Labor disruptions have contributed to the delay of half a million apartment units under construction since 2018, according to a RealPage analysis. This is adding to a list of concerns apartment developers are facing, including tariffs, surging insurance premiums and rising construction costs.
Los Angeles experienced the most delays, with more than 70,000 units disrupted during construction during the past seven years, which amounts to more than half of the market’s expected deliveries, the analysis said. New York, Seattle and Phoenix saw significant delays of more than 30,000 units each, and Newark, Washington, D.C., Denver, Dallas, Austin and Oakland's numbers weren't too far behind, which all ranged from 15,000 and 30,000 units.
Immigration policy could exacerbate challenges related to labor as apartment construction relies heavily on immigrant workers, according to RealPage. In Texas, Florida and New York, immigrants make up about 38% of the construction workforce, while about 41% of the workforce in California is thought to fit this category.
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With construction already slowing, disruptions in the labor market could further delay the apartment development pipeline. That could have a variety of impacts, including increasing costs, limited new supply, rising rents that could put further pressure on housing affordability and investor reassessment of risk exposure in markets with significant immigrant-related workforce disruption, the report said.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
