{"id":171309,"date":"2024-04-29T14:00:17","date_gmt":"2024-04-29T20:00:17","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=171309"},"modified":"2024-06-11T03:04:45","modified_gmt":"2024-06-11T09:04:45","slug":"how-the-immigration-crisis-impacts-real-estate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-the-immigration-crisis-impacts-real-estate","title":{"rendered":"U.S. Immigration Crisis: What It Really Means for Housing Markets and Investors"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC6800202369\" width=\"100%\"><\/iframe>\r\n\r\n\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">A record&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2024\/01\/31\/us\/us-immigration-asylum-border.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">300,000 migrants<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;entered the U.S. through the southern border in December.&nbsp;<\/span><span data-preserver-spaces=\"true\">Rather than trying to sneak past border agents<\/span><span data-preserver-spaces=\"true\">, many surrendered to apply for asylum<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Overwhelmed immigration courts take years to process these claims, and migrants&nbsp;<\/span><span data-preserver-spaces=\"true\">are protected<\/span><span data-preserver-spaces=\"true\">&nbsp;from deportation in the meantime. They hope to stay, work, and build a life here. But achieving legal status in the U.S. is a complicated process. Meanwhile, some Americans are&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nytimes.com\/2024\/04\/02\/us\/politics\/trump-border-blood-bath.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">fearful<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of the impact of increased immigration rates on U.S. citizens and communities, which has led politicians to consider immigration policy reforms.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There\u2019s no question that the arrival of hundreds of thousands of new migrants has strained the resources of some cities. Denver, a city with&nbsp;<\/span><span data-preserver-spaces=\"true\">a population of<\/span><span data-preserver-spaces=\"true\">&nbsp;just over 710,000, has struggled to serve the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.npr.org\/2024\/02\/16\/1231931400\/as-denver-struggles-to-absorb-influx-of-migrants-other-services-are-cut\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">40,000 migrants<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;arriving in the past year. The&nbsp;<\/span><span data-preserver-spaces=\"true\">city<\/span><span data-preserver-spaces=\"true\">&nbsp;made budget cuts to devote resources to integrating them but will need support from the federal government to continue, says Mayor Mike Johnston. Bigger sanctuary cities like Chicago and New York City have also&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.npr.org\/2023\/11\/08\/1211632902\/major-cities-are-struggling-to-house-large-numbers-of-migrant-refugees\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">struggled<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to provide sufficient shelter as new migrants arrive in droves.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But deporting the majority of these people or implementing any policy that substantially reduces immigration would ultimately have a negative impact on the U.S. economy and the housing market in the long run. Without immigration, the U.S. population would&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/newsroom\/press-releases\/2023\/population-projections.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">decline more than 30% by 2100<\/span><\/a><span data-preserver-spaces=\"true\">, according to census projections, which could negatively impact economic growth and housing demand. Across the world, China is already dealing with the fallout of two straight years of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cnn.com\/2024\/01\/17\/economy\/china-population-gdp-decline-2023\/index.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">population decline<\/span><\/a><span data-preserver-spaces=\"true\">, including deflation, the departure of investors, and difficulties funding healthcare for older adults. A decrease in immigration could also mean fewer job opportunities for U.S.-born workers and even deeper labor shortages in the construction industry.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In short, immigration policy, in one way or the other, has the potential to hurt a real estate investor\u2019s bottom line. Let\u2019s take a deeper look.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Impact on Housing Wealth and Rental Revenue<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Immigrants<\/span><span data-preserver-spaces=\"true\">&nbsp;living in the U.S. added $3.7 trillion to the country\u2019s total housing wealth between 1970 and 2010<\/span><span data-preserver-spaces=\"true\">, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.newamericaneconomy.org\/housing\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">research<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;by two bipartisan nonprofit organizations<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\">&nbsp;It&nbsp;<\/span><span data-preserver-spaces=\"true\">is now estimated<\/span><span data-preserver-spaces=\"true\">&nbsp;that immigrant households hold a collective&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/map.americanimmigrationcouncil.org\/locations\/national\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$5.4 trillion<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">in<\/span><span data-preserver-spaces=\"true\">&nbsp;housing wealth.