Despite the fact that it could open the door to homeownership for millions of recent immigrants as well as help alleviate the current labor shortage, President Obama's executive action on immigration was met with disappointment from the building industry today.
Two industry associations see the president’s controversial policy changes on deportation as something that will slow momentum toward a long-term resolution on immigration, not hasten it. The Associated General Contractors of America, which has supported comprehensive immigration reform since the Bush administration and backs a path to citizenship, criticized Obama's decision.
“What is unfortunate about the president’s unilateral action is that he offers a temporary solution while claiming to seek permanence,” the group said in a statement on its site. “His action makes bipartisan reform more difficult to achieve and likely endangers other legislative initiatives that require bipartisan solutions and cooperation between the Congress and the administration. AGC urges the president to allow the legislative process to play out and avoid making unilateral policy changes that fail to offer employers and their workers a long-term, permanent solution to our nation’s broken immigration system.”
The NAHB, which has been working for immigration reform for over a decade, was disappointed by Obama’s actions, saying a long-term, permanent, and all-encompassing solution is needed. NAHB president Kevin Kelly, a home builder and developer from Wilmington, Del., worries that the executive action could be overturned by a future administration, which puts employers in a precarious position with regard to uncertain employment verification requirements.
Suzanne Beall, the NAHB’s federal legislative director, sees the order as a “temporary patch for a portion of the undocumented workforce that is already here.” She says the only way to true immigration reform as it relates to home building is to change the legal visa system, which only Congress can do. Currently there is no current visa program for workers who want to work in construction, she says.
More than 135,000 immigrant workers entered the labor force in 2005, dropping to 23,000 during the recession. “We need a legal avenue for those folks to come in,” she says.
Beall thinks that the president’s solo actions could end up “driving a wedge” between the White House and lawmakers, pointing to action undertaken by Sen. Jeff Sessions (R-Ala.), who has called for a lawsuit against the executive order.
However, not everyone is looking down on the plan. Labor expert Martin Freedland thinks the president’s actions will have a positive impact on home building. “Builders have a huge need for access to more labor; the U.S. population demographics are very unfavorable unless we increase immigration,” he says.
Immigration is a crucial issue for the construction industry, which is facing labor shortages across the country that are impeding the housing recovery. The number of open, unfilled construction sector jobs increased 57 percent from June 2012 to June 2014, according to the BLS Job Openings and Labor Turnover Survey (JOLTS). NAHB surveys show that shortages of skilled labor are driving up costs and impeding a more robust housing recovery. Forty-six percent of the builders surveyed experienced delays in completing projects on time. Fifteen percent of respondents had to turn down some projects, and 9 percent lost or canceled sales as a result of recent labor shortages. Trades with a high concentration of immigrant workers also tend to have more vacancies and labor shortages, according to NAHB data.
Immigrants also are vital to the demand side of housing, and Latinos could transform the housing market. From 2010 to 2020, Hispanics likely will account for 180,000 to 220,000 new homeowners per year, according to the Urban Institute. That number will grow even further in 2020s. Though there are some major headwinds, most notably media income that fell 9 percent for Hispanic families since 2010, indications are Hispanics will provide a boost to the home building industry.
BUILDER approached a number of home builders to comment on President Obama's decision but they all declined comment.
An earlier version of this story contained an error about the ramifications of the executive order. The current post reflects a clarification on that point.