Last week, McBride & Son, the Chesterfield, Mo.–based builder, sold 41 homes, or nearly double its weekly average so far this year. A big factor contributing to that increase, according to McBride’s CEO John Eilermann, was a unique promotion the builder and nine St. Louis–area trade unions launched this month offering McBride’s buyers cash incentives ranging from $500 to $11,000.
The unions—Carpenters District Council of Greater St. Louis, International Union of Painters & Allied Trades District Council 2, Plumbers & Pipefitters Local 562, International Brotherhood of Electrical Workers Local 1, Sheet Metal Workers Local 36, Greater St. Louis Construction Laborers, International Union of Bricklayers & Allied Craft Workers Local 1, International Union of Operating Engineers Local 513, and Cement Mason’s Local 527—put up $1 million for the promotion, called “The Neighborhoods Built By Your Neighbors.”
Their respective contributions are based proportionally on how many man-hours each trade spends on the construction of a house. The carpenters union, whose members spend between 800 and 900 man-hours per house, kicked in $500,000, says its executive secretary Terry Nelson.
The carpenters union already had a program set up through which it was offering buyers $2,500 purchasing incentives through several area builders. But Nelson gives Eilermann credit for thinking bigger and getting the other unions on board. Eilermann tells Builder that the program came together in less than 45 days.
“We’ve always had a fantastic relationship with our trade partners,” says Eilermann. “And this promotion shows that labor and business can work together. The enemy is the economy.” Indeed, Zanola Company, a market research and real estate services firm based in St. Louis, contends that McBride & Son is the largest residential builder currently using unionized contractors in the United States.
The promotion, which so far is scheduled to run through this month, is first-come first-served and is limited to buyers of homes in McBride’s communities in Missouri. It provides cash they can use at closing, and the amount is based on the selling price of the house. (McBride’s homes range from $80,000 condos to $750,000 single-family homes.) The unions are administering this program, and pay out on certificates that McBride issues to the buyers.
Eilermann says that because buyers receive credit for the cash amount at the closing table, the stimulus is more favorable to them than last year’s federal stimulus for first-time home buyers, whose benefit came only after buyers filed their tax returns.
The unions’ participation in this promotion speaks to the impact that the housing recession has had on the trades. Pat Kellet, business manager for the plumbers union, says 30% of his membership is currently unemployed. Nelson says that residential construction accounts for only 15% of his members’ man-hours, compared to 50% when housing was booming.
“Anything that we can do to stimulate home building is good for us,” Nelson says.
It has yet to be determined whether the promotion will extend beyond August. But Nelson is already talking to other unions about their contributing to another fund, made up of “a penny or two per man-hour,” that home buyers could tap and other builders could offer. Kellet says his union already has set aside money for “market recovery,” and might be open to Nelson’s idea because while the local housing market is better than it was 18 months ago, “I don’t know if we’ll ever get back to the way it was in 2007.”
John Caulfield is senior editor for Builder magazine.
Learn more about markets featured in this article: St. Louis, MO.