9
Sep

Rebuilding after Hurricane Harvey to create construction ripples locally – Waco Tribune-Herald

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The ripples of Hurricane Harvey’s devastation are not likely to stop along the Gulf Coast, with some economists and contractors saying it may dump salty water, at least short-term, on the state’s booming homebuilding industry, including in Waco.

Manpower and materials bound for coastal cities could create shortages locally, delaying the completion of homes or the launch of subdivisions, but most observers stop short of predicting doom for Greater Waco’s economic momentum that, like Hurricane Harvey, is historic.

“The Texas housing market has been leading the nation for years, with Houston charging until the downturn in oil and Dallas-Fort Worth moving ahead the past couple of years,” said Scott Norman, executive director of the Texas Association of Builders. “We already had labor shortages across the board involving masons, carpenters, electricians, you name it, creating month- to two-month delays in completing the typical single-family home.

“Now we have Hurricane Harvey, and the challenge gets that much worse. We already were seeing lumber and cement prices going up before the storm. Now we can only imagine the shortages.”

Increases in fuel prices will also be a factor, especially for bulky construction materials, Norman said.

The bottom line is that booming markets such as Waco, “which is a microcosm of what is going on statewide,” undoubtedly will feel the pinch, Norman said.

Hurricane Irma and its potential disruption of Florida’s healthy housing market “represents a double whammy,” he said.

Taylor Gross, 32, a member of the family that founded Gross-Yowell building materials in Waco just after World War II, said he grew up in the area and has seen nothing like the ongoing homebuilding bonanza.

Gross said he already has seen the price of lumber climb to a 14-year high since the start of summer because of new tariffs on wood from Canada.

More recently, in the wake of Hurricane Harvey, wafer board used to form exterior walls and for roof decking, has seen a 6 percent price surge at Gross-Yowell, largely because of panic buying ahead of Irma, Gross said.

Scott Bland, president of the Heart of Texas Builders Association, said his biggest concern involves the potential shortage of laborers. Local builders already complain about problems finding quality help, and the potential draw of work on the Gulf Coast could siphon away prospects, Bland said.

The availability of heavy equipment might also suffer, though he is less concerned about spikes in material prices, he said. Irma could change that.

“I’ve talked with suppliers of Sheetrock and other supplies, and they don’t necessarily think we will have large increases,” Bland said. “But if Irma hits Florida, all bets are off.”

Several new subdivisions are planned or under construction around Greater Waco, including one with 1,500 homes and one with more than 750 homes.

“I could see Harvey delaying the completion of homes,” Bland said. “Right now, the emphasis on the Gulf Coast is laborers. Later, when that turns to new construction and remodeling, the shortage could impact more skilled people such as carpenters, electricians, plumbers and HVAC people.”

The Houston Builders Association reports that Hurricane Harvey and the flooding it produced damaged at least 30,000 homes in the city of Houston, which is more than the association projected to be built during all of 2017.

Local builder Steve Patrick, a 45-year veteran of the Greater Waco homebuilding scene, had a different take on the potential loss of labor.

“If you’re small like I am, building eight or nine homes a year, you are not going to lose anybody to the Gulf Coast,” Patrick said. “I use the same people over and over again, and there is no indication anybody who subcontracts with me is leaving the area. We have plenty of work here. I don’t see 15 carpenters leaving Waco bound for Rockport.”

Ken Simonson, chief economist for the Associated General Contractors of America based in Arlington, Virginia, said natural disasters typically create short-term spikes in prices for gasoline, plywood, plastic sheeting, plate glass and wallboard as residents prepare, then repair.

Longer-term problems follow if production plants are knocked offline, which happened during Hurricane Rita, Simonson said.

“I’ve not heard of any such damage to a production facility related to Hurricane Harvey,” he said.

After Hurricane Katrina “there were predictions of a giant sucking sound of workers heading to the Gulf Coast,” Simonson said. “But people now are busy in most parts of the country and don’t need to relocate there.”

Simonson said the Associated General Contractors recently conducted a national workforce survey, with 158 of the 1,609 respondents indicating they work primarily in Texas.

Two-thirds of the Texas workers reported they have the most difficulty finding concrete workers, well above the national average of 51 percent. That was followed by electricians at 61 percent, cement masons at 59 percent, carpenters at 57 percent, plumbers at 54 percent and installers at 52 percent.

“All of these occupations are likely to be in demand for flood damage repair, stabilization and replacement work,” Simonson said.

Hurricane Harvey altered operations at the Port of Houston, the second-largest port in the United States in foreign tonnage handled and the 13th-largest in the world, said Ray Perryman, president of The Perryman Group, a Waco-based economic forecasting company.

There could be a short-term shortage of products, including building materials, but it’s not likely to curtail Waco’s economic momentum, Perryman said.

Amarillo-based economist Karr Ingham also said short-term increases in material and product prices are likely, though an impact to Waco’s momentum is not likely.

Ingham recently reported the city of Waco, excluding surrounding cities, had issued 289 permits through July to build single-family homes, a significant increase from the 233 issued during the first seven months of 2016.

Commercial construction and renovation has also skyrocketed in recent years.

Bland Cromwell, a commercial and industrial sales specialist with Coldwell Banker Jim Stewart Realtors, said he does not see storm-related pauses.

“Everybody is scrambling for good help. That never changes,” Cromwell said. “But everybody I talk with is busy, too, and I expect that trend to continue.”

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