Worker shortage leaves Detroit lagging on redevelopment projects

Anyone who comes to downtown Detroit these days comes away astonished at the rapid pace of redevelopment.

But shortages of skilled trades workers to build all the projects is beginning to pinch the pace of work. The shortage has been growing for some time for a lot of reasons. But it's gotten bad enough so that it's become an open topic of conversation among developers, planners and civic leaders.

Richard Barr, a development attorney with Honigman, Miller, Schwartz & Cohn, said projects now take longer than they would have even five years ago.

"Projects are continuing but there’s others that are taking their dear time and making sure that they really have their numbers figured out and that they have subcontractors committed to prices. So people are being more cautious than they were a few years ago," Barr said.

"By no means do I think things are stopping," he added. "There’s still plenty of optimism and plenty of euphoria, but I see people needing to take more time to make sure that it really makes sense."

Nor are the shortages touching just projects in downtown Detroit. Dennis Cowan, a development lawyer with Plunkett Cooney who works mainly on suburban deals, said about 10 suburban projects he's worked on recently have all taken longer to finish.

"Everybody’s being held up due to lack of skilled trades," he said.

One of metro Detroit's leading contractors, Barton Malow Co., echoed the concerns.

"It’s a very big issue," said Dannis Mitchell, the firm's diversity manager. "It’s doing nothing but getting even larger."

A shortage of construction workers tends to ripple through the entire development process. As projects take longer to get started or to complete, the cost of borrowing money to build something goes up. That in turn can make developers even more cautious.

Skilled trades include electricians, carpenters, plumbers, pipefitters, roofers, cement masons, the ironworkers who erect the steel skeleton of tall buildings, glaziers who work on windows and more. Shortages of unskilled laborers are also showing up.

There are many reasons why shortages have developed. The Great Recession of 2007-2009 all but wrecked Michigan's construction industry for a time and saw a huge drop in the number of hard-hat jobs in the state. The numbers have grown back but remain below pre-recession levels.

Then, too, a stronger economy and historically low interest rates have boosted confidence and encouraged investors to start projects. Everyone seems to be jumping in at the same time, especially in the greater downtown area.

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Meanwhile, the lucrative pay available from rebuilding work in places like storm-ravaged Texas or Puerto Rico tends to draw away skilled trades workers from many parts of country including Michigan.

And as some in the industry admit, the construction trades have not always been open to welcoming people of color into their ranks, although that has been changing in recent years.

What to do about it? The industry is responding with a host of apprenticeship programs and efforts to encourage students to consider skilled trades as a career.

Barton Malow soon will host its third annual boot camp, a six-week session for 18- to 24-year-old youths from Detroit who get to experience up close what construction careers look like.

That sort of thing helps, but clearly there's no easy answer. The economy is doing well nationally so contractors across the U.S. need the same sort of skilled trades that Michigan does. And the coming start of construction on the Gordie Howe International Bridge between Detroit and Windsor will require thousands of skilled workers, putting even more pressure on the industry.

In a way it's a good problem to have. It testifies to the renewed economic growth taking place in the long-dormant Detroit market. And it promises good-paying jobs for those who choose that line of work.

But it does mean that the many dozens of projects we hear about in and around Detroit may remain on the drawing board a little longer than we'd like. It's hard to rebuild a city without enough workers to handle the hammers.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.