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">When immigrants move into a community, the<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">demand for housing goes up. The expanded population also supports&nbsp;<\/span><span data-preserver-spaces=\"true\">an increase in<\/span><span data-preserver-spaces=\"true\">&nbsp;economic activity due to more demand for local goods and services. As a result, home values rise.&nbsp;<\/span><span data-preserver-spaces=\"true\">The&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/commercial-real-estate-fundamentals\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">commercial real estate<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;sector may&nbsp;<\/span><span data-preserver-spaces=\"true\">similarly<\/span><span data-preserver-spaces=\"true\">&nbsp;benefit due to increased demand for&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/finding-multifamily-properties\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">multifamily housing<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and retail and industrial assets in affected communities.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">More housing wealth generally means less affordability for would-be homeowners, which raises concerns in a tight housing market. However, research shows immigration stabilizes prices in areas of decline, making those areas viable alternatives for U.S.-born homeowners priced out of expensive metros rather than putting even more upward pressure on prices in sought-after neighborhoods of high-priced cities.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Immigrants often avoid neighborhoods with high prices and housing shortages and have contributed little to housing price hikes in the nation\u2019s priciest counties. Instead, they tend to head for areas&nbsp;<\/span><span data-preserver-spaces=\"true\">that were<\/span><span data-preserver-spaces=\"true\">&nbsp;once in economic decline, stabilizing home prices and revitalizing communities.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For example, immigration has prevented population decline in Chicago and surrounding Cook County, keeping housing prices relatively stable.&nbsp;<\/span><span data-preserver-spaces=\"true\">Peripheral neighborhoods of New York, San Francisco, and Atlanta, once deemed undesirable, have also benefited from&nbsp;<\/span><span data-preserver-spaces=\"true\">the impact of immigration<\/span><span data-preserver-spaces=\"true\">&nbsp;on housing markets.<\/span><span data-preserver-spaces=\"true\">&nbsp;For example, immigration countered population and housing market declines in the Bronx and Queens.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The same is true for rent prices.&nbsp;<\/span><span data-preserver-spaces=\"true\">A&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/housingmatters.urban.org\/research-summary\/how-does-immigration-united-states-affect-countrys-housing-market\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2017 study<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;found that a 1% increase in a metro\u2019s population due to immigration&nbsp;<\/span><span data-preserver-spaces=\"true\">was<\/span><span data-preserver-spaces=\"true\">&nbsp;correlated<\/span><span data-preserver-spaces=\"true\">&nbsp;with a 0.8% increase in&nbsp;<\/span><span data-preserver-spaces=\"true\">both<\/span><span data-preserver-spaces=\"true\">&nbsp;rent prices and home values.<\/span><span data-preserver-spaces=\"true\">&nbsp;But the effect was even more pronounced in surrounding metros, where a 1.6% increase in rents and a 9.6% increase in home prices&nbsp;<\/span><span data-preserver-spaces=\"true\">were observed<\/span><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">When a city experiences a rise in immigration, real estate investors&nbsp;<\/span><span data-preserver-spaces=\"true\">have the opportunity to<\/span><span data-preserver-spaces=\"true\">&nbsp;capture increased rental revenue and home price growth in surrounding areas. Immigration can, therefore, boost real estate investors\u2019 capability to make strategic investment decisions in local housing markets.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">So, it stands to reason that a reverse in immigration trends would correspondingly lead to housing market declines. The nation would lose close to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/cato-journal\/fall-2017\/immigration-housing-markets-community-vitality\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$1 trillion<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in housing wealth by deporting 10 million undocumented immigrants, according to the Cato Institute, an American nonpartisan think tank. A 2007 crackdown on employment of undocumented workers in Arizona prompted the exodus of 100,000 residents,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/magazine\/real-estate-news\/commentary\/the-real-estate-case-for-immigration\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">exemplifying the effects<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of deportation on local rental vacancies: During the decline in the immigration population in Arizona, the vacancy rate surged from 9.8% to 16.8%.