Immigration raids at construction sites across Texas are sending shock waves through the building industry, disrupting projects and raising concerns about broader economic fallout, according to contractors, lenders and South Texas business leaders.
Industry representatives say targeted Immigration and Customs Enforcement operations are prompting workers to stay away from job sites — even those who are U.S. citizens or have legal authorization to work. The result, they say, is a slowdown that is rippling through supply chains, financing and housing affordability.
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Mario Guerrero, executive director of the South Texas Builders Association, said companies that provide materials and services to builders are already reporting sharp revenue drops, with some pushed to the brink of collapse.
He and other builders argue the slowdown is now visible in financing as well: Guerrero said construction loans in the region are down about 30% over the past year.
Monica Martinez, with the Laredo Chamber of Commerce, said contractors are reporting labor shortages, delayed schedules and rising costs —pressures she said can chill economic development projects as timelines stretch and bids rise.
Local leaders say the impact is no longer limited to individual job sites. Delays are spreading into commercial developments, municipal projects and new housing starts, threatening an already tight Texas housing market.
South Texas Democratic Rep. Henry Cuellar said he has heard similar complaints from colleagues in other parts of the country, calling it “a national problem.”
Cuellar said he is asking federal officials to back off construction sites the way, he says, they did after agricultural employers warned raids were harming planting and harvest operations.
“I want Americans to have the job first,” Cuellar said, “but we know the reality. There’s not enough Americans to fill certain jobs.”
Rio Grande Valley Republican Rep. Monica De La Cruz is calling the ICE raids at construction sites a crisis for builders, according to the Rio Grande Guardian.
Economists note that construction has long relied on immigrant labor, particularly in Texas’ major metro areas. Even when enforcement actions target only a handful of workers, fear can keep many more from showing up.
A recent Federal Reserve Bank of Dallas analysis found immigration policy changes and intensified enforcement can curb labor supply through multiple channels creating a “chilling effect” in immigrant communities that makes people more likely to miss work or avoid public spaces.
Nationally, the National Association of Home Builders has warned members about jobsite raids and advised employers to ask for warrants and contact counsel if agents arrive.
In Texas’ largest metros, foreign-born noncitizens make up a sizable share of the construction workforce — about 38.6% in the Houston area, according to U.S. Census Bureau.
Cuellar said he arranged meetings for the builders with ICE leadership and the White House, and that lawmakers are trying to add “guardrails” through the Homeland Security appropriations process — an effort complicated by the administration’s broader enforcement push and the competing demands of border security, labor markets and housing affordability.
Business groups caution that prolonged disruption could slow residential construction just as the state is trying to address a shortage of affordable homes. Lenders are already pricing in risk, and some developers are postponing projects until the labor picture becomes clearer.
Originally reported by David Martin Davies in Texas Public Radio.
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