January 31, 2025

Residents and governments in and around Los Angeles have a long road ahead as they face the need to rebuild after devastating fires swept through the region, claiming an estimated 40,000 structures and 24 lives.

The process will take years and place strain on a construction labor force that is already stretched nearly to the max. Rebuilding homes is likely to drain the scant remains of the area’s construction labor pool, exacerbating delays on other projects.

“There’s going to be a large sucking sound for labor, for talent, for project managers, for plumbers, electricians and graders,” SoLa Impact CEO Martin Muoto said of the labor demands in the Palisades, where his own home burned and where he plans to rebuild.

Nearly 152,000 people work in the construction industry in the Los Angeles area, according to new data from the California Employment Development Department. The industry lost about 1,000 jobs from November to December, mostly in specialty trades.

Nationwide, the construction industry has a 4.6% unemployment rate. In the LA metro, the overall unemployment rate is 5.4%, according to construction cost estimator Cumming Group.

It is a very tight market for construction workers right now in the industry overall, Associated General Contractors of California CEO Peter Tateishi said. The industry is getting by with what it has for now, but a flood of new projects, combined with workers leaving the workforce, means that won’t last for long.

“We can meet the demand of today,” Tateishi said. “What we’re not able to do, with retirement and aging out of our construction workers, is meet the demand of the future.”

The AGC represents workers on primarily commercial projects, large undertakings including hospitals, retail projects and infrastructure. Tateishi’s organization was already aggressively trying to recruit new people.

If there is a need and urgency to rebuild homes and not enough workers, Tateishi said he anticipates some commercial construction workers would take up the mantle and work on houses.

Rebuilding efforts are unlikely to be entirely equal on the two sides of Los Angeles County that suffered the worst fire impact. On the Westside, wealthy areas like the Palisades are home to affluent business people and celebrities. But on the east, where Pasadena and Altadena were burned, the populations are generally working and middle class.

This dynamic sets up the likelihood that the wealthier residents will shell out for in-demand workers to get their homes rebuilt more quickly, causing greater delays for those living on the east side.

“People are already fighting for labor, and what we saw previously [in other postfire rebuilds], and what we’ll see again, is wages for labor will be impacted because subcontractors will try to attract labor,” said Trevor Shulters, southwest regional director of cost management at Cumming Group.

A few industry insiders who spoke to Bisnow also touched on another unknown: the extent of President Donald Trump’s promised mass deportations of immigrants lacking permanent legal status. If they are carried out in Southern California, the reduction in the construction workforce would be notable.

In the case of rebuilding after other massive California fires, such as those in the Santa Rosa area of Northern California, construction workers came in from out of the region and out of state and temporarily lived in the area while they were at work. But the Los Angeles metro area is enormous comparatively and is already home to a significant number of potential workers, though they may not specialize in residential construction.

“There’s going to be a boom in [residential postfire rebuilding] in the foreseeable future, but where they’re coming from is still to be determined,” Shulters said.

One developer who has ongoing and planned projects is already working to ensure he has the workers he needs to stay on track.

“We’re shoring up our relationships,” Muoto said, referring to the relationships his company has with its contractors.

But he said that labor, like any other high-demand item on a construction project, would be more costly during the rebuilding process.

The details of how the existing labor crunch impacts the ultimate rebuilding effort are still years away from playing out, and what happens will depend on several things, including the timing of rebuilding projects, as not every home will be under construction at the same time.

“It’s certainly going to be more expensive. And it’s not a private price-gouging thing — it’s just markets,” Muoto said. “If there’s a credible demand for skilled plumbers, the price of plumbers goes up.”