Construction Industry Calls for Immigration Reform Amid Persistent Labor Shortages

Construction industry lobbyists are calling for immigration reform to help with the industry’s dire labor shortages, but most don’t expect any progress on the hot-button political issue any time soon. Billions of dollars in federal funding are expected to flow to infrastructure projects in the coming years, and the labor shortages in construction are already a big problem. The trade group Associated General Contractors of America reported in a recent survey that 91 percent of construction firms are having trouble filling open positions. Many estimate that more than 400,000 construction jobs are currently unfilled.

The U.S. Citizenship and Immigration Services faces a backlog of work permits close to 1.5 million. The Biden administration is pushing to extend the timeline for expired work permits by 18 months to help reduce the impact of labor shortages. Any long-term fixes to U.S. immigration policies don’t have very good odds, though, in this current political climate. Republicans and Democrats in Congress are far apart on how to fix the issue, and efforts to overhaul the immigration system have been debated for years but have frequently fallen short.

Construction labor shortages affect many industries, including commercial real estate. Labor shortages, supply chain problems, material price increases, and permitting issues have led to a whopping 90 percent of developers reporting construction delays to the National Multifamily Housing Council in September. Building developers experiencing all these cost increases will likely need to borrow or raise more capital, which will build into the future sales prices of new real estate assets. Unfortunately, these persistent challenges in real estate development show no signs of slowing down.

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