After Gov. Gavin Newsom shut down much of California’s economy Thursday to slow the spread of the coronavirus, Sacramento construction executives and elected leaders went into overdrive.
They lobbied state officials to get construction exempted from the “stay at home” mandates. And they made calls to builders and developers, encouraging them to keep sending workers to job sites.
Industry officials said the mobilization was undertaken to prevent a repeat of the Great Recession, when housing construction went dead for several years, worsening a housing crisis that endures today.
It paid off. State health officials changed the wording on the state website late Thursday night to specifically include construction and home construction as “essential” work that could continue during the crisis. Sacramento County’s similar local order, issued hours earlier and written in consultation with industry officials, already had such wording.
It wasn’t that builders believed Newsom had suddenly dropped his commitment to new housing and other construction. It’s just that in unprecedented times, you better not take a chance, they said.
Get it in writing. Make sure one crisis doesn’t accidentally ignite a second one.
Erika Bjork of the Sacramento Metropolitan Chamber of Commerce, which worked with the construction industry, said workers typically do not work close to each other on construction sites. They should be able to practice social distancing.
“We need to keep this engine humming, so when we come out of this we have housing,” she said. “We don’t want to see what happened in the recession.”
CONSTRUCTION WORK CONTINUES AMID COVID-19
The construction industry employed about 66,000 workers in January in the four-county Sacramento metropolitan area, accounting for about 6 percent of the workforce. By way of contrast, state government employed 91,000.
The question of what is essential has become a hot potato topic this week. Several counties, including Sacramento, for instance, have determined that cannabis shops are essential enough, given their medicinal value, to remain open.
An economist who monitors construction, Jeffrey Michael of the University of the Pacific in Stockton, said the building industry is not as “essential” to day-to-day life as grocery stores or doctors offices, which remain open. But, construction “is absolutely a critical sector of the economy … that the was biggest effect of the Great Recession – that industry shutting down,” Michael said. The state needs construction to continue if it is going to end its housing shortage.
Peter Tateishi, head of the Associated General Contractors of California, said word spread Friday to contractors, builders, and workers that they could go to job sites and continue construction.
“We take it that we are exempted in the work we are doing,” he said, given the revised wording in the governor’s order. “Our members are all working today.”
He said that includes electricians on a runway project at San Francisco International Airport, workers on a new hospital in Santa Rosa, and crews working on freeway improvements to Interstate 5 in Los Angeles.
The coronavirus crisis has hit just as some builders were saying they felt the state was making headway on its housing crisis.
Sales figures for new homes show that February was one of the two best sales months since 2007, according to the Northern California Building Industry Association.
BIA head Michael Strech said March likely will see sales number drop. With many predicting an immediate recession, and with layoffs piling up in recent days, some would-be buyers will back off, and builders will cut production.
Strech said the industry is adapting by inviting shoppers to take virtual reality tours of homes online. Interested shoppers can set up private appointments on the phone for walk through showings. “We don’t want to lose momentum,” Strech said, but conceded, “we expect a decrease (in home sales) in March.”
Local governments are keeping some building and permit department employees on the job, working remotely, to process applications and building permits. Sacramento city building inspectors are still on the job, city officials said, allowing construction to continue.
Barry Broome, head of the Greater Sacramento Economic Council, said he spent the day on the phone Friday calling builders and developers, encouraging them not only to maintain ongoing projects, but also to launch new ones.
“The natural thing to do right now is to freeze,” he said. “But this is a great time to be strategic.” Construction and labor costs are down, he said, so people who start building now can have projects ready late this year or next year when, he predicts, the economy will bounce back.
Home remodeling company EJ Reed Construction in Sacramento is forging ahead, albeit cautiously. Co-owner Kendra Reed said some employees who are under the weather are staying home, and the company is considering postponing some remodeling jobs.
But she said they are continuing work on several bathroom and kitchen repairs, as long as local governments continue to give them permits and inspections. Workers now wear gloves and face masks.
She said her company can’t stop now on jobs where they have torn out a family’s only bathroom, and another family’s kitchen.
“We want to continue working to make sure clients have ability to shelter in place,” she said.
