Have You Noticed – Part 3

This article will outline the impact on construction/housing/mortgages if the administration deports illegal aliens.

From Grok:

The estimated number of illegal immigrants in the United States that could potentially be subject to deportation varies according to different sources. According to recent analyses, the unauthorized immigrant population in the U.S. was estimated to be around 10.99 million in 2022, with some sources suggesting this number has stabilized after previous growth periods. However, other reports indicate a higher number; for instance, the Federation for American Immigration Reform (FAIR) estimated about 16.8 million illegal aliens resided in the U.S. as of June 2023.

Additionally, discussions on X mention numbers ranging from 11 million to 20 million, with some posts suggesting Trump’s administration might aim for deporting between 1 to 2 million, with an acknowledgment that going beyond that would require significant additional resources.

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Grok is programmed to state that deportation will have a negative impact in the long term due to a lack of skilled workers in the construction industry. I rephrased my question:

If supply rises, construction will be decreased so demand for workers should not be a significant impact

Grok:

Your point introduces an interesting economic principle, suggesting that if supply rises due to deportations, the need for new construction might decrease, thereby reducing the demand for construction workers. Here’s a more nuanced analysis considering this perspective:

Initial Impact on Housing Supply:

• Increased Availability: If one million people are deported, the immediate effect would indeed be an increase in housing availability due to reduced demand. This could lead to:
  • Lower occupancy rates in rental units.
  • Potentially lower home prices in areas with significant immigrant populations, as the market adjusts to the new supply-demand equilibrium.

Construction and Labor Demand:

• Reduced Construction Needs: With more housing units available, the urgency for new construction might decrease. This scenario would:
  • Lower immediate demand for construction workers, potentially alleviating concerns about labor shortages in construction in the short term.
  • However, this assumes no other factors like population growth, urban expansion, or replacement of aging infrastructure demand new construction.
• Maintenance and Renovation: Even if new construction decreases, there would still be a need for maintenance and renovation of existing structures. The impact here would be:
  • If undocumented immigrants, who often perform these roles, are less available, costs could rise due to higher wages for remaining workers or the need to train new workers.
  • Over time, maintenance might not keep pace with needs, potentially leading to a decline in housing quality or increased costs for property owners.

Long-term Market Dynamics:

• Economic Activity: If the economy contracts due to the loss of consumer spending by those deported (immigrants contribute to both labor and consumer markets), or if there’s a significant economic backlash, housing demand might not recover quickly, keeping construction needs low.
• Construction Sector Adaptation: The construction industry might adapt by:
  • Increasing wages to attract remaining workers.
  • Automating more processes or using more prefabricated elements.
  • Training or hiring from other sectors or underemployed local populations, though this might take time.
• Housing Market Equilibrium: If construction demand decreases significantly, eventually, the market might reach a new equilibrium where new construction resumes to meet any residual or new demand, but this could take years, depending on economic conditions.

Policy and Market Reactions:

• Government Policy: Housing policy, zoning laws, or incentives for construction could shift to address the new reality, either by encouraging more building or repurposing existing structures.
• Investment and Speculation: Investors might enter the market to buy up properties at lower prices, potentially stabilizing or increasing demand for construction for renovations or conversions.

Conclusion:

• Short-term vs. Long-term: In the short term, your premise holds; less demand for new housing could lead to less need for construction workers. However, the long-term impact on the housing market and construction labor could be more complex, involving:
  • Potential labor shortages if the economy rebounds or if other sectors start competing for labor.
  • A possible degradation in property maintenance without the existing workforce.
• Market Adjustment: The construction sector would need to adjust, possibly through higher wages, automation, or shifting workforce dynamics. The exact impact would depend on how quickly and effectively the market adapts to these changes.

Thus, while the immediate effect might reduce construction activity and labor demand, the longer-term implications on housing supply, quality, and labor could still be significant if not managed strategically.

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I believe we will have a period of several years before constraints in construction become problematic. Or I should say more problematic, since the cost of construction coupled with the low quality of new construction have not been addressed. Neither have the costs of housing insurance, mortgage interest, increased property taxes and permitting requirements been considered.

It is probable that the commercial real estate market will implode as outlined previously. The result will impact banks, reduce rents and impact property taxes. Since supply is increased, new office construction will decrease AND banks will be reluctant to finance new construction without more collateral and higher loan interests.

Depending on how many people are deported (and self-deported), residential construction will also be impacted. Rents will decrease and demand for new housing will decrease for multiple reasons:

1. Interest rates
2. Construction costs will be increased to rebuild housing in Florida, WNC/Tennessee and Los Angeles.
3. There will be a shortage of skilled labor as people are deported. How much of an impact will be dependent on the number of people deported and the amount of skilled American labor that has not been used due to cheaper illegal labor.
4. The country may go into a recession or worse. We still have out of control spending on all government levels.

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I want to concentrate on the shortage of skilled labor. Why are people saying we need illegal aliens for the construction industry? Let’s look at this as an opportunity to rebuild our country with Americans. Consider how we got to this point and it starts with education.

Our educational facilities have failed our children and our country. Miserably failed. Consider the point that all math taught in grades K-5 can be taught in six weeks at one hour per day (30 hours). How long would it take to train someone to frame a house?

From Grok:

Estimated Times:

Basic Framing Skills:

• With no prior experience: 3 to 6 months of intensive, daily practice could get someone to understand basic framing techniques, though this would be under ideal conditions with good mentorship.
• With some construction background: 1 to 3 months to learn framing specifically, assuming they already know about tools, safety, and basic construction principles.

Proficiency in Framing:

• No experience: Likely 1 to 2 years to become proficient, including dealing with various scenarios, understanding blueprints, and handling complex or custom framing projects.
• With construction experience: 6 months to a year, considering they’re adapting existing skills to framing.

Mastery:

For someone to be considered a master framer, capable of handling any framing job with efficiency and innovation, it might take 3 to 5 years or more, combining experience with continued learning and adaptation to new construction methods or materials.

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If our children would be taught basic skills such as reading, writing and mathematics, I know that Americans can learn how to frame a house in a reasonable amount of time. Or plumbing, electrical, HVAC or grading. We have to invest in America and that means investing in our children. I want to qualify that statement: we should only invest in our children who want to succeed. In order to succeed, we have to reward people who work with a fair wage and working conditions. In order to succeed, we have to reignite the concept of the American dream.

For anyone who believes that Americans cannot rebuild this country:

The Deep State will not go easily into the night and traitors like Mitch McConnell, Susan Collins and Lisa Murkowski are proof that their goal is to join the Deep State to destroy the nation. We need to come together and realize that tough times are here and will get worse. It’s time to make lemonade and rebuild our country using Americans.

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