by Thomas Wilson, ncIMPACT Graduate Student Assistant

One often overlooked factor contributing to North Carolina’s housing affordability crisis is a shortage of skilled labor in construction trades. When there are fewer employees in the residential construction industry, homebuilders must raise both wages and home prices to maintain their competitiveness and profitability.

Recognizing this issue’s importance, a group of UNC Chapel Hill Public Policy undergraduates spent the 2025 spring semester investigating skilled labor shortages in partnership with Carolina Across 100’s “Our State, Our Homes” (OSOH) program to meet their capstone requirement. The participating students learned from communities across the state to develop local policy solutions that address skilled labor shortages and contribute to housing affordability.

As the Carolina Across 100 team investigated housing supply challenges while planning the OSOH program, construction labor shortages emerged as a persistent issue across communities in North Carolina. “Homebuilders and construction professionals frequently cite labor shortages as a factor contributing to longer project timelines and rising costs,” said Michael Welker, Director of Policy and Research Partnerships for ncIMPACT.

When the opportunity to work with the Public Policy capstone arose, the Carolina Across 100 team proposed that students investigate this challenge to produce insights for participating OSOH teams. A group of six students volunteered to take on this project: Olly Banerjee, Bryce Jones, Erica James, Grace Davidson, William Achurch, and Yenisel Rojas. The CX100 and student teams collaborated to identify three deliverables to produce as resources for program participants:

• An analysis of the extent of local skilled labor shortages in each OSOH partner county
• Case studies from successful workforce development programs across North Carolina with a focus on construction and skilled trades, and
• Stakeholder identification maps and potential funding sources to help OSOH communities feasibly develop workforce development programs.

The CX100 and student teams agreed that these resources could guide OSOH participants and other communities in addressing a significant issue in housing while also allowing the capstone students to apply their skills as policy researchers. “Students bring remarkable curiosity and creativity to this work, expanding their opportunities for learning while also strengthening support for communities across the state,” said Jacob Hunter, ncIMPACT Lead Data and Policy Analyst.

Framing The Problem

According to the National Multifamily Housing Council, median home prices in North Carolina rose by 63.4% from January 2019 to December 2023. While skilled labor shortages are not entirely at fault for this rise, the National Association of Home Builders found that wage increases and project delays have increased prices by $2,639 per new single-family home.

The students set out to investigate factors contributing to labor shortages in North Carolina as a whole, examining the issue from all angles. Students research revealed that key reasons for shortages within North Carolina may include:

• Recession and COVID-19 impacts: The 2008 Recession decreased home buying activity and led many builders to go out of business, shrinking the construction labor force. More recently, tight labor market conditions following the COVID-19 pandemic made it difficult for employers to find and retain workers.
• Aging workforce: Many skilled trades face a rapidly aging workforce, but younger workers are not replacing their older counterparts quickly enough to meet demand.
• Compensation: Wages and benefits for construction jobs are now less likely to meet expectations of today’s workforce, with 64% of 18-34 year olds seeing health coverage as their most valuable benefit. This is difficult for construction employers who are less likely to provide insurance.
• Labor organizing: Diminishing union strength, especially in right-to-work states like North Carolina, has made it more difficult to attract and retain construction laborers to the field because there are fewer guarantees of protection or benefits.
• Gig work: The rise of gig work in construction has decreased employers’ incentives to train workers as if they were full-time. Today, 42% of employers acknowledge that there is a skill gap for gig-workers in construction.
• Immigration: A sharp decrease in the number of immigrants in the workforce has impacted N.C.’s construction industry, where 29% of employees are immigrants.

In addition to understanding the sources of current construction labor shortages, the capstone team wanted to quantify the extent of the issue for partner communities. The students created an index to assess shortages in particular trade specialties in each of the ten Metropolitan Statistical Areas (MSAs) that contained OSOH communities. This index considered factors like employment growth rate, wage growth, location quotient (the concentration of an industry for specific regions), and labor elasticity (how responsive the labor supply is to changes in wages).

