The residential construction industry continues to experience a labor shortage. According to Bureau of Labor Statistics and National Association of Home Builders (NAHB), there are currently over 200,000 vacant construction positions nationwide. In fact, a recent survey by the NAHB revealed that 70 percent of its members were experiencing delays in completing projects on time due to a shortage of qualified workers, while other jobs were lost altogether.
While the recession took away skilled workers who were unable to find jobs and dropped them out of the industry, younger workers are no longer even considering construction as a viable career option. Cash-strapped high schools have phased out shop classes, and parents have steered graduates to four-year colleges and white-collar careers. Now, as the baby boomers retire, there simply isn’t anyone ready to take their spots.
Building activity is projected to strengthen over the next few years, and the demand for skilled craftsmen is expected to continue to grow. While residential construction activity may have increased significantly since the low point of the recession, many still view this resurgence as weak.
NAHB’s Economics Group analyzed state data about PA’s residential construction labor market. Despite home sales and population growth lower than the national averages, PA gained a healthy 8% in construction wage growth from 2015-2017. In fact, the top earning construction job (Construction Supervisor) can earn upwards of $88,300 annually. The hottest construction labor market in PA? The metro area of Allentown-Bethlehem-Easton is expected to need 8% increased workforce demand.
Help is on the way
PBA’s Endorsed Trade Program has been producing hundreds of skilled residential construction-related workers annually since its inception in 2007. Using the latest NAHB educational guidelines, students who complete PBA-certified programs are then tested and receive their accreditation - providing reassurance to builders and potential employers in PA they are well-prepared for work with a residential construction company in critical fields such as building construction, cabinetry, HVAC, masonry, and plumbing trades. PBA members may review the list of potential employees at www.pabuilders.org/members using their member login information. Further information about the program can be found at www.pbaendorsedtrade.org.
Recent legal actions by Pennsylvania Attorney General Josh Shapiro against 31 home improvement contractors is an inevitable side-effect of the Home Improvement Consumer Protection Act (HICPA). Home improvement contractors who earn more than $5,000 a year are required to register every other year under the law. The list of the 31 cited businesses by the PA Attorney General account for only 0.047% of the over 65,000 contractors registered through HICPA.
While the law has made it easier to find crooked contractors and provides more tools for prosecuting them, PBA offers several recommendations to keep your biggest investment secure when approaching new home construction or renovations:
The Pennsylvania Builders Association – along with your local home builders organization can help you find and hire a reputable contractor in PA. Click here for more info.
To report a fraudulent contractor, contact the Bureau of Consumer Protection at 800.441.2555 or visit the PA Attorney General’s website.
Harrisburg, PA – Governor Tom Wolf today signed House Bill 202, known as Act 6, into law. The bill, sponsored by House Speaker Mike Turzai, amends the Public School Code to allow students in career and technology education (CTE) to demonstrate proficiency and readiness for high school graduation in an alternative pathway, and removes the statutory requirement for the Keystone Exam on that student population.
“Whether they are working and learning in the classroom, in the lab, in the shop, in the field, or in the garage, our young people are always striving and succeeding across a wide variety of fields,” Governor Wolf said. “With this measure, Pennsylvania will recognize that diversity and will no longer hold all students to the standard of a Keystone Examination, which too often doesn’t reflect the reality of a large sector students’ educational experience.”
“We continue to recognize the importance of providing multiple avenues for students to demonstrate educational achievement, especially for students enrolled in career and technical education,” said Speaker Turzai. “This law will ensure our career and technical education system is flexible enough to adapt to the needs of emerging industries, is accountable to ensure every child has a chance to succeed, and is providing robust support for our educators. The bill passed the House and Senate with broad bi-partisan support, and I am very appreciative that the Governor has signed this important legislation into law.”
“With this legislation, we are addressing some simple facts: Our economy is starved for workers with skills in the trades and not every student is best suited for academic education pathways,” said Rep. Mike Tobash. “We recognize that knowledge is valuable and different types of knowledge are important for students, employers and our economy.”
