ICE Raids Leading to Massive Decline in New Home Construction

Roofers are declining new projects. Painters are locking themselves in their homes to avoid being seen. Concrete crews are booked months out.

Across the Twin Cities and surrounding suburbs, stepped-up immigration enforcement has slowed residential construction at a moment when Minnesota—like much of the nation—faces a significant housing shortage. Although federal officials have begun scaling back what was known as Operation Metro Surge, the economic aftershocks remain.

Homebuilders report stalled timelines, shrinking labor pools, and steep revenue losses. One large Minneapolis-area builder overseeing hundreds of projects across the Midwest described monthslong delays after federal immigration officers stationed themselves near a major apartment construction site. Multiple crews walked off. At one point, only six of 80 contracted roofers continued showing up for work, regardless of immigration status. The builder estimated a 25 to 30 percent revenue decline tied directly to labor disruptions.

The tension exposes a policy contradiction. President Donald Trump has emphasized housing affordability as a domestic priority, and Congress recently advanced legislation designed to encourage new home construction. Yet intensified immigration enforcement in construction-heavy regions threatens to sideline a significant share of the workforce required to meet those goals.

According to the National Association of Home Builders (NAHB), immigrants make up more than 25 percent of the national construction labor force—a historic high. In states like Minnesota, builders say the reliance is even more pronounced. Whether documented or undocumented, thousands of workers have reportedly stayed home in recent months, fearing detention, harassment, or confrontations at job sites.

Operation Metro Surge, which began in Minneapolis and St. Paul before expanding statewide, deployed roughly 3,000 federal officers at its height. The operation led to widespread detentions and high-profile clashes, including the killing of two US citizens by federal agents. The visibility of enforcement activity—armed officers near construction zones, unmarked vehicles, and prolonged site monitoring—has reverberated beyond those directly targeted.

The result is a labor shortage layered on top of an existing one.

Custom-home builder Mark Williams said two of the three concrete masons his company works with pushed projects back by two months because crews would not report to job sites. Roofing and siding companies that once required 30 days’ notice now demand four to five months to guarantee staffing. Clients are being told their homes will be delayed indefinitely.

Even builders who believe their crews are fully authorized to work have seen subcontractors hesitate. Because most residential construction relies on layered subcontracting relationships, general contractors often cannot directly verify the status of every worker on site. Fear has spread across the entire labor ecosystem.

Another builder, Barak Steenlage, said some subcontractors have declined work in Minneapolis entirely, regardless of status, concerned about being stopped or questioned. For indoor crews, including painters, he has permitted workers to lock doors from the inside while completing projects to reduce visibility from the street.

These workarounds underscore the level of anxiety rippling through the industry, and it’s not just happening in Minneapolis.

The broader nationwide economic implications are substantial. A fall 2025 NAHB report estimated that skilled labor shortages already cost the US economy $2.7 billion annually due to prolonged construction timelines. Enforcement-related absenteeism compounds those delays, particularly in states where specialized building techniques are required to manage climate extremes, such as Minnesota.

Housing affordability is especially sensitive to labor costs. While mortgage rates are currently below 6 percent, the decline in new builds will lead not only to rising labor costs, but will eventually lead to greater costs for new homes. When fewer crews are willing or available to perform work, pricing power shifts. As one builder noted, if demand for roofing and siding remains strong but only a handful of crews are willing to operate, those crews can charge significantly more. In a market already strained by high materials costs and elevated mortgage rates, additional labor scarcity could push home prices even higher. There will be long term aftershocks in the housing market due to this.

Tenants’ rights advocates warn that the economic ripple effects may extend beyond new construction. If workers avoid job sites and fall behind on income, rent payments could suffer. In response to local conditions, the Minneapolis Park and Recreation Board temporarily suspended evictions for its rental properties, reflecting broader concern about housing stability.

Minnesota’s experience highlights a deeper structural tension in national policy. Construction—particularly residential construction—depends heavily on immigrant labor. Enforcement strategies that are highly visible, prolonged, or broadly sweeping can affect not only undocumented workers but also documented workers and citizens who fear confrontation.

The challenge for policymakers is not simply whether immigration enforcement should occur, but how it intersects with labor markets central to economic priorities like housing affordability. When enforcement strategies collide with workforce realities, industries already operating on tight margins can experience immediate disruption.

In Minnesota, that collision is visible in delayed foundations, unfinished roofs, locked doors, and empty job sites. The housing shortage has not paused. Demand has not disappeared. But the workforce required to meet it has grown hesitant.

And as builders warn, when labor uncertainty becomes prolonged, the cost is measured not only in dollars but in homes that are never built—or built at prices far beyond reach.