Wednesday, May 31, 2006

Building Costs Could Soar in US

Up to 40 % of new-home construction in the US is being done wholly or partly by undocumented immigrants. Fuentes suspects the percentage in his home state of Texas is closer to 80 %.

36 % of insulation workers, 29 % of roofers, and 28 % of drywall installers are "unauthorized workers."

Big builders don't employ construction workers, legal or illegal. They hire subcontractors that in turn hire the workers who do the actual sawing and hammering. The entire home building business is outsourced. It's unclear whether this setup will protect builders should the feds start enforcing immigration laws more vigorously.

A crackdown on undocumented workers would shrivel an already tight construction labor market. Lee Wetherington of Lee Wetherington Homes in Sarasota, Fla., estimates that 70 percent of the workers employed by his subcontractors are Hispanic immigrants.

If for any reason they lose that work force, we're going to see the time required to build a house double or triple and the cost of new homes increase 30 to 40 %.

If developers find they can't pass along those costs, they may pull back on construction - and fewer new homes could ultimately boost prices of existing homes.


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