Transformer shortage keeping some home-buyers out of their homes
RICHMOND, Texas - As if rising prices and mortgage rates weren't enough of a challenge for would-be home buyers, a surprising shortage is keeping some of them out of their homes.
A nationwide shortage of residential transformers often leads to long delays in getting homes connected to electricity.
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In a Richmond housing development, the sound of busy construction is all around. Some of these new homes are nearly ready to go, while others are in various stages of construction, but almost none of them have any electricity hooked-up, because of the shortage.
While construction crews rely on generators to keep work going, that only goes so far. Transformer shortages spiked during the pandemic. Now, with the vast majority of them manufactured overseas, and a scarcity of specialized components, the National Association of Home Builders says 80% of builders report shortages.
Zulfiquar Karedia is trying to build 40 starter-homes in Northeast Houston, "There is a lot of demand in this market, right now. That's why I'm really anxious and excited to start this."
While the rest of the infrastructure is ready to go at the seven acre development, Karedia believes that CenterPoint Energy is slow-walking approval of his project in order to give time for transformers to be available. For a year, he says there's been a frustrating back and forth to establish easements to power the site, rather than the 'months' he expected.
"If I know that after four months, or five months, I will have the transformers, I don't have to build a house without power," he says.
A utility survey last year found delivery times for transformers were taking a year or more, compared to three months before the pandemic. Conditions may be improving.
In a statement, CenterPoint says, in part, "We have overcome supply chain constraints related to transformers that we experienced in 2022 and early 2023, and do not have any lead time issues currently or in the foreseeable future."
That time, means money.
"If you've already contracted, as a buyer, and nothing is happening, you can't move into that home," says Karedia's property manager Olivia Williams. "Your plans may start to change; people may cancel-out those contracts, because the builder's not ready, and they have the right to do so."
Of Mr. Karedia's complaints, CenterPoint says different configurations of how the property would be used required redesigns for the electricity that were completed in October. Presumably, the easements he needs will soon follow.
Meantime, the National Association of Builders reports, in September, Houston-area builders talked about having thousands of homes that still needed electricity service. Even if the shortage is easing, it will take time to make all those connections.