Tight Labor Market Driving Up Construction Costs
Fierce competition for construction workers is driving up wages across the Bay Area as demand for talent far outstrips its availability. The upward spiral in wages is being passed on to consumers in the form of higher housing prices, reports Bloomberg.
Workers are even being poached on construction sites as recruiters from competing companies offer higher wages, says Trumark Cos’ Jeff Peterson. The frenzy for high-quality workers has led to a national rise of 5.8% in construction costs while financing and material costs are flat.
As wages rise, developers are targeting the luxury market to generate adequate returns. The lack of affordable housing is speeding a middle- and lower-class exodus out of San Francisco. [Bloomberg]