The 21st Century ROAD to Housing Act was recently passed into law without President Trump’s signature, marking the most significant federal legislative action on housing in over 20 years. Although the president refused to sign the bill into law without other strings attached, lawmakers’ interest in housing affordability appears solidified heading into the midterms. That said, the push to build more housing and reduce costs for Americans faces a looming challenge that has yet to be addressed: the shortage of workers in construction and the skilled trades.
The Skilled Labor Gap in Construction Trades
The shortage of workers in the skilled construction trades–professions like carpenters, electricians, plumbers and HVAC repair–is not new. Since the last housing boom ended in 2007, employers in the construction trades have struggled to amass enough skilled labor to meet the steady rise of housing development across the country. The retirements of industry veterans, limited interest from young people in entering these professions and surging demand for construction labor have delayed projects, increased labor costs and raised pressure on existing workers to be more productive and cut corners to meet project requirements.
In May, there were around 298,000 construction job openings, marking the third month in a row of increased openings in the industry and around a 34% year-over-year increase compared to May of last year. Those opportunities do not appear to be slowing down, with the Bureau of Labor Statistics estimating that employment in construction occupations is expected to grow by 5.2% between 2024 and 2034, putting it among the highest growing industries over the next decade.
However, this gap represents a major potential roadblock for supply-side housing solutions. Even before Congress’s historic action last month, residential home construction was being stymied by deficits in skilled labor. The National Association of Home Builders estimates this led directly to a reduction of approximately 19,000 single-family homes not being built in 2024 alone and an aggregate economic impact of over $10 billion lost due to longer construction timelines.
Furthermore, the industry faces rising demand from multiple angles. Skyrocketing investment in physical infrastructure, renewable energy projects and now hyperscale AI data centers are set to squeeze the construction industry even more in the coming years. If it persists, the skilled labor shortage could derail supply-side efforts to address housing affordability as well as broader ambitions to build in America.
The Solution: Investing in Apprenticeships
The deep-seeded labor challenges facing construction firms cannot be solved overnight, but one essential piece of the solution is to increase investment in the workforce development system, specifically for registered apprenticeships. Pathways to construction and skilled trades careers exist almost entirely outside of the four-year college/university degree system and typically involve some combination of classes, credentialing and on-the-job training that culminates in the completion of an apprenticeship.
Apprenticeship programs are critical not only for preparing people with the skills to work in the trades but also attracting people from diverse talent pools to the industry, educating them about the career outlook and providing support services that make participation possible. Partnerships between employers, schools and community colleges help to build established pipelines to these industries, providing employers with trained talent and workers with the opportunity to enter the field while getting paid and not taking on any debt. This improves workforce diversity, bolsters labor supply and provides the next generation with meaningful labor market opportunities.
By the end of the Biden administration, there were more than 670,000 active apprentices, an increase of more than 100,000. The Trump administration has continued this trend of expanding apprenticeships, setting a goal of creating 1 million active apprentices. Yet, in the year since the announcement, the number has essentially flatlined, posting just 3% growth in new apprentices over the past year.
The stagnation appears to be driven by several factors including the current administration’s campaign against DEI (diversity, equity and inclusion), which has vastly limited the talent pool available to apprenticeship providers and employers. Women and people of color are vastly underrepresented in the construction industry, making them crucial for expanding the construction labor force and meeting the growing level of need.
Apprenticeships could be a feasible and necessary pathway to achieving diversification in the sector. A 2023 Department of Labor report showed that there were higher proportions of women and people of color participating in apprenticeships than are present in the national construction workforce. Unfortunately, the Trump administration reportedly canceled dozens of grants under the Women in Apprenticeship and Nontraditional Occupations (WANTO) program. While women’s employment in the construction industry had been growing from apprenticeship participation, the administration has reversed that progress. Without diversifying the workforce, the construction industry’s labor shortages will continue.
In addition to participation gaps, the lack of federal funding for supporting apprenticeship programs limits the number of people that can benefit from them. Apprenticeships for America estimates that the US would need to spend $5 billion, more than 17 times the $285 million currently allocated, to make a dent in the level of need and interest. Any strategy for addressing the deficit in skilled labor must double down on investments in apprenticeship programs and restore efforts to diversify participation from traditionally underrepresented groups.
Linking Economic Mobility and Affordability is Good for Everyone
The 21st Century ROAD to Housing Act presents an extraordinary opportunity to alleviate rising housing costs while simultaneously promoting economic mobility. Apprenticeship programs alone may not solve the labor shortage overnight, but they are an important part of the solution. Restoring the housing supply will require expanded investment from Congress and strengthening oversight to hold the administration accountable for spending allocations made to registered apprenticeship programs like WANTO. Doing so will strengthen American capacity to build physical infrastructure across the board and help reduce housing costs all while promoting economic mobility for people from underrepresented backgrounds.
Simon Wang is the Economic Mobility Project Specialist with NCRC’s Economic Mobility team.
Photo credit: CONSTRUCCIÓN TOTAL via Pexels.
