TEXAS & SAN FRANCISCO: A Run on Subcontractors
A lack of subcontractors is becoming a growing challenge. In Texas, the best ones are working on other projects, while other subcontractors are having their workforce stolen from the hot Eagle Ford Shale industry, reports Jordan Foster's John Riggins (here with his family at a Rangers game). So subcontractors are increasing prices because they have a backlog of jobs and don't have to be as aggressive in chasing jobs as in the past (during the downturn, many skilled laborers exited the industry). We heard the same problem at our San Francisco Multifamily Summit yesterday, where Swinerton Builder's Steve Johnson says a larger labor force is needed in a city where up to 40 cranes are swinging. He counted $25B of construction in the Bay Area that's underway or ready to start.