Construction job site raids and heightened scrutiny by the Immigration and Customs Enforcement (ICE), the investigations unit at Homeland Security Investigations, are not new.

But while, in the past, they cast an outsized cloud of anxiety and uncertainty over U.S. homebuilding's hive of residential construction workplaces, they were not common.

That could change. In short order.

Following the November Presidential election, the U.S. homebuilding and residential construction sectors, already struggling with chronic labor shortages, may soon face an unprecedented challenge.

A proposed presidential campaign promise to deport all undocumented immigrants, using the full force of federal agencies, threatens to dismantle the workforce that powers the nation's housing market. Former president Donald Trump's plan for the "largest deportation operation in American history" could plunge the U.S. construction industry into a labor crisis not seen since the 1950s.

Drawing on recent data from the Fall 2024 Home Builders Institute (HBI) Labor Market Report, the March 2024 National Association of Home Builders (NAHB) analysis, and historical examples of deportations' long-term consequences, this editorial examines the potential devastation such an action could cause for homebuilding.

The Current State of the Construction Labor Market

According to the Fall 2024 HBI report, there are 8.3 million payroll construction workers in the U.S., with 3.4 million employed in residential construction. Immigrant workers make up 24.7% of the overall construction workforce, with even greater dependence in residential construction trades, where 31% of workers are immigrants. These numbers underscore the industry’s reliance on foreign-born labor, especially in critical trades such as carpentry, roofing, stucco, and drywall installation.

The March 2024 NAHB report further underscores the critical role immigrant workers play in construction trades. For example, immigrants account for 64% of plasterers and stucco masons, 52% of drywall installers, 48% of painters, and 47% of roofers. Additionally, 41% of all laborers and a third of all carpenters are foreign-born. These trades are already facing significant labor shortages, making the industry particularly vulnerable to a mass deportation scenario.

The NAHB notes:

Supported by a substantial increase in immigration to the United States since 2022, labor shortages in construction have eased but remain elevated."

Historical Precedents and The Deportation Proposal

Depending on the election's outcome, if Trump's plan were implemented via executive order, it would trigger a dramatic labor shortfall for the construction industry, which already faces capacity constraints. As

Axios reported on September 28, 2024, historical precedents such as President Eisenhower’s "Operation Wetback" in the 1950s resulted in the forced deportation of over a million Mexican workers. This operation caused long-term disruptions in industries like agriculture and construction, as entire sectors struggled to replace their labor force.

A similar scenario today would have catastrophic effects on the U.S. housing market, which is already grappling with a deficit of 1.5 million homes, according to NAHB estimates.

Adding further concern, my 2017 piece in BUILDER about Immigration and Customs Enforcement (ICE) raids on construction job sites highlights the potential for immediate and disruptive enforcement actions. In that article, we reported on ICE’s intensified focus on construction jobs, with audits, inspections, and job site raids targeting employers. One homebuilding executive, when contacted by ICE, expressed uncertainty about the status of subcontracted trade crews—many of whom are immigrants.

More than one of every four people currently working on construction job sites could be at risk," we reported, warning that construction firms could be severely hampered by labor shortages."

State-Level Impact: A Labor Crisis in Key Markets

States with the highest concentrations of immigrant construction workers would feel the brunt of a mass deportation. NAHB data from March 2024 shows that California and Texas each rely on immigrants for nearly 40% of their construction workforce. Florida and New York are also heavily dependent, with immigrant workers comprising 38% and 37% of their respective construction labor forces. The loss of these workers would have an immediate and severe impact on housing production in these key states, where demand for new housing is already high.

More than half of all immigrant construction workers reside in just four states—California, Texas, Florida, and New York—making these regions particularly vulnerable to the fallout from mass deportations. However, reliance on foreign-born labor is growing beyond these traditional immigrant hubs, with states like Maryland, Nevada, and Arizona seeing immigrant workers making up more than a quarter of their construction labor forces. These states would also experience a significant slowdown in housing projects, as builders scramble to replace a large portion of their workforce.

