Increased deportations may worsen America’s housing affordability crisis by reducing the construction workforce and slowing down new home building, according to research from the University of Utah.
The study, examining nationwide data, found that removing undocumented workers from the construction industry leads to significant reductions in residential construction and higher home prices, contradicting claims that immigration enforcement would make housing more affordable.
“We’re able to show that when you increase immigration enforcement, you do in fact generate a reduction in the number of individuals who are supplying labor to the construction industry in a given county,” said Troup Howard, assistant professor at the University of Utah’s School of Business. “We show that those reductions in workforce are associated with a large decline in homebuilding.”
The research comes as housing construction remains sluggish compared to historical norms. Since the 2008 financial crisis, new home construction has struggled to recover – the peak year for new homes barely matches the lowest point from the five decades before the Great Recession.
While many experts have focused on zoning laws and regulations as key factors limiting housing supply, this study highlights labor availability as a critical but often overlooked constraint. The findings suggest that losing immigrant construction workers creates ripple effects throughout the industry that ultimately reduce housing production.
The researchers analyzed what happened in counties after they implemented the federal Secure Communities program, which enhanced immigration enforcement starting in 2008. By studying counties that adopted the program at different times, they could isolate the specific impact of increased enforcement on local housing markets.
The results paint a stark picture: Over a four-year period after implementing stricter enforcement, the average county missed out on about a year’s worth of normal construction activity. Even more concerning, when undocumented workers were removed, their positions often went unfilled.
“Say two jobs get vacated because workers are removed from the country. One of those jobs is going to be filled by an American, the other one doesn’t get filled,” Howard explained. This labor shortage particularly affects entry-level construction work, which then reduces opportunities for more skilled positions.
“You need someone to come in and frame the house before you need the relatively higher skilled plumbers and electricians to come in and finish the house,” Howard noted.
The study challenges another common assumption – that deporting undocumented residents would free up housing and reduce costs through decreased demand. While deportations did create some vacant housing initially, the research shows this effect was temporary and quickly overwhelmed by reduced construction of new homes.
These findings arrive as U.S. housing costs continue rising and new construction lags behind population growth. The research suggests that immigration policy changes could have unintended consequences for housing affordability, particularly if they reduce the construction industry’s capacity to build new homes.
The study, titled “Cracking Down, Pricing Up: Housing Supply in the Wake of Mass Deportation,” was conducted by Howard along with economists Mengqi Wang of Amherst College and Dayin Zhang of the University of Wisconsin-Madison.