Act 6 implements one of four recommendations made by the Pa. Department of Education (PDE) pursuant to Act 1 of 2016, which paused the Keystone Exam graduation requirement for a period of two years (delayed until the 2018-2019 school year). Specifically, Act 1 required PDE to investigate alternative options for a state level graduation requirement and provide those recommendations to the General Assembly.
The four options for students to demonstrate proficiency and post-secondary readiness are as follows:
Passage and enactment of this bill, which addresses the third recommendation above, supports Governor Wolf’s position that passing a high school exit exam is not the sole valid measure of proficiency and career readiness, and that Pennsylvania should take a more holistic approach by enabling students to demonstrate their knowledge and skills through multiple valid measures.
“We are a commonwealth blessed with a wide variety of career opportunities and industries that our young people must enter if we want to stay competitive in the global economy,” Governor Wolf added. “We want them to be prepared with the necessary skills that employers need in order to allow our industries to thrive, and enable young people to grow their own families right here in Pennsylvania.”
Total housing starts declined in May after a few, strong early months to begin 2017. Total starts were down 5.5%, falling to a 1.092 million seasonally adjusted annual rate, according to the joint data release from the Census Bureau and HUD. Declines were recorded for both single-family and multifamily development.
Single-family starts fell back, declining to a 794,000 annual rate. The February annualized rate, 877,000, was the fastest monthly pace since the Great Recession. Nonetheless, single-family starts are up 7% year-to-date compared to 2016 as limited existing inventory and solid builder confidence make for positive demand conditions.
Single-family permits were down 4.9% in May. There has also been a noticeable increase in the number of single-family homes permitted but not started, consistent with survey data indicating supply-side bottlenecks. For example, in May there were 78,000 single-family homes permitted (on a seasonally adjusted basis) but not started construction. This is almost 15% higher than a year ago.
As measured on a three-month moving average, the data are consistent with recent trends in the NAHB/Wells Fargo measure of single-family builder confidence and NAHB’s forecast of modest single-family construction growth in 2017. The three-month moving average of single-family starts reached a post-recession high in April, and NAHB is forecasting continued growth for the sector as the year progresses. However, due to the strong February number, the rolling average has weakened recently.
Multifamily starts dropped again in May for a fifth consecutive month of decline. Five-plus unit multifamily starts fell 10% to a 284,000 seasonally adjusted annual rate. Multifamily five-plus unit permits were also down, falling 10%. NAHB is forecasting that multifamily development will decline in 2017, although leveling off at elevated levels. The May data indicate that multifamily five-plus unit production is down 5.4% on a year-to-date basis.
With respect to housing’s economic impact, 57% of homes under construction in May were multifamily (612,000). This multifamily count is almost 6% higher than a year ago, although in recent months this total has flattened, consistent with our forecast. There were 455,000 single-family units under construction, a gain of 6% from this time in 2016. This is slightly lower than the April total (457,000), which was a post-recession high.
Regionally, single-family starts declined in the South (-8.9%) and the West (4.9%), the two largest market areas. Single-family starts were up in the Northeast (12.5%) and the Midwest (9.5%).
Homeownership is an important part of the American way of life. Today there are many opportunities in the housing market – including low mortgage rates and new homes that are built to fit your lifestyle – to find a home that is right for you. But market conditions can change, and these opportunities may not be around for long, so home buyers shouldn’t wait.
Low Interest Rates
Today’s low interest rates are helping home buyers find affordable housing options. But, it's important to remember that interest rates are sensitive to market forces and can change quickly. Even a slight rate increase can push monthly payments to the point that a buyer might miss out on their first choice for a new home.
Large Down Payments Not Necessary
While lenders are looking more closely at borrowers today than in recent years, there are options for purchasing your home without a 20% down payment. For example, the Federal Housing Administration (FHA) offers loans to first-time home buyers with down payments as low as 3.5%. However, these loans require mortgage insurance.
