Introduction to ICE Raids and Homebuilding Labor Pool
It’s been a week since Los Angeles’ Fashion District was rocked by U.S. Immigration and Customs Enforcement raids that set off many more detainments in the days that followed.
Some are now asking whether the raids could hold implications for homebuilders in the state, which have already been grappling with a labor shortage.
National Association of Home Builders CEO Jim Tobin told the Los Angeles Daily News the raids could compound preexisting challenges for the industry.
“I think the labor market is tight for our industry already,” Tobin told the newspaper. “Whether this adds to it or not, we will see.”
NAHB and the Home Builders Institute on Tuesday released a study that found the industry’s shortage of skilled workers leads to longer construction times that come at a cost to the country of $10.8 billion annually.
In terms of single-family homes, the shortage translates into roughly 19,000 units that didn’t get built last year due to lack of workers, the report says.
Impact of ICE Raids on Homebuilding
The raids could exacerbate the existing labor shortage in the homebuilding industry, making it even more challenging for builders to find the workers they need to complete projects.
This could lead to further delays and increased costs, ultimately affecting the availability and affordability of housing in the state.
The industry is already facing significant challenges, including a shortage of skilled workers, increased material costs, and regulatory hurdles.
The ICE raids could be the final straw, pushing some builders to the brink of collapse.
Hilton & Hyland’s Landlord Dispute
It’s been a tough week for Hilton & Hyland.
The brokerage’s landlord alleges the Beverly Hills firm is behind in rent payments to the tune of over $659,000, according to its lawsuit filed last month in Los Angeles County superior court.
Landlord Canon Luxury Buildings LLC, which is managed by the same executives behind Standard Oil Investment Group, said in its lawsuit the firm owes nearly $66,000 in late fees and would also like the brokerage to pay up for attorney costs.
The tussle with its tenant may have come to a head on Wednesday when broker Brandon Cohen advertised Hilton & Hyland’s second-floor office space as available for lease.
Hilton & Hyland managing director Steve Katz told The Real Deal, “We are aware of the action taken by the landlord and are responding appropriately.”
A legal response from the brokerage to the landlord’s complaint has not yet been filed in court.
New Brokerage Launch
L.A.’s high-end residential market welcomed a new name to the competitive set: Resident.
The Side-backed brokerage is led by Jon Grauman, Adam Rosenfield and CEO Lauren Grauman. The trio left The Agency, along with about 15 agents and five staffers to launch their new company.
“For me personally, my north star in this whole journey was I just kept coming back to this idea that you get one shot in this life, and I don’t want to look back with regret and wish that I would have dreamed bigger,” Jon Grauman told TRD in talking about what motivated the launch.
Resident is off to a strong start with over $900 million in inventory brought over to the new firm. Plans call for an expansion into Napa Valley as early as later this summer.
Pacific Palisades’ Priciest Listing
The Pacific Palisades saw its priciest listing added to its inventory recently.
It’s a spec mansion owned and built by GME Development that’s asking $54 million.
GME founder Guy Grimberg said the property reflects the type of project he likes most: “unique hillside buildings.”
Totaling more than 18,000 square feet, 766 Paseo Miramar was constructed before January’s wildfires and remained untouched from the flames. The interior finishes were brought in and installed after the fire, with the home fully complete just a few weeks ago.
The hillside estate has seven bedrooms and 11 bathrooms, with plenty of upscale amenities, including a wellness center, rooftop deck, 90-foot pool and a primary suite spanning over 2,500 square feet.
Market Closings
The market’s seen some whoppers added to the market’s inventory.
This week’s spec development at 766 Paseo Miramar, priced at $54 million in the Palisades, was one. The estate once owned by the late real estate developer William Lyon listed for $125 million was another that was added to the market’s inventory this month.
Still, blockbuster closings have been quiet since Australian billionaire James Packer paid $110 million for 630 Nimes Road in Bel-Air in early May.
The contracts and closings don’t match the amount of inventory coming onto the market.
Douglas Elliman’s Eklund Gomes team reported in its weekly contracts roundup that 115 listings were added into L.A. County’s market for the week ended June 8 as absorption sits at nearly 21 months for on-market properties priced at $4 million or more. Total homes that went into contract during that same period were 18. Notably, that absorption figure is up from the prior week’s 18 months.
Conclusion
In conclusion, the ICE raids in LA could have significant implications for the homebuilding labor pool, exacerbating the existing labor shortage and leading to further delays and increased costs.
The industry is already facing significant challenges, and the raids could be the final straw, pushing some builders to the brink of collapse.
Meanwhile, the high-end residential market in LA is seeing new developments, with the launch of Resident and the listing of Pacific Palisades’ priciest property.
However, the market is still experiencing a slowdown in blockbuster closings, with the contracts and closings not matching the amount of inventory coming onto the market.
FAQs
Q: What is the impact of ICE raids on the homebuilding labor pool?
A: The ICE raids could exacerbate the existing labor shortage in the homebuilding industry, making it even more challenging for builders to find the workers they need to complete projects.
Q: What is the current state of the high-end residential market in LA?
A: The high-end residential market in LA is seeing new developments, with the launch of Resident and the listing of Pacific Palisades’ priciest property.
Q: What is the current trend in market closings?
A: The market is still experiencing a slowdown in blockbuster closings, with the contracts and closings not matching the amount of inventory coming onto the market.
