The CEO of homebuilders’ chief trade group doesn’t see shortages letting up soon
The CEO of homebuilders’ chief trade group doesn’t see shortages letting up soon
For the home construction industry, it’s been a year plagued by supply shortages, price increases and a tight labor market. And for many homebuilders, the shortages, in particular, have been widespread.
“It really started with appliances,” said Trish Hanchette, president of McKee Homes in Raleigh, North Carolina. “Then it moved to windows and doors. Then it moved to trusses. Today, it’s duct work.”
“Marketplace” host Amy Scott visited the International Builders’ Show, a marquee trade show for home and design professionals that ended Thursday in Orlando, Florida. While at the show, Scott spoke with Jerry Howard, CEO of the National Association of Home Builders, which puts on the show each year. The following is a transcript of their conversation.
Amy Scott: So we just heard from some builders about the supply chain challenges we’ve been hearing so much about, but some specific products that can really hold things up — like garage doors, windows — how much is that slowing down homebuilding right now?
Jerry Howard: You know, it obviously varies project to project, and even to some extent geographically. But I would say if I had to give an aggregate national average, it’s slowing down projects by a month to two months. I know one extreme case where a builder in Idaho told me last week that he was told by his appliance supplier not to expect appliances for a specific house that he was building for up to 12 months. That’s the extreme end and obviously, a serious problem.
Scott: Wow, 12 months. Is there any relief in sight?
Howard: I do not see any relief in the short term, unfortunately. I think that we have a severe labor shortage in America that manifests itself with our construction laborers, but also with longshoremen on the docks and truck drivers who then transport goods when they’re unloaded off the ships. And I think it’s going to take a while until we get back up to the way things used to be.
Scott: So one of the key exhibitions at the show every year is the New American Home, which is an actual home that people go and visit. I’m going to visit this afternoon and tour it. This year it is different. It’s a little bit smaller than some of your previous houses and makes special mention of the energy efficiency and other green standards. And I’m wondering if that shows how the NAHB is prioritizing reducing the carbon footprint of homes?
Howard: NAHB is very aggressive in trying to work with industry manufacturers to reduce the carbon footprint across the board. Our concern right now remains that it has to be cost-effective for the homebuyer. However, I will also say, interestingly, for the first time in 30 years, our polling numbers that we get from housing consumers show that they want bigger houses, and they want bigger houses because people are working from home on a much more regular basis. So for the first time, we are seeing bigger homes, but on the other hand, we are making them much more energy-efficient and sustainable.
Scott: At the same time, though, your group has opposed energy efficiency codes in the past, including a 2020 bill that would set efficiency targets for new homes and commercial buildings. But numerous studies have shown that residential buildings account for about a fifth of the country’s carbon emissions. How are homebuilders trying to address that when more and more Americans are waking up to the reality of climate change?
Howard: Well, the first thing you have to understand is we could make a house that is completely sustainable, completely energy efficient and would withstand any natural disaster. That house would be unaffordable for an American to live in. And if they could afford it, they wouldn’t want to because aesthetically, it will look like a concrete bunker. And so there has to be a balance. The second point that I got to make is you could make every new home in every country in the world energy efficient, but if you don’t do something about existing housing, it’s a drop in the bucket. Remember, new homes are built more sustainably, they are more energy efficient, but existing housing isn’t. And none of these codes are going to be made to apply to existing homes. We don’t think that that’s the right way to approach it.
Scott: Let’s talk about where we build, which has also become an increasing issue as we continue building into places where wildfires are becoming a bigger risk, flooding. Does the industry have a role to play in making sure that we’re not building in areas that are so unsafe?
Howard: I think the industry has a role to play to try and make the housing as safe and sustainable as they can. But housing choice has been a hallmark of the United States since its inception. There are all kinds of policies that can be looked at to make sure that some of these natural disasters don’t occur or that the housing is better able to withstand them, but those who say we shouldn’t build on the coasts or shouldn’t build on the shores of the Great Lakes, that’s just not realistic.
Scott: It may be too early to ask you this, but I’m sure you’re already planning for the builder show in Vegas next year. What’s the New American Home going to look like then?
Howard: I expected it will contain even more environmentally sensitive products. But I expect it will also represent the luxury of American homes that the new American home has come symbolize.
Scott: Will it have a garage door?
Howard: I hope it will have a garage door. I hope it’ll have all of its appliances, and I hope that when they start to build it, the lumber package is there on time.
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