The failure of Congress to pass meaningful immigration reform is starting to hurt some home builders, especially in states with strict new laws such as Arizona and Oklahoma.

Builders in those states report that “get tough” laws passed by the state legislatures caused widespread panic. In some cases the immigrants fled to other states or back to Mexico. As the labor supply dwindled, builders were forced to delay projects and increase prices, often by as much as 10 percent.

“My old painter used to have 15 guys; now he's down to seven people,” says Glenn Shaw, president of Shaw Homes and president of the HBA of Greater Tulsa.

The Tulsa, Okla., region has been the epicenter of immigration problems for home builders and subcontractors. Oklahoma's law, which went into effect Nov. 1, makes it illegal to transport undocumented workers, and also requires employers to verify the legal status of workers.

Dramatic Impact

Public benefits previously available to undocumented immigrants, such as in-state tuition at state colleges, are harder to obtain. In-state tuition is now available only to children of undocumented immigrants who have lived in the U.S. for more than two years, graduated from an Oklahoma high school, and document having applied for citizenship.

Fearing reprisals from local officials, roughly 25,000 to 30,000 Hispanics left the Tulsa region in the past several months, and the mass exodus has had an effect. A survey conducted by the Greater Tulsa HBA found that 80 percent of builders and subcontractors surveyed have lost workers, and that the average loss is about 20 percent of the work crews. According to the survey, 55 percent are experiencing delays of weeks due to the loss of the labor force, while another 43 percent are experiencing delays of days; 81 percent say they will lose more workers in the future because of the current law.

A statewide survey conducted by the Oklahoma HBA shows that 76 percent of home builders believe they will lose workers if Oklahoma's immigration law stays in effect. As of mid-December, a lawsuit contesting the Oklahoma immigration law by the National Coalition of Latino Clergy & Christian Leaders was pending.

INCREASED LEGISLATION Not every state has experienced as much tension as Oklahoma. Business is so bad in states such as Colorado and Georgia that home builders there don't report much negative news regarding immigration legislation. But it may affect everyone eventually, as immigration remains a front burner issue in state legislatures across the country.

The National Conference of State Legislatures (NCSL) reports that as of mid-November, 1,562 pieces of legislation related to immigration had been introduced among the 50 states in 2007. Of those bills, 244 became law in 46 states.

Also according to NCSL, the laws cover every policy area, including employment, health care, identification, driver's and other licenses, law enforcement, public benefits, and human trafficking.

Learn more about markets featured in this article: Phoenix, AZ.