I recently had the opportunity to talk with Daniel Durden, CEO of the Pennsylvania Builders Association, who previously worked as senior vice president and general counsel for the National Association of Home Builders before coming to Pennsylvania. We spent some time talking about the housing market in Pennsylvania and the challenges that builders are facing to meet the current housing demands.
Recently, the National Association of Realtors® Chief Economist Lawrence Yun noted that housing starts are insufficient to meet demand and the industry has under-built for 10 years. Reports also show that fewer houses were built in 2019, compared to 2018, and what contributes to these conditions.
Durden said there are a number of factors leading to the shortage of homes being built. One of the key factors is a shortage of skilled laborers. “It’s difficult to get trained people to do the work,” he noted. “Land availability is also a huge deal. Particularly for smaller builders, it’s difficult for them to obtain buildable land. And when I say buildable land, I mean where it’s permitted and titled that allows them to put up single-family homes at a profitable rate. So, given local, state taxes, regulations and limitations, it’s very difficult for small builders to build homes that used to be their bread and butter.”
In addition, Durden said rising costs make it difficult for builders. “In most part of the state, to develop the land prior to digging the foundation, it can cost about $100,000 to acquire the property, to get the necessary permits and authorizations to do what you want to do. And we’re not talking about a large property. Plus, the rising costs of materials hasn’t helped.”