Contractors, a national trade organization that represents the non-union construction industry. The demand for skilled labor is higher in the North Bay. Local workers have been pulled away from construction by well- paid jobs in solar panel and electrical vehicle charger installation. Hanke is also the founder and executive director of the Lime Foundation, a Santa Rosa-based nonprofit that runs the NextGen Trades Academy (NGTA) roofing and construction
In 2023, Burbank Housing, a Santa Rosa-based developer, saw construction bids come in at the expected estimates as well as some lower estimates. Burbank Housing builds affordable housing and permanent supportive housing (PSH) in Napa and Sonoma counties.
Roger Nelson, CEO of Midstate Construction in Petaluma. [Photo courtesy Roger Nelson]
Monica Nelson, vice president of marketing and business development for Midstate Construction in Petaluma. [Photo courtesy Monica Nelson]
PSH is defined as housing with on- site social services for people who formerly experienced homelessness and/or have physical disabilities and chronic health issues. Jocelyn Lin, director of housing development for Burbank Housing, says it is rare to see bids come back lower. She adds Burbank Housing appreciates it when local general contractors work with them to combat inflation, supply shortages and additional expenses related to weather delays. Lower bids have helped Burbank Housing manage project budgets amid other rising costs such as insurance. “In recent years, the
vocational program. NGTA offers three weeks of training for 16- to 24-year-old underserved youth from Marin and Sonoma counties. There are other local programs like NGTA, such as the North Bay Construction Corps’ partnership with the Marin Builders Association. These trainings ease the labor shortage. They also benefit young people by helping them determine what trades and skills they want to learn. “Many students in
the NGTA program are interested in careers in green building, renewable energy and sustainability. This involves learning how to install technologies like smart appliances and LED lighting. Our classes go beyond the basics of working with steel and insulation,” says Hanke. The NGTA program
“Most buyers aren’t looking to cut weeds and till the land.” —Eric Ziedrich, real estate agent
costs of insurance have skyrocketed. It has been tough to find companies who will insure properties dedicated to permanent supportive housing,” says Lin. Lower bids have also
helped Burbank Housing deal with specific supply chain issues. One of Burbank Housing’s general contractors is Midstate Construction in Petaluma. Wesley Barry, vice president of project management for Midstate Construction, says manufactured materials and equipment that depend on electronic circuit boards and chips are increasing in cost. The rise is occurring at a pace greater than that for other materials. “Along with the cost increase, the demand versus the availability of these goods is significantly impacting construction schedules. That in turn also increases costs. This impact is widespread as it affects numerous components, including things like fire alarms, automated door operators and irrigation controllers,” says Barry. For new starts, one of the critical components is electrical distribution panels. These panels bring power to a building. The scarcity and potential delay for electrical distribution panels impacts overall project schedules. “On one of our projects, we placed the order for the switchgear as soon as we executed our contract with the owner. This was prior to the loan being closed and before we were able to break ground,” says Roger Nelson, president of Midstate Construction. Occasionally Midstate Construction has finished a project ahead of the arrival of the switchgear.
typically graduates eight classes of students a year, with between 15 and 20 students per class. Hanke and her colleagues say many more trained workers will be needed in the next decade. Predictable as well as surprising costs for affordable housing The growing demand for renovation and general contractors’ motivation to work with high-end customers makes it more difficult for property owners with less cash to complete work. Low availability poses a problem for affordable housing, says Robert Eyler, professor of economics at Sonoma State University. “Local governments should not want to be builders. The solution is for local governments to form more partnerships with private sector developers. Governments can do more to provide incentives and pathways for projects to be completed,” says Eyler. Rohnert Park and Solano County serve as models for streamlining affordable housing construction. “Other communities, especially well-off areas in Marin and Napa counties, struggle with affordable housing construction. For decades, local residents have said new affordable housing will not fit the character of their areas. Residents also feel they will build units and there will not be enough demand for them,” says Eyler.
April 2024
NorthBaybiz 23
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