I worked in the building trades for about 40 years, mostly in home repair and remodeling, but some new residential construction. And I have seen the cost of housing rise over the years. I do have some thoughts on why this has happened, and why it has gotten so bad. Some of the increases in cost over the years have been caused by inflation, especially in the 1970s; but a lot of the increases have been for other reasons.
My parents had grown up poor during the Depression, and were always renters until I was 12 years old. In 1962, for the first time in their lives, my parents bought a house of their own, from a builder working in a rapidly growing town in the Cincinnati suburbs called Forest Park, Ohio. That new house cost $16,000. And it was not a “shack”—it had a full basement, brick exterior, and a one-car garage on one end of the house. It had a modern (for 1962) kitchen, with wood cabinets, Formica counters, a garbage disposal and a dishwasher; it had laundry hookups in the basement. It had three bedrooms and one bathroom.
Fifteen years later, in 1977, my wife and I bought our first house—a run-down “fixer-upper” in an older neighborhood in Cincinnati called East Price Hill. It cost me $17,000—more than my parents had paid for a new home fifteen years earlier. Two years later, after I learned to re-wire it, painted everything that didn’t move, and refinished some of the wood floors, it sold for $25,000.
We bought another “fixer-upper” in a different Cincinnati neighborhood called Northside. It was a brick house, built in 1913. I had to learn to do more kinds of work. After a couple of years, I gutted the kitchen, learned to hang and finish drywall, put in some used wood cabinets, added a tiny half-bath in what had been a small pantry, and again, painted everything that didn’t move. The work was slowed down by two things: our family grew—we had one son when starting on the first house, and added a daughter and another son while living in Northside. And my work got noticed and I started getting paid by other people to do work on their houses. Once I got up to full-time work, that meant I could only work on my own house on the weekends! Along the way I had linked up with an old friend who had burned out as a school teacher and was working as a carpenter. We worked together for five years. After that, he was having back problems, and went back to teaching.
In 1990, we sold that house in Northside for $60,000, and took a big plunge—we built a new house in a growing suburb just across the state line in Dearborn County, Indiana, called Hidden Valley Lake. And my friend and I, and my older son, did most of the work on that house. We hired out the excavating, the basement walls, the heating system, and the drywall, and at the very end, some carpet; a few friends who also worked construction helped with the concrete floors for the basement and garage. The rest of it we did ourselves—the framing, the siding, the roof, the windows, the wiring, plumbing, the painting, the interior doors and trim, the kitchen cabinets, the bathrooms, and some hardwood flooring and ceramic tile. We had to borrow more money than we originally intended, but we got it done. And in 1998 it sold for $125,000.
That’s my background. Now let’s look at some of the things I have learned over the years from all that, plus the later work that I’m not going to take the time to go into.
That house my parents bought was fairly simple—a basic rectangle, a one-car garage, one bathroom, a plain simple roof. There were other houses in that neighborhood that were fancier and more complex. And they were more expensive, even then. Say you want an L-shaped house; each corner past the original four can add ten percent to the cost of the house. Each added corner adds a couple of 2x4s to the standard framing—but it doesn’t stop there. The L-shape makes the roof more complicated, taking more materials and time. When the drywallers are finishing the inside, inside corners take about three times as long to tape and finish than flat drywall seams. Outside corners also take longer, and take a lot more drywall compound. Cutting in corners when painting takes longer than rolling the walls—so more corners add to that. And every additional corner on baseboards means a bit more time spent cutting. All of these things together add up, until the house costs ten percent more.
And it isn’t just the number of corners. Size matters. That should be obvious, but a lot of people don’t seem to understand that. I don’t know the exact size of the house my parents bought, but I am guessing it was about 1,000 to 1,200 square feet, not counting the garage. And that was a one-car garage. My parents only had one car, so they didn’t need a bigger one. Most of the houses in Forest Park back then had one-car garages. We did get a second car in 1967, after I got my driver’s license. It was probably similar for a lot of families in that time.
Now a lot of houses are 2,000 square feet or more, with two-car garages. Double the size of the house, and you’re going to increase the cost. And there are other factors. Most new houses now have central air conditioning; my parents’ house did not have that. They did have a forced-air gas furnace, but no AC. Their house did have a kitchen and one bathroom—and those two rooms were back-to-back. That minimized how much piping was needed for water supply and drainage. I have worked on one-floor houses that had the kitchen in one end, the master bath at the far end of the house, and another bathroom in between—but not right next to the kitchen. All that piping adds to the costs. And kitchens and bathrooms are the most expensive rooms in the house, because of the costs of cabinetry and plumbing fixtures.