To ensure that the process goes smoothly, buyers should consider pre-qualifying for a mortgage and having financing in place before shopping for a new home. Buyers also may find that some home builders have arranged favorable financing for their customers or offer financial incentives.
Built to Fit Your Lifestyle
Designed to accommodate today’s busy lifestyles, new homes – including urban condos and single-family homes – feature open floor plans, flexible spaces, low-maintenance materials, aging-in-place options and other amenities that make them more appealing than ever before.
With energy costs near the top of consumer concerns, it’s good to know that new homes can be more energy efficient than ever. Innovative materials and construction techniques mean that today’s new homes are built to be much more energy efficient than homes constructed a generation ago. In turn, homes are more affordable to operate and sustainable over the long term. And in many areas, prospective home buyers who wish to live in age-qualified communities for those 55 and older will find a large selection of homes tailored to the evolving lifestyles of the baby boom generation.
Benefits for Home Owners
Homeownership also provides important benefits to owners.
Unique tax benefits that apply only to housing help lower the cost of homeownership. mortgage interest and property taxes are deductible. Moreover, for married couples, profits of up to $500,000 on the sale of a principal residence ($250,000 for single taxpayers) are excluded from tax on capital gains.
Leveraging is another advantage of homeownership. A buyer can purchase a home and receive the full benefit of homeownership with a cash down payment that is only a fraction of the total purchase price. This is called leveraging, and it makes the rate of return on a home purchase greater than on other purchases with the same value, such as stocks, where the buyer must put up the entire price.
For most Americans, homeownership is a primary source of net worth and an important step in accumulating personal financial assets over the long term. For most families, home equity represents the largest share of net worth.
Although there are many positive financial aspects to homeownership, a home cannot be valued in monetary terms alone. Not only can homeownership be a stepping stone to greater financial well-being, it provides a permanent place to call home and great personal satisfaction.
Academic research also shows that homeownership provides a wide range of social benefits and strengthens the nation’s people and its communities.
Home ownership is truly a cornerstone of the American dream
The PA State House on June 7 added its approval to a bill that would widen graduation requirements for career and technical education students. The lower House action followed unanimous approval in the Senate.
HB 202, which was sponsored by Speaker of the House Mike Turzai, R-Allegheny, and state Rep. Mike Tobash, R-Schuylkill, would allow students in vocational education programs to demonstrate proficiency on an approved industry-based competency assessment such as exams developed by the National Occupational Competency Testing Institute (NOCTI) or the National Institute for Metalworking Skills (NIMS). The bill is on its way to Gov. Wolf for signature.
Two communities in Pennsylvania were named "Most Family Friendly" according to a report from HomeUnion. In its list, both Horsham, PA (Philadelphia) and Cranberry Township, PA (Pittsburgh) were selected using the most affordable ZIP codes with at least 30 home sales in each metro where the average school rating was at least in the 80th percentile. Median sale prices were determined by looking at single-family homes sold for more than $30,000 in late 2016 and early 2017. Investment properties were not included.
“As home prices continue to increase in many coastal markets, particularly in the western U.S., we are seeing the best opportunities for first-time home buyers with families in the center of the country," said Steve Hovland, director of research for HomeUnion.
Here are the 15 best places for families to live based on housing affordability and school quality:
1. Blue Springs, MO (outside of Kansas City, MO)
2. Tuttle, OK (Oklahoma City)
3. Fenton, MO (St. Louis)
4. Boca Raton, FL (Palm Beach, FL)
5. Aurora, IL (Chicago)
6. Brownsburg, IN (Indianapolis)
7. Broadview Heights, OH (Cleveland)
8. Horsham, PA (Philadelphia)
9. Buford, GA (Atlanta)
10. Powell, OH (Columbus, OH)
11. Katy, TX (Houston)
12. Cranberry Township, PA (Pittsburgh)
13. Summerlin, NV (Las Vegas)
14. St. John's, FL (Jacksonville, FL)
15. Cross Mountain, TX (San Antonio)
Home owners who remodel in 2017 will spend an average of $6,148 on each project, according to NAHB’s recent projections of spending by ZIP code for each of over 26,000 ZIP codes across the United States.
