Homebuilders fear Trump's mass deportations would inflate costs and make it even harder to hire
Andri Tambunan / AFP
- Homebuilding execs say President-elect Donald Trump's deportation plans could worsen a worker shortage.
- The industry heavily relies on immigrant labor and companies are wary of their workforce shrinking.
- Homebuilders and economists have said a deeper labor shortage could cause housing costs to spike.
Homebuilding-industry leaders and economists say President-elect Donald Trump's plans to implement the "largest deportation effort in American history" could kickstart a chain reaction that ultimately sends home prices higher.
The issue is the construction labor force, whose 500,000-worker shortage is already making conditions more challenging. Even fewer workers would mean fewer completed homes. That inventory shortage is then seen driving higher prices.
Since immigrants make up a large part of that group, housing economists and homebuilders worry that deportations and crackdowns could make the ongoing shortage worse, ultimately leading to more price increases.
Foreign-born workers make up about a quarter of the construction workforce. An estimated 15 to 23% of that overall workforce are undocumented immigrants. Foreign-born workers are particularly over-represented in the homebuilding trades, including plastering, constructing drywall, and painting.
Eric Finnigan, vice president of demographics research at John Burns, told Business Insider that if mass deportations happen, a lot of homebuilding, remodeling, and repairing "comes to a standstill and or prices go up by a lot."
Even before concrete action is taken, the mere prospect of a crackdown could scare away workers and hurt the construction industry, economists and homebuilders say.
"The threat of it will be felt immediately and very viscerally among people who are working in the construction sector," Ben Metcalf, a housing policy expert at the University of California, Berkeley, told Business Insider.
"Just even the talk of mass deportations could send a chill through the entire immigrant employment sector," added Jim Tobin, CEO of the National Association of Home Builders.
Trump and Vice President-elect JD Vance have repeatedly pushed back on these notions. From the perspective of housing prices, they have said that deporting immigrants would bring down housing costs by reducing demand for homes.
In a September address, Trump said that Americans shouldn't "ignore the impact" millions of illegal aliens have had on driving up housing costs.
Vance also recently refuted the idea that deportations and tougher immigration would deplete the construction workforce, arguing that there are ample displaced American workers ready to take those jobs.
"One of the really deranged things that I think illegal immigration does to our society is it gets us in a mind-set of saying we can only build houses with illegal immigrants, when we have seven million — just men, not even women, just men — who have completely dropped out of the labor force," he said in the interview.
An uncertain future for immigration
Deportations are logistically difficult and costly, and it's unclear what the full scope of crackdowns will be. During his first term, Trump oversaw an initial uptick in removals, but his administration deported significantly fewer people — about 1.5 million — than former President Barack Obama did. The Obama administration deported 2.9 million people in its first term and 1.9 million in its second, while President Joe Biden is on track to remove about the same number of people Trump did.
Trump also stepped up workplace raids by Immigration and Customs Enforcement during his first term, and his incoming "border czar" Tom Homan recently promised to ramp up raids again. "If you are in this country illegally in six months, pack your bags, because you're going home," Vance said in September.
Beyond mass removals, many employers in the construction industry are also concerned about more restrictive legal immigration policies. Many immigrants working in the industry are protected under certain special legal programs, like Deferred Action for Childhood Arrivals and Temporary Protected Status, which were bolstered under Biden but may be ended by Trump.
"Those programs are particularly susceptible to being terminated very quickly, which would leave construction companies in the lurch," Chad Blocker, a Los Angeles-based immigration attorney, told Business Insider.
A shortage of workers
Some economists disagree with the Trump campaign's argument that deporting immigrants will alleviate housing affordability issues by lowering demand. They argue that the surge in home costs is largely a result of the nationwide housing shortage, and immigrants are a key part of building housing.
Homebuilders pushed back on Vance's comments about a readily available American labor force sitting on the sidelines, waiting for construction job openings.
During the pandemic, many older, experienced workers retired, and the pipeline of younger US-born workers isn't sufficient, homebuilders say. They note that with the rise of remote work and the tech sector, the building trades aren't particularly attractive to younger people.
"You don't have a whole lot of people that want to go up on a roof when it's 120 degrees out there," Dennis Webb, a homebuilder in Phoenix, told Business Insider. "They want to work in an air-conditioned office, and they want to be behind a computer, and they don't really want to do manual labor."
Are you a home builder or immigrant construction worker concerned about shifting immigration policy or enforcement? Share your story with this reporter at erelman@businessinsider.com.