Circle of life,no, business, no…viscous circle…thats it!

Posted On: June 6, 2012 | Posted In:

This morning on while watching the local news and getting ready to head out for work, in the course of 20 minutes there was at least 4 commercials from law offices looking for people hurt on constructions sites. Injuries happen and if they should have or could have been avoided but the employer was negligent then by all means…..go get a lawyer.  However, that is about 1% of the claims out there.

Now the irony hits me when I get to the office and a couple comes in the door to talk about what they can build for their budget.  Get this, he was working for a construction company and just settled a claim for his injury on the job. He needs a big garage for all of his toys, four wheelers, motorcycles, snowmobiles, jets ski etc. (apparently the injuries that keep him from being able to work, do not keep him from having fun).  We are his third stop and already he is angry at the prices he is being quoted for houses.  In his words it is just ridiculous what we charge for a house.

Well I really wish it was ridiculous, I wish we made huge money on every house we build, but that is just not the case. In our world today if we can make 5-8% on a new home that is great.  Why is that, well believe it or not there are two cost that have gone way up over the last few years.  Material cost has escalated on unprecedented rates, not because of lack of material, but because of the increased labor cost to bring those products to market.  At the same time our labor cost and the cost of labor in the plants have gone up dramatically all of it driven by the rising cost of Workman’s Comp.  At the same time we have closed all the comp loop holes.  The states no longer accept exempt status, this means a contractor who works on his own still needs to pay workman’s comp on himself or the contractor that hires him must pay it on his behalf.  Typical contractor rates now are 29/100, roofers and concrete guys can be as high as 44/100.  That means for every $100 I pay my employee I need to pay an additional $29 to the state insurance fund.

These are the same blue collar hard working people who cannot afford housing.  Kind of a tragic circle.

Lastly let me say this, I can’t stand someone who sits around and complains about how the government is screwing up their lives, death, taxes and insurance are not going away.  But I do find it very ironic that the people who most need affordable, efficient housing are the ones who work on the process of supplying it while it gets further and further from their reach.

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