Immigration Hurdles Hampering Property & Tech Sectors Demand Solutions

Interested in Learning More About PropTech?

Contact us today and we will be happy to chat with you.

Contact us

Immigration Hurdles Hampering Property & Tech Sectors Demand Solutions

March 1, 2024
Read Time:

The construction industry shapes the world around us, but in recent years the United States’ immigration policy has become a pressing issue it seems uninterested in addressing. As construction projects grow in scale and complexity, the property industry is struggling to fill jobs. Sensible immigration policy solutions are the answer, but few in the industry are advocating for change. In a monumental election year, the property industry must push politicians for answers.

This year the construction industry needs to fill over 500,000 jobs on top of the normal pace of hiring to meet the demand for labor according to models from the Associated Builders and Contractors (ABC). Next year, the industry will need 454,000 workers. More than one in five workers are 55 or older, compounding the issue as new hires work to offset the pace of retirement of the industry’s most experienced talent. Attracting and training new workers in the industry will not be enough to tackle the growing labor shortage, especially considering many union-run programs do not offer the same access to foreign-born workers. Foreign-born US workers make up a record 25 percent of the construction labor force, according to the National Association of Home Builders. That number continues to grow, which is a good thing because foreign-born workers have surpassed pre-pandemic labor force participation rates, outpacing local labor rates.

The problem isn’t limited to the construction industry either. H-1B visas for specialty occupations, popular in the tech industry that depend on the programs to hire thousands annually, are also under immense pressure. H-1B visa limits are so low about 80% of applicants are rejected, causing particular problems for workers from India and China. Relief for renewals is on the way, but caps limiting the total number of visas are unlikely to be raised, perpetuating the problem. Workers lucky enough to hold an H-1B visa are often paid less for the privilege while struggling with mobility issues. Starting a new job or being let go restarts the lottery process, locking visa holders into their roles. This issue affects PropTech too. There’s no shortage of tech workers, but obstacles in the H-1B visa process create an additional undue burden for workers navigating the United States’ confounding immigration process.

Putting the best and brightest minds to work innovating on American soil is important to driving continued economic growth. H-2B visas allowing companies to hire seasonal workers to remain as long as they work for that employer are even worse. Too often workers are told one thing, but when they arrive in the United States, are offered something different, with their only recourse being to return home.

Foreign-born workers are more likely to work, work for less, and labor under unfair and or dangerous working conditions. Any attempt to change is met with retaliation or indifference. Legal recourse does not offer timely solutions, making the entire immigration system a method of intimidation and control across the property industry.

Undocumented workers, massive failure

Undocumented workers are a separate issue that’s difficult to fully assess due to the nature of each worker’s legal status. In some states like Texas, half of all construction workers may be undocumented, according to the Workers Defense Project. Estimates indicate that number is closer to 20 percent nationally. The problem is easy to sweep under the rug. Rampant worker misclassification, frequent job changes, and fraud help employers cheat immigration laws. Contractors are not responsible for the legal status of a subcontractor’s workforce, which typically makes up the vast majority of workers on any given job site, allowing the industry to turn a blind eye.

The United States has plenty of laws against illegal immigration, employing undocumented workers, and exploiting legal visa holders, but enforcement is practically nonexistent. U.S. Immigration and Customs Enforcement is even considering releasing thousands of detained migrants due to budgetary constraints. The reality of the situation is that little the United States is doing to solve the problem is currently working. State and federal dollars are being burned by the millions aimed at an issue that’s only getting worse for everyone involved. Despite record spending, migrant encounters at the U.S.-Mexico border hit an all-time high at the end of 2023.

Instead of spending hundreds of millions in taxes on enforcement exacerbating the struggle, a new paradigm aligning migrants, border enforcement, and commercial interests is needed. Foreign workers want training and work opportunities, while construction and tech firms want plentiful properly trained workers. Using policy to establish a streamlined work permit process, a legal path toward permanent residency, better access to job training, and more protection from dangerous or unethical working conditions is a workable path forward based on prosperity, not punishment.

Stalemate or innovate

Congress has made it clear any hope of an immigration solution will have to wait until after the November election. Workers have heard that before under the Trump administration, under the Obama administration, and the Bush Administration. The problem persists as federal agents encountered roughly 2.5 million migrants at the southern border in 2023 and job openings pile up. Instead of making anything better, the situation is only getting worse, as key immigration policies and programs have lapsed. The Biden administration extended the window for expired work permits by another 8 months because nearly 2 million work permit applications are backlogged.

Labor scarcity slows down project timelines and leads to increased labor costs. Construction projects are not only delayed due to a lack of manpower, but the existing workforce may demand higher wages due to increased demand for their services. This cost burden is ultimately passed on to consumers, making housing, commercial, and infrastructure projects more expensive for developers and governments. Higher costs may discourage investment in the construction sector, hindering overall economic growth. There’s a tremendous opportunity right now for construction leaders around the country to take a stand for better pathways to immigration, a bigger labor pool, and ultimately, greater productivity. Will they rise to the occasion?