There are the halakhic (Jewish legal) violations and concerns, e.g., you hire someone to work on the Shabbat -- it is the same as you directly violating the Shabbat yourself.
Then there is the practical question of whether anyone will want to live in such housing (a) because it will be highly dangerous, i.e., singled out and targeted by Palestinian opponents of the settlement movement and (b) because, to borrow a concept from another religion, it is a true locus of really bad karma.
Rabbi OKs building settlements on Shabbat
A rabbi in a West Bank community has ruled that home construction there can take place on Shabbat.
Ofra Rabbi Avi Gisser's ruling will allow foreign and Palestinian laborers to work seven days a week building new homes in the community located near the Palestinian city of Ramallah in order to complete as many homes as possible before Israel's Supreme Court orders new construction halted.
The fear of an order halting construction comes after Israeli human rights organizations and residents of a Palestinian village next to Ofra brought a complaint to the High Court claiming that nine new homes are being built on privately owned Palestinian land.
According to Jewish law, Jews cannot ask non-Jews to work for them on Shabbat.