The Impact of Immigration Enforcement on Home Construction
The following article was authored by Loren Steffy:
In Jacksonville, Florida, the labor to frame a typical 2,500-square-foot house used to cost a builder about $10,000. Today, according to one local builder, it runs $25,000 to $28,000. Framers who earned roughly $20 an hour are now getting $40 to $45, according to The Wall Street Journal.
This summer’s surge in immigration arrests is devastating home construction nationwide. ICE made more arrests in June and July than in any other month of the second Trump administration, and the effect on building sites showed up fast. The share of builders who said immigration enforcement was affecting their workforce climbed from 13 percent a year ago to almost 66 percent in September, according to a survey by John Burns Research & Consulting. As recently as last year, the problem was largely confined to regions like South Texas. Now it’s become "ubiquitous," the chief executive of the National Association of Home Builders told the Journal.
The labor squeeze shouldn’t surprise anyone following this newsletter. Immigrants make up about a quarter of the construction workforce, and I’ve argued for months that removing them in the middle of a housing shortage is a self-inflicted wound. But the consequences of enforcement-only policies are now hurting one of the industries that once benefited the most from our broken immigration system.
Demand-Side Theory vs. Reality
Immigration-enforcement advocates told the Journal that deportations will bring housing costs down by removing competition for homes. Builders, they say, should simply hire U.S. citizens.
In theory, fewer people means less demand for places to live, which should ease pricing pressure on housing. This theory might hold if immigrants were just renters or buyers. But they aren’t. They are also a vital source of construction labor.
For 18 years, Eddy Velazquez did siding, framing, roofing, and remodeling in Florida, typically working on about 10 homes at any given time. He was pulled over on his way to a job in March and deported to Mexico six weeks later.
Removing Velazquez eliminates one household from the demand side, but it also removes skilled labor from 10 houses on the supply side.
As I pointed out in writing about the fallout after ICE agents killed Houston house framer Lorenzo Salgado Araujo this summer and detained his crew, it doesn’t stop with one phase of the job. Removing a framing crew ripples through the entire process. The roofer can’t start until the framer finishes. The drywall crew waits on the roofer. While each stage waits on the last, the builder keeps paying for insurance, equipment rental, site management, and interest on the construction loan. One Jacksonville builder described national builders missing projections with "slabs sitting on the ground and no one to frame." Every one of those empty slabs was supposed to be a home.
Deportation may trim housing demand, but it idles supply at the same time. The more enforcement intensifies, the more the numbers grow in the wrong direction.
The NAHB says labor costs rose a median 4.2 percent nationally in the past year, and in areas such as Jacksonville, subcontractors report losing as much as 70 percent of available crews and paying those that remain double. Those higher costs all end up in the price of the finished home — at a time when higher interest rates are already making housing less affordable for many Americans.
A Persistent Trope
I’m not surprised the "just hire Americans" trope persists. It’s a variation of the myth that immigrants take American jobs, a fallacy that has shaped our immigration policy for 150 years or more.
Builders have been trying for decades to hire more Americans. They embraced vocational programs in high schools and junior colleges, they started training programs in prisons so inmates would have jobs on release, and they tried to recruit women to construction jobs. Some of these programs are successful but even combined they don’t come close to meeting the demand for skilled labor.