Federal immigration enforcement under President Donald Trump is beginning to ripple through the South Texas economy, with builders warning that labor shortages are slowing construction and threatening housing affordability in one of the state’s fastest-growing regions.
Construction leaders across the Rio Grande Valley say increased activity by U.S. Immigration and Customs Enforcement has made many workers hesitant to report to job sites, even when they are legally employed. The result, they say, is delayed projects, tighter labor availability, and rising costs that could ultimately be passed on to homebuyers.
According to data obtained through a public records request and analyzed by the Texas Tribune, ICE has arrested more than 9,100 people in South Texas since President Trump returned to office. That total accounts for nearly 20 percent of all ICE arrests statewide during the same period.
Construction Industry Feeling the Impact
Mario Guerrero, executive director of the South Texas Builders Association, said concerns escalated after video circulated showing ICE agents detaining workers at a local construction site. He noted that fear spreads quickly in tight-knit labor communities, leading many workers to stay home rather than risk an encounter.
Builders say the labor shortage is already slowing housing production. With fewer crews available, projects take longer to complete, reducing the number of new homes entering the market.
Economists warn that reduced supply often leads to higher prices, putting additional pressure on working families, retirees, and first-time buyers.
Jobs Data Confirms the Slowdown
Figures from the Federal Reserve Bank of Dallas show construction employment in the Rio Grande Valley declined by 5 percent during the third quarter. That marked the steepest job loss among all major sectors in the region.
More than 380 professionals — including contractors, real estate agents, suppliers, and lenders — recently gathered in Pharr to discuss the economic consequences. Ronnie Cavazos, president of the builders association’s board, warned that prolonged labor shortages could push some small businesses to the brink.
Local building suppliers say the slowdown is already hitting their bottom line. Isaac Smith, who co-owns Matt’s Building Materials, reported that revenue has fallen by double digits, while overdue accounts have become more common as construction activity continues to lag.
History Offers a Warning
Industry leaders and economists point to a similar period between 2008 and 2013, when immigration enforcement intensified nationwide. The Secure Communities program, launched under George W. Bush and expanded under Barack Obama, resulted in more than 300,000 deportations.
Research from the University of Wisconsin found that the crackdown reduced the construction labor force by up to 3 percent nationwide and contributed to a 5.7 percent decline in new home construction.
That reduced supply helped push average home prices up by roughly 4.4 percent, according to the study.
Professor Dayin Zhang, the study’s lead author, explained that stepped-up immigration enforcement can have a direct impact on housing markets by reducing the number of workers available to build new homes. He cautioned that if deportations remain high, labor shortages could become more severe than in past enforcement periods.
Leaders Seek Balance
Guerrero said he has met with state and federal officials to raise concerns about the regional economy, including Democratic Rep. Henry Cuellar and Republican Gov. Greg Abbott.
While builders acknowledge strong support for border enforcement in South Texas, they argue that economic stability, housing affordability, and job growth must also be part of the conversation.
For many residents, the issue is no longer abstract. Slower construction, higher prices, and tighter housing supply could soon affect families across the region — highlighting the complex balance between enforcement policy and economic reality.