Worsening The Housing Affordability Crisis

Labor shortages are one of the key drivers of the ongoing housing affordability crisis in the U.S. The HBI report reveals that wages for homebuilding workers rose by 9% in June 2024 due to labor shortages. Without immigrant workers, this wage inflation would accelerate, pushing construction costs even higher and exacerbating the housing affordability problem.

The NAHB's March 2024 analysis highlights that the construction industry needs to hire approximately 723,000 workers annually to meet housing demand and replace retirees or those leaving the industry. With 248,000 open construction jobs at present, a mass deportation event would only deepen this gap, leading to increased delays in homebuilding and price hikes for new homes.

In fast-growing states like Florida and Texas, the deportation of immigrant workers could have a disastrous effect on the housing market, pushing home prices higher and delaying new housing starts. Florida, in particular, has seen explosive demand for new housing as its population grows. With 466,000 residential construction workers, many of whom are immigrants, the state cannot afford the loss of this critical labor pool.

The Industry's Critical Business Risk

For U.S. homebuilders, a mass deportation event presents a significant business risk. In my earlier article, I warned of the potential impact ICE raids could have on homebuilding job sites. Builders must now consider the broader consequences of mass deportations across the industry. Not having predictable access to skilled construction crews is already a known risk to builders' business plans. The loss of 31% of the construction trades workforce could lead to severe delays, increased costs, and an inability to meet housing demand. These labor shortages would not only slow construction but also ripple throughout the residential development ecosystem, affecting subcontractors, suppliers, and manufacturers.

The March 2024 NAHB report also warns that labor shortages in specific trades such as finished carpentry and masonry are already acute, with 65% of builders reporting shortages in these areas. With many of these workers being immigrants, their removal from the workforce would make it nearly impossible to complete housing projects on time and within budget.

Conclusion: A Crisis That Must Be Averted

The U.S. homebuilding and residential construction sectors are already facing significant challenges due to labor shortages and rising costs. A mass deportation event, as proposed by Trump, would push the industry into a full-blown crisis. The loss of nearly a third of the construction trades workforce would not only delay projects and raise costs but also worsen the housing affordability crisis. Homebuilders, developers, and industry leaders must recognize this as a critical business risk and advocate for policies that support the workforce, including immigrant labor.

A policy statement on the NAHB website declares "Immigration Reform is Key to Building a Skilled Workforce."

Reforms to the immigration system are an important component in workforce development, because the immigrant workforce plays a critical role in meeting the nation’s housing needs. In fact, immigrants account for 30% of all workers in construction trades, according to data from the U.S. Census Bureau.

Ensuring a consistent, reliable influx of new workers is important in an industry that is continuing to grow. Even as we encourage America’s youth to consider careers in the building trades, we must also pursue immigration policies that complement ongoing vocational training efforts and help fill labor gaps to ensure that the nation has a workforce that can meet its housing construction needs.

NAHB supports immigration reform that protects the nation’s borders. In addition, it must:

Ensure that employers continue to be responsible only for verifying the identity and work authorization of their direct employees – and not the employees of their subcontractors.

Create an efficient temporary construction industry guest-worker program that allows employers to recruit legal immigrant workers when there is a shortage of domestic workers.

The H-2B Temporary Guest Worker Program has allowed some employers with peak, seasonal labor needs to secure additional workers to supplement their regular employees. Learn more about the program.

Domestic workforce development is crucial to the future labor needs of the construction industry, but in the interim, Congress must approach immigration reform under the lens of American employers' urgent labor needs.

The path forward for the construction industry must involve a balanced approach to immigration policy, workforce development, and technology adoption to reduce the reliance on on-site labor. Without immediate action, the consequences of mass deportations could reshape the housing market in ways that would take decades to recover from.