Rebuilding after a disaster is hard. Doing so after multiple disasters on both sides of the country is harder. Trying to put things back together when there aren’t not enough materials, components, or skilled labor is another type of disaster in the making, like a recovery Hunger Games.
On the East Coast, North Carolina, Florida, Georgia, South Carolina, Virginia, and Tennessee are ready to begin the process of rebuilding. The damages facing Los Angeles are only starting to come into sight. And, as the Wall Street Journal reported, there aren’t enough materials, supplies, and labor to go around.
That shouldn’t be surprising. As many sources have told GlobeSt.com over the last few years, getting skilled construction help has become difficult in general. Developers and contractors can find themselves entangled in contentious scheduling, getting different subcontractors in when they are needed. As with any supply chain, manufacturers and vendors generate supply to meet projected demand. There can be some slack allowing for moderate demand increases. But when so many people, businesses, and places suddenly need vastly larger amounts of materials, supplies, appliances, and building systems, there won’t be enough to go around because it takes longer for companies to adjust their production.
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“We’ve had disasters like these,” said Jay Lybik, national director of multifamily analytics at CoStar told the Journal. “But never anything like this where we’ve had so many.”
Not all developers and contractors will feel the pinch all at the same time. It still takes time to deal with insurance adjustors, permitting and entitlements, and possibly building restrictions in areas like California where more recent regulations might forbid rebuilding in areas. But that also isn’t like lining up every need and knowing that each will be willing to wait as long as necessary.
The California fires saw the destruction of 12,000 buildings with early estimates of economic loss at $50 billion. Back east, between Hurricanes Helene and Milton, there is another estimated $50 billion in losses.
Sean Burton, chief executive at the Los Angeles-based multifamily development firm Cityview, told the Journal that builders will also compete for such services as architects, engineers, and debris removal.
There are also questions of prices. During the pandemic, the final delivery construction part of the Producer Price Index rose steadily. The indexed prices did come down in 2023 but then rose again and are now at all-time highs.
President Trump has emphasized that he will seek 25% tariffs on goods coming from Mexico and Canada, and 10% additional on anything from China, creating even more financial pressure. His stated intent on deporting undocumented workers could cut into labor availability.
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