It is difficult to read a newspaper or turn on the television without seeing widely disparate views on the immigration issue.
Some want to close our borders and treat illegal immigrants as terrorists, arresting them on the spot and charging them with felonies. Others want to make guest laborers legal and grant citizenship to a large number of illegal immigrants. (See “Immigration Catch-22,” page 46.)
Amidst the confusion of rhetoric, emotions, politics, and policy, there is one irrefutable truth: Immigration, both legal and illegal, is important to the building industry on two fronts. Its effect on the labor pool is the most obvious. But a less discussed effect is on demand for new homes.
During the next 10 years, the Joint Center for Housing Studies at Harvard estimates the between 13.4 million and 14.5 million new households will be formed. Those numbers assume immigration will continue.
What does all of this mean on the ground? In places such as Austin, Texas, where there are an estimated 70,000 illegal workers, the immediate answer is clear. If the illegal workers go away, the economy will suffer. Fewer people will be able to buy homes because prices will climb thanks to increased labor costs and, in the short term, longer cycle times because of inexperienced workers.
But there are more long-term concerns looming for builders. What if the U.S. government decides to pursue payroll and other taxes that weren't collected from immigrants? And, if the government does choose to take that route, how will they determine who was the actual employer? Would it be the subcontractor, or would there be an attempt to tag the builder as the true employer?
Obviously there are more questions than answers swirling around this issue now. But what can you do in the short term?
Know your supply chain and how the products move through the system. Evaluate your dependency on illegal labor and have a plan in place to protect yourself from legal liability. Contact an attorney and ask for a review of your operation. Develop a plan with your purchasing and construction staffs to reduce liability and help keep your business running as the politicians change the balance of labor and demand in your market.
Also, if you haven't already, look to figure out ways to better tap into the immigrant home buying market. Get to know your customers. How many of your homes are sold each year to immigrants? Where do they come from and how can you make your homes more attractive to these customers. These should be excellent ways for you to improve your designs, options, and marketing so that this group will give you more margin on every house that you build.