Across the housing construction industry, Latino people have become a driving force—they’re laborers, skilled tradespeople, and increasingly, business owners—and they’re establishing a strong presence in construction management. However, Latino people remain underrepresented in leadership positions within real estate development, which limits the full potential of their contribution to increasing our housing supply.
Latino workers make up a third of the construction labor force but are underrepresented in leadership roles
A significant barrier to housing development is the ongoing labor shortage, and Latino people, many of whom are immigrants, have filled many of these roles. Today, Latino people make up more than a third of all construction workers, despite representing just 17 percent of the adult population in the United States. Latino people are the only major racial or ethnic group overrepresented as employees in the construction sector, compared with employment in all sectors.
The share of Latino workers in the construction industry has steadily grown as well, rising 24 percent in 2008. With this increased presence in the industry, Latino business owners have proliferated. Though Latino people remain underrepresented among all business owners, owning just 7 percent of employer firms, they fare better in the construction industry, where they own approximately 10 percent of employer firms. The only other large group better represented as construction business owners compared with all industries are white entrepreneurs.
Despite these strides, there’s untapped potential. To support the growth of Latino construction businesses, the National Association of Hispanic Real Estate Professionals recently launched the National Hispanic Construction Alliance, which seeks to empower construction workers and entrepreneurs by building business capacity, improving access to capital, and fostering new opportunities for growth. Similarly, the National Hispanic Contractors Association was established to advocate for and strengthen Latino contractors, creating a network to help them overcome barriers and increase competitiveness.
Latino leadership in multifamily housing development remains elusive
While these steps have helped grow Latino entrepreneurs’ influence in the sector, they remain underrepresented in leadership positions within residential real estate development. Having representative leadership in these roles is critical to equitably increasing housing supply because developers oversee the process of acquiring land, securing financing, and managing project approvals, which ultimately determines the scope and scale of housing projects.
Our analysis of multifamily housing development in 10 major cities reveals that Latinos are the most underrepresented racial or ethnic group in this sector. In the cities studied—Boston, Chicago, Dallas, Los Angeles, Miami, Nashville, Phoenix, San Antonio, Seattle, and Washington, DC—Latino people account for about 34 percent of the adult population, yet they own or manage only 5 percent of multifamily housing development entities. Their representation drops even further when considering their output, where they account for just 3 percent of both the number of housing units produced and the total property valuations of those projects.
We also found Latino people have relatively better representation among nonprofit multifamily developer leadership. Although only 3 percent of for-profit developers in our study have Latino leadership, 12 percent of nonprofits do. However, while nonprofits do exceptionally valuable work, they may not offer the same avenues to long-term wealth building for entrepreneurs that for-profit firms do.
Public, private, and philanthropic sectors can support more Latino real estate developers
Latino entrepreneurs have shown an appetite for starting businesses. In 2021, Latinos made up more than half of all new entrepreneurs. With support from leaders in the private, public, and philanthropic sector, Latino entrepreneurs can improve their representation in construction, particularly those with experience in the industry as part of the labor force.
Local business service organizations that provide family-and-friends-style grants, affordable loan capital products, technical assistance, and networking opportunities can partner with Latino entrepreneurs to help with the upfront costs of business ownership. Local governments can ease housing development regulations that are often cost- or time-prohibitive for smaller, younger development entities and can increase the procurement of disadvantaged developers and enforce antidiscrimination regulations through policy reform.
The private and philanthropic sectors can support mission-driven lenders like community development financial institutions in providing affordable capital to emerging developers, especially for predevelopment, where funding is often scarce. Public, private, and philanthropic efforts can also help Latino-led developers build partnerships with established industry players, creating opportunities for joint ventures that foster long-term success.
Ensuring all willing and able entrepreneurs, including Latino people, contribute to our housing supply—not just as workers, but as developers and leaders— will help build a housing ecosystem that advances affordability and better meets the needs of all communities.
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