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Note that these&nbsp;<\/span><span data-preserver-spaces=\"true\">negative<\/span><span data-preserver-spaces=\"true\">&nbsp;housing market shocks would occur due to the deportation of immigrants who don\u2019t have legal status. Illegal immigrants, like their naturalized counterparts, pay&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/map.americanimmigrationcouncil.org\/locations\/national\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">billions<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in taxes and contribute to the demand for housing, goods, and services. In addition, the spike in new arrivals to the U.S. may be&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.businessinsider.com\/us-immigration-impact-labor-job-market-housing-supply-gdp-jpmorgan-2024-3\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">propping up the economy<\/span><\/a><span data-preserver-spaces=\"true\">, according to JPMorgan analysts, though&nbsp;<\/span><span data-preserver-spaces=\"true\">the vast majority of<\/span><span data-preserver-spaces=\"true\">&nbsp;new immigrants&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/briefing-paper\/green-card-approval-rate-reaches-record-lows\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">will not<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;receive green cards this year.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Impact on Taxpayers<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Still, there is valid concern about taxpayer-funded resources devoted to integrating new immigrants, especially those who enter the U.S. illegally. For example, New York City has entered into emergency contracts worth <a href=\"https:\/\/comptroller.nyc.gov\/services\/for-the-public\/accounting-for-asylum-seeker-services\/contracts\/\" target=\"_blank\" rel=\"noopener\">more than $7 billion<\/a> to provide temporary housing, healthcare, and other services for asylum seekers<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\">&nbsp;Officials in Chicago estimate the city will require an additional&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/news.wttw.com\/2024\/04\/19\/city-council-votes-30-18-spend-70m-more-care-migrants-chicago\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$321 million<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;this year to provide care for asylum seekers sent there from the southern border.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Inefficient spending may be part of the problem. Win NYC, the largest supportive housing provider in New York City estimates that providing migrants with housing vouchers could trim&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/winnyc.org\/wp-content\/uploads\/2023\/08\/Housing-Instead-of-Emergency-Shelter-for-Asylum-Seekersbriefv4.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$3 billion<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;annually from the city budget, for example.&nbsp;<\/span><span data-preserver-spaces=\"true\">Subsidized housing programs are still funded by taxpayers<\/span><span data-preserver-spaces=\"true\">, of course<\/span><span data-preserver-spaces=\"true\">, but the Cato Institute&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/blog\/fiscal-impact-immigration-united-states\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">estimates<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;that immigrant tax contributions exceed immigrant consumption of benefit programs on average.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Though some anti-immigration think tanks&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/cis.org\/Report\/Welfare-Use-Immigrants-and-USBorn\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">claim<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;that immigrants are more likely to rely on means-tested programs, nonpartisan organizations are&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/blog\/center-immigration-studies-exaggerates-immigrant-welfare-use\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">critical<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of the methodology used, and their&nbsp;<\/span><span data-preserver-spaces=\"true\">own<\/span><span data-preserver-spaces=\"true\">&nbsp;reports show&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/briefing-paper\/immigrant-native-consumption-means-tested-welfare-entitlement-benefits-2020\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">lower rates<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of participation in public benefit programs among the immigrant population. Though analyses of public data show varying results, the Bipartisan Policy Center&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/bipartisanpolicy.org\/download\/?file=\/wp-content\/uploads\/2019\/03\/Immigrants-and-Public-Benefits-What-Does-the-Research-Say.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">notes<\/span><\/a><span data-preserver-spaces=\"true\">, \u201cMost studies of benefits usage by individuals find that immigrants access benefits at or below the usage rate for native-born Americans.