BUILDERS' BANE OR BOON ILLEGAL IMMIGRANTS ALREADY BEING BOOTED FROM CONSTRUCTION.

Immigration reform may still be under debate in Washington.

But in Southern California, the prospect of tougher enforcement of immigraton rules is already prompting contractors to fire undocumented workers - raising concerns about a shortage of hands in an industry that survives on streams of cheap labor.

Some fear a smaller pool of potential laborers could ultimately drive up costs of homebuilding, home improvements and home prices.

Tom Siler, owner of TNT Construction, a drywall contractor in Lakewood, said he fired six undocumented workers last week to avoid being caught up in any future crackdown on employers.

He said the change will raise his labor costs, but that's not necessarily a bad thing.

``It costs less to hire these guys, but we're paying for it in other ways,'' he said, such as consistency. ``Right now, the price to fix a room or change the windows is not the right price because someone is using illegal labor, and that's bringing down the industry standard.''

Undocumented workers are often paid less than their documented counterparts, which allows contractors to charge a lower fee for a service. Siler said some of those prices have been kept artificially low. At the same time, those undocumented workers may not have as much experience.

If there's a crackdown on illegals working on construction sites, prices may go up, but so will standards, he said.

``This will give the construction industry more continuity. Prices will go up, but there will be consistency. Companies will start charging the same price for the same job if you take illegal labor out of the scenario.''

Higher prices for labor could filter down to consumers in the form of higher construction costs and higher home prices. That will come on top of huge price hikes for building materials, largely due to high demand from China and for rebuilding in New Orleans. The threat of more expensive local labor will add to those price pressures.

James Guido, owner of Pine Bark Construction, a home-additions company in Glendora, said immigration reforms will end up raising labor costs. ``But I'm already paying those higher prices,'' he said.

That's because he does not employ immigrant workers without a green card, and he does things by the book. Including workers' compensation, Social Security and other taxes, nearly $48 of every $100 he pays a man goes to payroll taxes. ``It's very frustrating,'' he said. For him, cracking down on employers who hire illegals will level the playing field.

Other business owners say they are not expecting a dramatic crackdown on construction firms that employ illegals, partly because the practice is so widespread.

``I don't think it's going to come down to that sort of witch hunt,'' said David Ayala, one of the owners of A.L. Ayala Roofing, which does a lot of work in Van Nuys. He said it will slow productivity, though, because it's already difficult to find workers, documented or undocumented. If illegal workers are taken out of the mix, it may be hard to staff building crews.

A labor pinch in the construction industry would certainly be a factor in keeping home prices high, said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp.

``When you're looking at home prices, you have to look at the availability of land on which to build, which is very expensive. You take the cost of building materials, which is up significantly. Then if you push up the cost of labor, you've just exacerbated the problem,'' he said.

Kyser said he has heard that many smaller contractors have converted to doing business on an all-cash basis to avoid problems with undocumented workers under new immigration rules.

``We have one of the tightest labor markets I've ever come in contact with,'' said John Husing, an economist who has been studying the Inland Empire for almost 40 years. ``I don't care who you talk to: They're desperate for workers, and clearly that includes construction sites.''

He said construction is the region's top blue-collar employer.

Construction is the second biggest employer of undocumented workers in Los Angeles County, after restaurants, according to projections by the Economic Roundtable, a nonprofit research organization in Los Angeles. The group's report says 30,800 undocumented people work in the industry in L.A. County -- roughly 15 percent of all those in construction-related jobs.

Whether immigration reform ends up reducing those numbers or prompting crackdowns on employers, construction trade groups are warning contractors to get their ducks in a row just in case. The Southern California Contractors Association, whose contractors employ only union members, is advising its members not only to gather employment data, but to verify it.

Local chapters of trade groups including the Building Industry Association and the Associated Builders & Contractors support stronger border security and a guest-worker program, but officially oppose law enforcement and compliance obligations on employers.

But contractors like Tom Siler, the TNT Construction owner, say a crackdown on illegal workers may turn out to be good for the industry and good for workers themselves.

``I think it would be better in the long run. It would put pressure on these guys who can become legal to do it -- because a lot of them are just procrastinating,'' he said. ``I know several of them are here over 15 years. ... I think it would be good to straighten the industry out. I'm sure a lot of contractors would disagree with me. But I think it will help the economy in California.''

[e-mail]

[phone]

CAPTION(S):

2 photos, box

Photo:

(1 -- color) Day laborers swarm to a truck whose driver, looking for workers, stops outside a home-improvement store off Roscoe Boulevard in Van Nuys.

(2) In hope of work, day laborers in Van Nuys approach a truck whose driver they hope will have some jobs for them.

Gus Ruelas/Staff Photographer

Box:

Building jobs

Sources: Economic Roundtable, Department of Labor