Real Estate

Desperate for workers, a Colorado homebuilder starts a free school

Key Points
  • "Every single year the labor situation has basically gotten worse," says Patrick Hamill, CEO of Oakwood Homes.
  • Berkshire Hathaway-owned Oakwood, started a foundation to fund the academy and donates $1,000 for every house it closes.
Homebuilder creates school to help ease labor shortage
Homebuilder creates school to help ease labor shortage

Inside an unassuming warehouse on the outskirts of Denver, 18 students are learning to saw, tile, drill, plaster and paint.

They are mastering how to build a house. While that number might not sound like a lot, today's homebuilders are desperate for all of them.

The students are some of the first to enroll in an eight-week "boot camp" at the Colorado Homebuilding Academy, a nonprofit organization that opened this year. The course is free, founded and funded by Oakwood Homes, a Denver-based homebuilder.

"Every single year the labor situation has basically gotten worse," said Patrick Hamill, CEO of Oakwood. "People retire, and there's nobody to replace them, and as an industry, ultimately we've just done a lousy job marketing our opportunities to young people."

So Oakwood, which is owned by Berkshire Hathaway, started a foundation to fund the academy and donates $1,000 for every house it closes. This year, Oakwood expects to close on 1,356 homes. In its first year, the program will run 11 boot camps, training approximately 200 workers. Next year, company officials hope to double that.

"Trade associations are involved, other homebuilders are involved, because we all know if we don't do this, we're not going to have a labor force to meet the needs of our industry," said Hamill.

Pat Hamill, CEO of Oakwood Homes.
Emily Gaffney | CNBC

The construction labor shortage is acute nationwide and especially so in Denver, which is seeing huge employment growth. Unemployment in the state is just 2.3 percent, the lowest in the country, and experts at Colorado State University expect a 38 percent increase in vacancies in the construction trade by 2025, according to a recent report from the National Association of Home Builders.

The housing market cannot keep up with the demand.

Nationwide, homebuilders say growing costs and a shortage of labor are the biggest problems confronting them this year, according to an earlier survey by the NAHB.

The problem has been growing since the housing crash, when construction stalled and workers left the field, many of them never to return. In 2011, just 13 percent of builders said labor was a problem. Today, that share is 82 percent.

"We need to do a better job in training and developing people, and we need a national immigration reform bill. We have people that are afraid of being deported so they've gone underground," Hamill said. "It's just made housing expensive."

We need to do a better job in training and developing people.
Patrick Hamill
CEO, Oakwood Homes

Adding to the shortage is an aging workforce. As older workers retire, new ones are not coming in to fill their positions. In another survey by the NAHB, young adults ages 18 to 25 were asked if they knew what they wanted to do for a living. Of the 74 percent who said they did, just 3 percent said they wanted to go into the construction trades.

"I wish we had them banging down the door, we don't," said Mike Smith, director of the Colorado Homebuilding Academy. "When we're working with the younger generation, it's tougher because there are not a lot of people looking at a job in the trades as their first career."

Bryce Weatherford, 27, didn't consider building at first. Like so many millennials, he went into the tech sector and began working in software sales and customer support. Soon he found the Denver market was saturated with workers just like him, so he decided to change.

"I think for me it was job satisfaction, finding something new, a new challenge," said Weatherford, leaning over a 2-by-4 with a protractor at an evening class. "I just kind of heard that there was a lot of need for this kind of work, and so I figured it would help justify it, getting a little extra money."

The average wage for graduates of the program is more than $16 an hour. Some are now making as much as $20 an hour, according to Smith.

Alexis Monserrate, 25, found a job immediately out of the program, working for Basement Finishing Colorado. She had worked in New York in everything from retail to child care and was looking for something else. She said the work actually appeals to her millennial nature.

Recent graduate, Alexis Monserrate working on a home.
Emily Gaffney | CNBC

"For me, I would say it's because I'm a millennial, because I like instant gratification, and within eight to10 weeks I get to see basements transformed into a livable space," said Monserrate.

Her boss, co-owner Leslie Soell, said the labor shortage had her looking everywhere for workers, even on Facebook and Craigslist. She has been very pleased with Monserrate's work and expects to rely on the Colorado Homebuilding Academy for future employees.

"Alexis came on board having some general skills, but not so much that you do need to start at such a high salary," Soell said. "We can train her to do things the way that we need to have them done and she has a great future with us. She can choose where she wants to go within the company."

Women historically have avoided the construction business, but builders are hoping that will change. As a result, they are marketing directly to them. Women make up half the population but just 12 percent of the construction workforce, according to the Bureau of Labor Statistics. At the Academy, they make up about 20 percent of students.

Basement Finishing Colorado co-owner Leslie Soell and Alexis Monserrate, recent graduate of the homebuilding program, who Leslie hired.
Emily Gaffney | CNBC

Angie McKevitt, 47, is a hair stylist. She saw a story about the boot camp program on the local news and signed up. She had once wanted to build homes for Habitat for Humanity, but that never worked out.

"This is something I've always wanted to do, I've always wanted to learn how, and this was a great opportunity," she said.

The hardest part of growing the program has not been funding. It's finding students. Smith is hoping for a new grant from the Colorado Department of Labor and Employment for recruitment and outreach.

"We actively recruit every day, out at job fairs, schools, local work force offices, community organizations," Smith said. "We'd like to start a class every two weeks instead of once a month."

Smith has also been talking to other builders across the nation, helping them to set up similar programs.

"For the last several generations we've been saying things like work smarter not harder, but the negative consequence of that was go to college and don't go to work with your hands, Smith said. "We've got to really change the mindset of the American public that these are great jobs that are really fulfilling."