Deconstruction of Milwaukee homes provides benefits, but at a higher cost

Cream City Wrecking & Dismantling’s Liz Howell lifts a portion of a house at 1315 W. Chambers St., Milwaukee, that was dismantled in 2013. (File photo by Kevin Harnack)

An experimental program that often employs ex-convicts to deconstruct abandoned houses in Milwaukee provides valuable apprenticeships to city residents and salvages useful materials but also threatens to cost twice as much as standard mechanical demolition.

On Monday, Milwaukee’s Special Joint Committee on the Redevelopment of Abandoned and Foreclosed Homes, heard testimony from representatives of a local company, WasteCap Resource Solutions, concerning the company’s efforts to hire workers to manually dismantle vacant and abandoned houses.

The workers — many of them ex-convicts who are seeking apprenticeships in the construction industry — are paid $16.50 an hour, according to Joe Liebau Jr., executive director of the company. The city, meanwhile, earns 25 percent of the revenue from the salvaged materials that are sold to contractors.

Alderman Robert Bauman, co-chair of the committee, heralded the program as the “gold standard” for its ability to salvage materials, create jobs, train hard-to-employ residents and remove blighted properties. With only about a dozen deconstructions performed in the city since the program began around 2009, Bauman sees room for expansion.

“To see these workers, all city of Milwaukee residents, all folks who sure have had difficulty entering the workforce given their prior criminal records, working very industriously on this project,” Bauman said, “it almost brings tears to your eyes.”

But whereas the rough cost of a mechanical home demolition is $15,700 in Milwaukee, a deconstruction can run as high as $40,000, according to Thomas Mishefske, operations manager for the city’s Department of Neighborhood Services. And before work begins, asbestos abatement and utility disconnection — procedures often needed to protect workers — can tack on an additional $4,500 to $5,500.

The city can receive as much as $1,000 from salvaged materials sold to contractors, and a request for bids involving a larger number of homes could lower the cost of each individual deconstruction, Mishefske said.

Still, the price difference did not go unnoticed.

“It takes twice as long and costs twice as much,” Roger Hajek, general manager of Menomonee Falls-based Cream City Wrecking & Dismantling, said. “Mechanical’s faster: one guy’s doing the job; you’re in and you’re out in two days. With deconstruction, seven guys are on the site, and the job takes a week. We do it both ways, but there’s a world of difference.”

Nonetheless, Liebau said the demand for materials is strong. Salvaging, he said, not only leads to reduced costs at large-scale construction projects but also helps to train a new crop of workers.

“We’ve worked with large contractors for a number of years. … They had a hard time finding workers,” Liebau said. “In deconstruction, … you’re learning how something is put together.”

WasteCap’s current contract with Milwaukee has employed 24 local workers, and the company plans to hire several more to handle internal operations. In 2014, Milwaukee allocated $300,000 toward the deconstruction of 15 houses, which was awarded to several companies. Art Dahlberg, commissioner of the city’s Department of Neighborhood Services, testified at the hearing that 493 properties are expected to require demolition this year. Largely because of the likely cost, that is too many to knock down using manual labor, he said.

As Dahlberg’s department looks for ways to make manual demolition as inexpensive as possible, Bauman said the program’s true cost is far lower than listed.

“It all depends on how you define cost,” Bauman said. “There are all kinds of external costs that are incurred with the current process of mechanical demolition, in addition to many opportunity costs, such as employment not obtained, training not accomplished, usable materials not saved.”

Alderman Nik Kovac said there are advantages to manual demolition that would obviously benefit the city — such as increased employment and a better-trained workforce — but are difficult to account for in a budget.

The committee will reconvene in September to discuss the program further.

Editor’s Note: This story was updated July 29, 2015, to say that Milwaukee awarded WasteCap Resource Solutions $300,000 to deconstruct 15 houses in the city. The money was allocated by the city for deconstruction, and was awarded to several deconstruction/demolition companies.