After years of underbuilding, the country faces a housing shortage estimated at 3.7 million units, pushing home prices and rents to record highs. But one of the biggest obstacles to building more housing is a shortage of construction workers, which is slowing down projects and driving up labor costs.

As of last July, industry groups reported that 248,000 construction jobs remained unfilled, despite high unemployment in some areas. And these groups expect the construction sector to need nearly 454,000 new workers on top of normal hiring to meet demand in 2025.

Immigrant workers have been essential in filling this gap. According to our analysis, immigrants made up more than 23 percent of the construction workforce in 2023. It’s estimated that about half of them are undocumented immigrants. The Trump administration’s proposed mass deportation of undocumented immigrants would worsen the worker shortage—deepening the housing crisis and undermining the administration’s goals to “lower the cost of housing and expand housing supply.”

Texas and California are at the highest risk of construction labor supply shortages

New evidence that stricter immigration enforcement reduces housing construction is emerging. During Trump’s first term, the Secure Communities program, which implemented stricter immigration enforcement, led to lasting declines in construction labor and homebuilding and rising home prices, according to one study. The researchers also found that undocumented workers complement rather than substitute for US-born workers, so deportations led to net job losses for US-born workers. 

Often, undocumented workers handle the lower-skill jobs in a housing construction project (e.g., general labor), but if those jobs aren’t done, then there isn’t demand for the higher-skill jobs more commonly done by US-born workers (e.g., electrician or plumber). Further, there is no evidence that the recent increase in immigrant numbers is the cause of our current housing market strain, nor is there any research showing that mass deportations would free up housing and lower costs.

Yet we do see evidence that deportations would hurt the housing markets in states with high numbers of foreign-born workers. According to our own analysis, Texas and California account for more than 1.1 million foreign-born construction workers (with either undocumented or lawful status), representing 37 and 39 percent of their overall construction workforce. Other states with large populations of foreign-born construction workers include Florida, New York, and New Jersey. In these states, 1 in every 3 construction workers were born outside the US. In Nevada, Maryland, Connecticut, Georgia, and Washington, DC, we found that 1 in 4 construction workers were born outside the US.

The Center for Migration Studies estimates that 54 percent of foreign-born construction workers are undocumented. Deportations then could cause the US to lose between 1.7 and 1.8 million undocumented construction workers. In Texas alone, the American Immigration Council estimates that 23 percent of all construction workers are undocumented, putting the state’s construction industry at risk of losing up to 337,000 workers.

The risk extends beyond undocumented workers and those with lawful status facing potential deportation under current proposals. In a climate of heightened enforcement, workers who were born in the US, are naturalized US citizens, or are green card holders may also fear racial profiling and enforcement risks for themselves and family members. In recent weeks, immigration enforcement authorities have appeared in a variety of community spaces—workplaces, schools, and places of worship—causing widespread fear. Some reports say employees are afraid to show up for work, and there is one report of a US citizen being detained in worksite enforcement activity.
 

Deportation-induced labor shortages in construction risk worsening the housing shortage

Around 42 percent of construction workers currently work in residential construction, meaning mass deportations causing labor shortages would significantly decrease the supply of new homes.

Already, the US has underbuilt housing units compared with its population growth. According to our analysis, between 2010 and 2023, the number of households grew by 13 percent, while the number of housing units increased by only 10 percent. This gap likely understates the true housing shortage, as it does not account for supply shortages that existed before 2010 (after the Great Recession), nor does it account for units that have become uninhabitable.

Arizona, Nevada, Maine, and Florida have fallen the furthest behind in housing construction and would face major challenges to building enough housing if construction labor shortages intensify. Florida and Nevada are particularly vulnerable, given their high shares of foreign-born construction workers, many of whom could be at risk of deportation.

Immigrant workers are vital for housing markets and the economy

As the administration expands its enforcement activities, families and communities across the country where immigrants are vital members of society and the workforce will inevitably be harmed. Some workforce effects will be immediate and disrupt productivity, but others will cause downstream effects, such as large labor shortages that cause housing construction slowdowns. It will be important for leaders in the public and private sectors to monitor not only the human impacts but also these broader reverberations and disruptions to economic activity at state and local levels.

Housing is critically scarce and expensive, and the mass deportation of essential workers would exacerbate the crisis. The path forward does not require choosing between enforcing immigration laws and ensuring housing abundance—we can do both. A balanced approach could create an immigration system that upholds the rule of law with long-term paths toward lawful status for undocumented workers while recognizing the vital role immigrant workers play in the construction labor force.