to seek a yearlong rental while her house gets fixed. Bawden foresees months of delays in obtaining drywall, interior doors, siding, trim moldings, ceramic tile, cabinets and plywood.
Even before the storm hit, his remodeling firm had a six-month backlog of projects. Now, with eight full-time employees, he's "overwhelmed with more calls coming in that we can respond to." Prospective clients must get on a waiting list.
As Harvey approached, Bawden rushed to secure his network of 60 contractors, knowing they would soon be pulled in different directions. He worries that six months from now, "they are going to want to charge more or go work for someone else."
Florida is no more equipped than Texas to handle a surge of construction demand. Miami still hasn't recovered all the construction jobs lost in the recession. The metro area, which also includes Fort Lauderdale and West Palm Beach, had 130,000 construction workers in August, compared with 168,000 in 2006.
"In our economy, money talks," Simonson said. "People who have the most urgent need in some cases will be able to buy their way to the front of the line."