Average spending per improvement will range from under $2,300 to over $22,000.
California, Texas, Florida, New York and Illinois are projected to have the largest total spending by home owners on remodeling projects statewide. Connecticut, Massachusetts, New Jersey, Maryland and the District of Columbia are projected to have the highest spending on remodeling per home.
To determine these by-ZIP code estimates, NAHB looked at the number of homes in the area, the share of those built in the 1960s and 1970s, and owners’ average income and level of education.
You can purchase the datasets on nahb.org to determine how much home owners will spend. For more insights, read the full article in the NAHB Eye on Housing blog from NAHB economist Paul Emrath.
Shea Rochester, who once spent a month in jail on an assault charge that was later dropped, is now wanted in a different way.
After a few months of job hunting, the 32-year-old recently got two offers in the same week. He accepted a $14.48-an-hour position at a Georgia factory that makes shortening and cooking oil.
As U.S. unemployment falls to the lowest level in a decade, driving it beneath what Federal Reserve officials consider is the lowest sustainable rate, people with blemishes on their resumes are getting second looks by employers trying to fill vacancies that currently stand at a near-record 5.7 million.
The stigma of criminal records, as well as erosion of job skills during incarceration, reduced employment of ex-offenders by as many as 1.9 million in 2014, the Center for Economic and Policy Research estimates. While the government doesn’t track jobs for those with arrest records, people are increasingly getting hired, according to economists, companies and government officials interviewed for this article.
“As the job market tightens, employers are being forced to look at the worst hiring prospects who may have seriously flawed applications,” said Gary Burtless, a senior fellow at the Brookings Institution in Washington and a former Labor Department economist.
Homebuilders are recruiting inmates who’ve taken carpentry and plumbing classes at a medium-security prison in Sheridan, Illinois, and are in talks to set up additional programs at facilities in Nevada, Wisconsin, California and Florida. The measures make sense for an industry trying to find an additional 200,000 construction workers.
“We have a huge labor shortage,” said Gerald Howard, chief executive officer of the National Association of Home Builders. “This has become a focus out of necessity.”
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U.S. unemployment fell to 4.4 percent in April, below the 4.7 percent rate that Fed officials view as full employment. That’s a reason the central bank is gradually raising rates this year, even as inflation continues to fall slightly short of its 2 percent goal. Officials expect further hiring will help lift prices and are searching for confirmation that there’s no slack left in the labor market.
The Association of Chamber of Commerce Executives, representing 1,300 business groups, agreed last month with the Council of State Governments Justice Center to provide assistance to chamber members in the hiring of ex-offenders.
While some businesses have been interested in the past, “it becomes even more critical when the labor market is tight not to rule out qualified applicants,” said David Rattray, a Los Angeles chamber executive.
Stigma associated with criminal-justice issues has been a sticking point for millions of Americans during the nearly eight-year expansion. The CEPR estimated there are between 14 million and 15.8 million working-age people with felony convictions. An estimated 70 million have some sort of arrest or conviction record, according to the National Employment Law Project.
The interest in ex-offenders has occurred at a time that the labor market is showing vast improvement for disadvantaged groups who have had historically high rates of unemployment, including minorities, those with little education and those out of work for extended periods.
The data may “indicate some lessening of stigma and more hiring of the formerly incarcerated,” said Alan Barber, director of domestic policy at CEPR in Washington, who co-authored the June 2016 report on the economic costs of incarceration.
High school dropouts are the group that has seen the most improvement in hiring recently. The unemployment rate for those with less than a high school degree fell to 6.5 percent in April from 8.5 percent last September. The rate for those with college degrees hasn’t budged in a year.
