Large Homebuilder Pulls Out of North Bay Rebuilt Effort

We recently discussed how record low unemployment across the Bay Area combined with a severe housing shortage could create unexpected challenges for the region, especially as relates to achieving ambitious policy goals that involve significantly increasing housing-related construction activity. Late last week brought unfortunate confirmation of the broader dynamics involved here, with news that a large homebuilder was pulling out of plans to rebuild homes lost during the North Bay wildfires. 

The reason? Financial feasibility concerns driven by a "general labor shortage in home construction" and – in particular – a lack of local framers. From the Press Democrat:

“Our fear is that this is a bellwether of the way things are going to go,” [said Jeff Okrepkie, chairman of the Coffey Strong neighborhood rebuilding group].

“It’s not a small guy from Clovis or something that wanted to get in and build some houses. It’s a large builder from the Bay Area that’s already building in Sonoma County. [DeNova Homes] have access to subcontractors and they still couldn’t convince enough labor to come up and build in Santa Rosa to make it financially feasible.”

Okrepkie said that aside from a general labor shortage in home construction, the lack of local framers could be a deep setback for the county’s rebuilding efforts. He said framers have plenty of work in their own communities, including Central Valley communities such as Fairfield.

“There are just not that many of them in Santa Rosa so you have to pull from other areas,” he said.

Lindsay Owen, DeNova’s entitlement manager, said in an email the company simply could not “secure all of the assurances we need to move forward immediately with a rebuilding program, and we would never want to make promises that we couldn’t keep.

“The framers are always a key player in any project,” she said. “As of right now, it is constantly a struggle to have enough of them to support the day-to-day construction industry, aside from the rebuild efforts....”

.... Okrepkie said he hopes other builders don’t run into the same labor troubles with their subcontractors and materials suppliers.

“It scares me seeing the size of a DeNova — the size and scale of what they could accomplish — and they still couldn’t make it a reality,” he said.

As noted in the original blog post, figuring out how to navigate all the various components of the region's housing crisis will be one of the primary aims of CASA – The Committee to House the Bay Area, which was convened by MTC and ABAG and brings together leaders from across. CASA's most recent Technical Committee meeting, in fact, featured an extended discussion of these very labor and workforce dynamics, with takeaways that increasing the construction workforce and improving construction productivity must be a part of any overall framework of housing strategies that CASA ultimately recommends.