Another cost factor that affects housing costs is local government regulations. Local governments have taken to regulating lot sizes, building sizes, and more. That house I built in 1990 was outside of any city; but the Homeowners’ Association had a rule that any house built there had to have a minimum of 900 square feet on the first floor. It didn’t matter if you were building a two-story house; it still had to have 900 square feet on that first floor. The house plan we had found and liked was a T-shape, (yes, I know, extra corners cost—I learned it the hard way!) but it only had 750 square feet on each floor. To get it approved, even though the whole house was more than 900 sf, we had to add 150 sf per floor to the plan. So we extended the living room end, and added some more to the back of the kitchen, in the top of the T.
It is important to remember that local governments also profit from more expensive houses, through their property taxes. And they have ways to influence what builders construct, through regulating lot sizes, the whole permitting process, and more. “Affordable housing” actually reduces their income—so while they may not admit it, they are more interested in upscale expensive housing.
There is one major reason for the high cost of housing—the shortage of workers to build it. This is not a new thing; it has been going on for over thirty years. The trade press magazines I subscribed to have talked about it for many years. At one time, framing carpentry was considered a young man’s job; now there aren’t enough young men in construction, so it’s mostly older men doing the work. At the last new house I worked on, we had a crew of four; I was the youngest, and I was 47 at the time. And during the two weeks we were on that site, I saw only one man who looked like he was under 30! There are various reasons for this fact. One is that the Baby Boom after WWII was followed by a “baby bust”—fewer children being born, couples marrying later, and so on. The school district that included Forest Park closed one of their two high schools in the mid-’80s, because they didn’t have enough students to justify both schools. Add in the decline of non-academic classes like shop, where kids could find that they liked working with their hands.
What about the rise of women in the workforce? It has not had much effect on construction. Statistics I found show that today, about 10 or 11 percent of construction workers are women—nowhere near half. And from what I have seen, most of them are in the less physically demanding trades, like finish carpentry or electrical work. You do not see many women working in framing, concrete, or roofing. Those are tiring, heavy labor, even for men. They are also more dangerous; roofing is one of the most dangerous jobs in construction.
What about immigrants? There are some. But they are mostly congregating in the crew jobs, like roofing or siding. In Indianapolis, where I lived and worked for seventeen years, Hispanics have largely taken over the roofing jobs. The crew will have one man with good enough English to talk to the contractor (who is still native-born) and the homeowner. Then he talks to the rest in Spanish. And I have seen few Hispanics in the more technical fields like plumbing, wiring, and HVAC, which are harder to master.
But not all of the work in construction takes large crews. Often, one or two men is enough. If you are installing plumbing fixtures in a bathroom, there is not enough space for three people. Even a kitchen is not much better, because of the way things have to be done. You start at one end of the cabinets, and each additional cabinet is attached to the previous one as well as to the wall. Two people is all you need, and I have sometimes done it alone.
So you can get your house framed, sided and roofed by immigrants. But if you can’t find the other trades, you won’t be able to get the house done. The immigrants are at best a partial solution.
But what I have been saying so far does not really convey the scale of the decline in construction workers. These days, you might see a builder selling homes in a new subdivision, often of two or three streets. A few might be larger. In contrast, Forest Park, the place where my parents bought that home in 1962, did not even exist before 1954. It was a mix of open country and wooded areas, that had been bought by the federal government during the Depression. Construction on houses began in 1956. By 1960, there were 4800 people living there! By the 1970 census, there were 15,000 people. And they were not only building houses, they had to build the streets, the utilities—gas and electric, water and sewer lines—and the school district was building a new school building every year to keep up with the population increase. And this town was not even the only construction going on in the Cincinnati area!
We had a “housing bust” in 2008, when the mortgage market tanked and house prices dropped dramatically. Will we see such a thing again? I don’t know. But I suspect it would at best be only a partial easing. It might reduce the portion of housing prices linked to inflation and mortgage rates. It will not reduce the problem of finding enough workers to build new homes.
There are some signs that change may come. I am seeing reports that young men are skipping college to seek other lines of work. And Mike Rowe, of the “Dirty Jobs” show fame, is promoting trade work in many ways. I wish him well. But my guess is the needed changes are going to take years to improve the situation.