On today's show we're talking about a construction risk that may not be in your pro forma.
You might say, "Victor, I only hire legally authorized workers. Why should immigration enforcement affect my project?"
That's a perfectly reasonable question.
But it misunderstands how a construction labor market works.
Construction pricing is not determined solely by who works on your job site. It's determined by the depth of the entire labor pool competing for the same work.
Over the past several months, immigration enforcement in the United States has accelerated considerably.
ICE arrests increased from 32,545 in May to 43,021 in June, and then to 49,571 in July.
Nearly 40 percent of the July arrests occurred in Texas and Florida.
Now, those numbers by themselves don't tell us much about construction. But when you look at what is happening in individual markets, the picture becomes more interesting.
In Austin, Texas, one large homebuilder reported that framing labor costs increased between 25 and 50 percent in a matter of weeks.
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