Not everyone qualifies for a job. All workers hired are tested for drugs before starting at Butterball Farms Inc., a Grand Rapids, Michigan butter producer. Butterball has brought on 23 ex-offenders this year out of 51 hires for entry-level jobs, about double the number from the same time in 2014, said Bonnie Mroczek, chief talent officer.
“If you just looked at the worst thing about any applicant, you would never hire anyone,” she said, adding the company has a long track record of hiring “returning citizens” who typically have greater loyalty to the company.
Georgia Labor Commissioner Mark Butler, a Republican, says he’s persuaded an agricultural business and fast-food restaurant in south Georgia to hire ex-offenders after the companies were struggling to find people.
Butler recently spoke to a group at a Blairsville, Georgia, prison about to leave the facility, and encouraged them to focus on their “soft skills.” The biggest barriers to those leaving prison are basics like showing up on time, dressing appropriately, working hard, communication and teamwork, he said.
Rochester, the factory worker, says the stigma of a 10-year-old arrest made his job search more challenging this year. He started his hunt after completing a college degree in December following military service.
He landed a position at Stratas Foods LLC after attending a job fair for ex-offenders in Valdosta, a city 230 miles south of Atlanta, where 40 employers took applications.
While happy to have a job, Rochester said he understands many employers view those with any record as “the last place” to hire from. “I feel like it is always a burden,” he said.
Source: ©2017 Bloomberg L.P. All Rights Reserved
An educated shopper is a smart shopper. This especially hold true in the world of hiring and working with contractors to make improvements to your home.
As you interview potential contractors, being able to understand the terminology they use can help you avoid miscommunication and ensure a smoother remodeling experience so you and your family can enjoy your new or updated kitchen, bathroom or room addition even sooner.
Here’s a glossary of some of the common terms used by builders and remodelers to help you understand the language of your remodeling project:
Allowance: A specific dollar amount allocated by a contractor for specified items in a contract for which the brand, model number, color, size or other details are not yet known.
Bid: A proposal to work for a certain amount of money, based on plans and specifications for the project.
Building Permit: A document issued by a governing authority, such as a city or county building department, granting permission to undertake a construction project.
Call-back: An informal term for a return visit by the contractor to repair or replace items the home owner has found to be unsatisfactory or that require service under the warranty.
Certified Graduate Remodeler (CGR): A professional designation program offered through the National Association of Home Builders (NAHB) Remodelers Council™. To attain the CGR designation, a remodeler must take a specified number of continuing education courses and must comply with a strict code of ethics.
Certified Aging-in-Place Specialist (CAPS): The CAPS designation was developed by the National Association of Home Builders and AARP. CAPS professionals have been taught the strategies and techniques to meet the home modification needs of home owners who want to continue living in their homes safely, independently and comfortably, regardless of age or ability level. CAPS graduates pledge to uphold a code of ethics and are required to maintain their designation by attending education programs and participating in community service.
Change Order: Written authorization to the contractor to make a change or addition to the work described in the original contract. The change order should reflect any changes in cost.
Cost-plus Contract: A contract between a contractor and home owner based on the accrued cost of labor and materials plus a percentage for profit and overhead — also known as a time-and-materials contract.
Draw: A designated payment that is "drawn" from the total project budget to pay for services completed to date. A draw schedule typically is established in the contract.
Lien Release: A document that voids the legal right of a contractor, subcontractor or supplier to place a lien against your property. A lien release assures you that the remodeler has paid subcontractors and suppliers in full for labor and materials.
Mechanic’s Lien: A lien obtained by an unpaid subcontractor or supplier through the courts. When enforced, real property — such as your home — can be sold to pay the subcontractor or supplier. If a subcontractor or supplier signed a lien release, then this lien cannot be enforced.
Plans and Specifications: Drawings for the project, and a detailed list or description of the known products, materials, quantities and finishes to be used.
Punch List: A list of work items to be completed or corrected by the contractor, typically near or at the end of a project.
Subcontractor: A person or company hired directly by the contractor to perform specialized work at the job site — sometimes referred to as a trade contractor.
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