The rapid expansion of AI infrastructure is creating an unexpected new challenge for the U.S. housing market: a growing battle for construction workers. According to Ed Brady, chief executive of the Home Builders Institute (HBI), the country's booming AI data center sector is drawing skilled tradespeople away from residential construction projects at a time when the homebuilding industry is already facing a severe labor shortage. As a result, experts warn that the race to build the facilities powering AI could make it even harder to address America's housing shortage.
"The market is not as strong, and so today many of those people that were in housing are going to these data centers," Brady told The Center Square. He added that the skilled-trades industry was already short roughly 300,000 workers and warned that competition from data center construction was worsening the problem. The surge in demand for AI services has triggered an unprecedented wave of investment in data centers, the giant facilities that house the servers and networking equipment behind artificial intelligence platforms.
CNBC previously reported that technology giants including Amazon, Microsoft, Google and Meta were expected to collectively commit more than $300 billion to AI-related infrastructure and data-center expansion in 2025. That spending has fuelled a construction boom requiring thousands of electricians, plumbers, HVAC specialists, steelworkers and other skilled tradespeople. Many of those workers are being attracted by higher wages and longer-term projects.
According to another report by CNBC, which obtained data from Kelly Services, a construction staffing organization, some workers moving into data-center construction have seen pay increases of between 25 and 30 percent. The competition comes as homebuilders are already struggling to recruit and retain skilled labor. Brady said the industry had been facing workforce challenges for years, dating back to the aftermath of the 2008 financial crisis, when many workers left construction and never returned.
He has also noted that five skilled-trades workers retire for every two entering the profession. Housing experts say the labor squeeze is likely to have real consequences for homebuyers. In a March interview with Homes.com, Brady warned that workers who leave residential construction for commercial projects such as AI data centers may not easily return when housing demand rebounds.
"Residential construction suffers," Brady said, noting that many commercial projects offer steadier employment and, in some cases, better pay. Research cited by HBI estimates the skilled-labor shortage costs homebuilders about $10.8 billion annually and prevents the construction of roughly 19,000 homes each year. The National Association of Home Builders (NAHB) has also warned that data-center development is increasingly competing with residential projects for land.
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