CL James Hollingsworth Letter 2005
It seems that every few years there is a proposal to license or to "register" contractors. On the surface this always appears as a good idea, to somehow identify contractors so that we can prevent fraud. But, when we dig deeper we realize that contractor licensing alone will not prevent fraud, as shown very clearly by the states that presently have licensing. If we really want answers maybe we should find out why the fairly large number of states without licensing have consistently refused to license contractors.
I take a stand against contractor licensing with some reticence because I am a building contractor by profession (DBA as Hollingsworth Enterprises) and one of the chief organizations promoting licensing is the Idaho Building Contractor's Association. I have many good friends in the organization and it is hard for me to oppose those whom I appreciate personally.
But, in this case I feel I must point out some of the weaknesses of any proposal for licensing. First, we in Idaho pride ourselves in the well-known fact that there is more freedom here than in any other state in the union. We are a state of individualists who value our freedom. We work hard to keep government regulations to a minimum. Contractor licensing is a move against that freedom.
The direct result of contractor licensure will be 1) an additional cost of all construction and, 2) an increase of non permitted work. Because many homeowners wish to get the most for their dollar, they will therefore hire the unlicensed contractors who will do non permitted work. Ultimately in many cases this will simply degrade the quality of the work.
- The following are some of the reasons why I am opposed to contractor licensing:
- Licensing of contractors means control. Control of the entire Building Trade through control of contractors.
- Licensing of contractors provides government protection of those who are licensed. This, then, becomes a government-protected market, protecting those who are in from those who are out.
- Licensing of contractors restricts entrance by the new, part time, or marginal contractor. Today a man with a few hand tools and a means of transportation can start a career as a builder. This will not be possible with the advent of licensing.
- Licensing of contractors works a financial hardship for the smaller contractor. As the cost of the license is the same for all builders no matter the size, and since the larger builders often already have all the requisite insurance etc., this then falls more heavily on the smaller builder who must pay for all these things for the first time.
- Licensing of contractors makes it difficult for the builder who does part time construction or construction only infrequently. Some builders may only do a major job once every couple of years. This will make it very difficult for them to do so legally.
- Licensing of contractors increases the amount of work done without government authorization. Since there are many people in Idaho who cannot afford expensive contractors, and since there will always be contractors willing to meet their needs, some people will simply ignore the law, both homeowners and builders.
- Licensing of contractors penalizes all builders in an attempt to control the few fraudulent. There are actually very few fraudulent builders in any area in Idaho. Why penalize all to reach just a few?
- Licensing of contractors means that instead of a few being defrauded by the unscrupulous and dishonest, that all are penalized, as every homeowner will pay for the additional expense.
- Licensing of contractors will not guarantee that no homeowner is defrauded. There is nothing in the proposed laws that will prevent fraud; it will only insure that those who operate within the law will be accountable to the State. But these are not the ones the law is designed to reach.
- Licensing of contractors will make the building official a policeman rather than an aid to construction. Often the building inspector is a help to construction as he gives helpful suggestions etc. With the threat to remove the license if things are not done correctly he becomes a policeman.
- Licensing of contractors will increase the size of government, not reduce it. I think we are living in a time that requires a reduction of all levels of government. Licensing of contractors will therefore be counterproductive.
- Licensing of contractors will limit personal freedom, not expand it.
- Licensing of contractors will place a barrier between the builder and his client or potential client. The only way to insure a quality job is to hire someone who you know to be experienced and of integrity. With licensing there will be less tendency to check on the builders history, thus the relationship between the builder and his client will become more impersonal.
- Licensing of contractors will make it more difficult to help a friend with a building project. Presently if your neighbor wants you to help him build his garage, there is nothing to stop you. With licensing he will have to do the job by himself, hire a licensed builder, or be in violation of the law.
- The burden of licensing will fall most heavily on the elderly and the poor who are presently utilizing less expensive labor. With licensing most of this labor will legally no longer be available.
The vast majority of builders, contractors and specialty contractors are hard working, reputable and honest craftsmen. Please do not penalize them in an attempt to reach a few who are not. There is sufficient recourse without licensing. Ultimately, the best protection a homeowner has is to have work done by those who are known to be reputable.
A major reason for fraud is a desire by homeowners to get the bottom dollar price for a project. When a builder's price comes in considerably lower than the other prices the homeowner needs to know why that is so. (It may be a legitimate family business, and when his children help him he can do the job much cheaper.)
Fraud is not common in the building trades. There are very few unscrupulous. But one of the reasons there is some fraud is that the laws against fraud are seldom enforced and the contractor simply moves on and starts over. If we are unwilling to enforce existing laws then passing more laws will not solve the problem.
To those who would seek to license building contractors I would simply say: please do not be quick to force licensing upon all the builders in Idaho. Take time to talk to the smaller builders. It may be an eye opener. And, it may surprise you to know that most of the 16 states without builder licensing have made a definite choice not to limit the free market for builders and homeowners. Maybe we could put this whole issue to rest once and for all and continue to reap the benefits of living in a State which still believes in the freedom of the little guy.
Very Truly Yours,
James H. Hollingsworth