How many jobs does it take to build a house?

Last in a series

Our house is finally done. But there are still some loose ends and a few more jobs as our series examines the human impact of the construction downturn.

It took 160 jobs to build our house. It would seem the story is complete.

But there are still more jobs in addition to those involved in the actual construction. And not all houses are the same, even modest ones such as the example we’ve focused on during the past six weeks.

So to conclude our series, we’ll bring in a few more “mandatory” jobs associated with the project as well as some common options not included in the house we examined.

Realty and money

Except in rare cases, somewhere in the process of acquiring a lot a local Realtor was involved. In fact, most parcels that are sold involve a selling and a listing agent, and typically two clerical employees who handle the contracts and paperwork. Two jobs minimum if the listing agent makes the sale, but most often four people are involved.

Financing is an important piece of the homebuilding puzzle. In most cases, a construction lender extends a loan directly to the builder or to the borrower. Assuming one construction lender and one clerical worker, we have two local jobs on this segment of the project.

Most construction lenders are not involved in the permanent mortgage loan. It is an entirely different form of lending involving dozens of different programs and a different regulatory structure. We’ll add three more jobs here: the loan “originator,” a processor who gathers the paperwork and an underwriter who approves the loan. Some or all of these jobs can be local, but in general the underwriter is an out-of-town employer.

Carl Worsley, general contractor

Our last profile focuses on the man who made the project happen, Carl “Pogie” Worsley
full story »

We now have added seven to nine jobs. The lender will now send a request out to an appraisal management company (one job) who will in turn assign the appraisal to a (hopefully) local appraiser. Two more jobs, one local and one typically out of the area.

Assuming the financing is approved, the loan must now close. North Carolina is an attorney-closing state, which means loans must be closed by an attorney admitted to the North Carolina bar. The attorney almost always engages one employee for title research (a paralegal) and another expert who handles the actual closing documents, which are quite extensive and subject to regulatory oversight. Three direct jobs, almost always local, are involved. The attorney will also require a title insurance policy, again usually obtained locally, adding two more jobs.

The borrower will also need to obtain hazard and flood insurance. Add an insurance agent and another clerical job. Our total rises to 14 to 16.

The loan will be recorded at the Registrar of Deeds, and the local tax office will be informed and tax stamps collected. Four government jobs at a minimum for these functions.

Finally, most local buyers will add a cable or satellite television connection, as well as a land-line telephone. Three installers and three clerical employees at minimum process the order.

Our final total for this phase is 24 to 26. Let’s split the difference and call it 25, for a grand total of 185 individual jobs to build one house.

As we have often mentioned, if anything, this total is low as we are quite sure we have not included many order-taking, processing, billing and warehouse jobs that would be necessary with each vendor and supplier.

Optional equipment

Buyer preferences and geography can bring even more local jobs into the picture, even on modest homes. For example, in-ground swimming pools (three to four jobs), fences (three), fireplaces (two) gas hookups for fireplaces and appliances (two), pre-wiring for modern sound systems (two) and landscaping trees, irrigation, shrubs and sod (11 jobs start to finish) can go into a house.

On my own home, I also installed lightning rods (two jobs) and hurricane protection for our windows (two). Almost any home on a canal or other body of water will install bulkheading, which can bring at least four more jobs to the table.

Finally, depending upon the contractor, equipment such as trailers, Lull machines, which can lift loads such as drywall or heavy pumps, and even small Bobcats are rented from local companies supplying such services, adding three more jobs.
Thus, with these very common options, our modest home could add another 34 jobs, for a grand total of 219.

So now, we’re done

The point of this series was several-fold. One reason we undertook this research was simply to satisfy an intellectual curiosity.

As a lender, I constantly visited construction sites to approve draw requests from construction loans as the house progressed. I was amazed to find two dozen or more workers swarming over a house during some of those visits. Secondly, I wanted to bring home one of the main reasons the local economy entered a recession two years before the rest of the country and why we are still struggling today.

When we talk about jobs, it is important to understand that our middle class is not the same as in larger cities. There are no corporations, military bases or sprawling suburbs to support our local population. Private sector jobs are spread between low-paying retail and restaurant gigs and blue-collar trades workers, as well as the white collar workforce, which supplies finances, sales expertise and legal work.

When the economy goes sour, its not just the “big dogs” who suffer. For every allegedly wealthy general contractor not building a house, 200 or more “regular” guys and gals are reliant on a stable housing industry to pay the bills. These are households that generally earn no more than $50,000 a year and live in homes on the west side that are now selling for $200,000 or less.

We may complain about overdevelopment and too many houses cluttering our island paradise. But there is a price to pay when the pendulum swings the other way. We should keep those folks in our thoughts.