The students’ analysis found moderate to severe shortages in a variety of skilled labor fields across all OSOH communities. Plumbers, pipefitters, and steamfitters were the most likely trades to experience shortages, followed by cement masons, concrete finishers, supervisors, and pipelayers. The most severe shortages included sheet metal workers in the Asheville MSA, cement/concrete workers in the Durham-Chapel Hill MSA, and inspectors in the Fayetteville MSA. While this index provided useful insight for localized shortages, it also showed that skilled labor shortages are happening across all construction fields and regions.

Constructing Success

The students next turned to developing case studies of effective construction workforce development initiatives happening in North Carolina. As they identified promising strategies, the students reached out to these organizations to learn from staff through interviews. In all, five case studies emerged from this process:

1. The Associated Builders and Contractors of the Carolinas offers 4-year apprenticeship programs in Charlotte and Raleigh
2. Goodwill Industries operates construction training programs in Charlotte
3. Hope Renovations, based in Orange County, offers training for demographics traditionally left out of construction labor, like women and other gender minorities
4. NC Edge is a statewide program in community colleges that offers customized training programs based on business needs
5. Charlotte Works helps young adults and unemployed individuals with workforce preparation like interview skills and general readiness training

Grace Davidson, a member of the student team, cited a wage reimbursement initiative operated through Charlotte Works as one of the more interesting cases from the team’s research. The program compensates employers for up to 75% of new workers’ wages during a designated on-the-job training period. “This initiative stood out to me because of its demand-side approach to the labor shortage issue,” said Davidson. “It effectively kills two birds with one stone by simultaneously lowering hiring costs for employers and training new workers.”

Tapping into community-based resources like partnerships and funding opportunities can equip teams to implement programs that resemble the case studies. The students’ final deliverable focused on identifying and mapping these potential partnerships and other resources for OSOH communities. The students combined insights from their labor market research and workforce development case studies to offer research-informed recommendations meant to spark dialogue and guide action. Each OSOH community received its own brief report with local context, potential key stakeholders, and appropriate funding sources.

While the final report specifically focuses on OSOH communities, its recommendations serve as a roadmap for peer communities attempting to find similar partners or funding sources.

Moving Forward

By contextualizing the causes and extent of the state’s labor shortages, highlighting successful examples of workforce development, and providing individual communities with potential
resources, the student capstone team has helped provide meaningful insights for the OSOH teams.

The project also demonstrated the students’ skills, creativity, and professionalism. “We were blown away by the quality and professionalism of the students’ work,” said Welker. The CX100 team was particularly pleased with the team’s creativity and persistence. Welker noted that despite early gaps in available data, the student team ultimately offered multiple forms of analysis to understand labor market gaps in each community, while the localized, team-by-team reports went above and beyond the project’s initial scope.

At the end of the project, the students remained curious about directions to be explored. Davidson pointed to immigration as one potential area for further research. “Given the current political climate, I think it would have been nice to do a deeper dive on the relationship between recent immigration policies and their impact on the skilled trades workforce,” said Davidson.

While Our State, Our Homes is still ongoing, the capstone project provides promising strategies for participating teams and other communities to pursue. Collaboration between partners in construction, workforce development, education, government, and other sectors is critical for helping meet the state’s needs in construction and the skilled trades. Communities hoping to address this challenge would be wise to start with the insights and recommendations of the emerging public policy professionals who completed the capstone project.

Carolina Across 100 is a five-year initiative, led by the ncIMPACT Initiative, seeking to support community-driven recovery and build sustainable efforts in all 100 counties by providing human resources, data insights, coaching, facilitation, coordination efforts, and program design. “Our State, Our Homes” is the fifth program in this larger initiative. Carolina Across 100 is funded by the Office of the Chancellor and private foundations.

The ncIMPACT Initiative coordinates Carolina Across 100. ncIMPACT is a statewide initiative launched by the UNC School of Government in 2017 to help local communities use data and evidence to improve conditions and inform decision making. Visit ncimpact.org.