\u201d Most undocumented immigrants don\u2019t individually&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nilc.org\/issues\/economic-support\/overview-immeligfedprograms\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">qualify<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for welfare programs, but their children might.&nbsp;<\/span><\/p>\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.census.gov\/data\/tables\/2021\/demo\/public-assistance\/sipp-receipts.html\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">2021 data<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;from the Survey of Income and Program Participation show that while 18.8% of adult respondents were foreign-born,&nbsp;<\/span><span data-preserver-spaces=\"true\">they<\/span><span data-preserver-spaces=\"true\">&nbsp;account for 18.8% or less of the recipients of SSI, TANF, and SNAP. Immigrants had relatively high participation rates for the WIC program<\/span><span data-preserver-spaces=\"true\">, however<\/span><span data-preserver-spaces=\"true\">, at about 31%.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Immigrant<\/span><span data-preserver-spaces=\"true\">&nbsp;households tend to have less wealth than U.S.-born households<\/span><span data-preserver-spaces=\"true\">, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pewresearch.org\/short-reads\/2023\/12\/04\/key-facts-about-the-wealth-of-immigrant-households-during-the-covid-19-pandemic\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Pew Research<\/span><\/a><span data-preserver-spaces=\"true\">. But<\/span><span data-preserver-spaces=\"true\">&nbsp;immigrants also have higher&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/siepr.stanford.edu\/publications\/working-paper\/intergenerational-mobility-immigrants-us-over-two-centuries\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">upward mobility<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;rates than native residents.<\/span><span data-preserver-spaces=\"true\">&nbsp;People born in the U.S. to immigrant parents have&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pewresearch.org\/short-reads\/2023\/12\/04\/key-facts-about-the-wealth-of-immigrant-households-during-the-covid-19-pandemic\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">greater<\/span><span data-preserver-spaces=\"true\">&nbsp;median wealth<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;than immigrants themselves, and longtime immigrant residents who arrived in the U.S. before 1990 have&nbsp;<\/span><span data-preserver-spaces=\"true\">greater<\/span><span data-preserver-spaces=\"true\">&nbsp;median wealth than people born in the U.S.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Given the outlook for children of immigrant families, along with the boost to the labor market provided by immigrant workers and entrepreneurs, many immigration advocates see the cost to taxpayers as an investment in the future of the U.S. economy. Nevertheless,&nbsp;<\/span><span data-preserver-spaces=\"true\">residents of cities with budgets strained by the migrant crisis may be negatively impacted<\/span><span data-preserver-spaces=\"true\">&nbsp;in the short term.&nbsp;<\/span><span data-preserver-spaces=\"true\">Denver will cut spring recreation programming by&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.denver7.com\/news\/front-range\/denver\/these-are-the-service-cuts-denver-will-see-in-2024-as-mayor-johnston-responds-to-the-migrant-crisis\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">25%<\/span><\/a><span data-preserver-spaces=\"true\">, for example,<\/span><span data-preserver-spaces=\"true\">&nbsp;due to devoting resources to serving migrants.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Labor Market: Myth vs Reality<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">A&nbsp;<\/span><span data-preserver-spaces=\"true\">key<\/span><span data-preserver-spaces=\"true\">&nbsp;tenet of anti-immigration rhetoric is the idea that immigrants steal jobs from U.S.-born workers. But the real impact of immigration is to spur economic growth in sluggish communities, creating more job opportunities for immigrants and native workers&nbsp;<\/span><span data-preserver-spaces=\"true\">alike<\/span><span data-preserver-spaces=\"true\">.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The net effect on job growth isn\u2019t just neutral, it\u2019s positive\u2014because immigrants have a high tendency toward&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/insight.kellogg.northwestern.edu\/article\/immigrants-to-the-u-s-create-more-jobs-than-they-take\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">entrepreneurship<\/span><\/a><span data-preserver-spaces=\"true\">, they create more job opportunities than they fill. Immigrants are more likely than U.S.-born individuals to start businesses of all sizes, from local mom-and-pop retailers to Fortune 500 companies. And those firms offer higher employee wages than native-founded companies.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Immigrant workers also fill labor shortages in diverse ways. Since immigrants are more likely to be of working age, they create balance in the job market as baby boomers leave the workforce, often filling jobs in industries desperate for workers, like food service and hospitality.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Immigrants have also kept&nbsp;<\/span><span data-preserver-spaces=\"true\">certain<\/span><span data-preserver-spaces=\"true\">&nbsp;industries afloat,&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/cato-journal\/fall-2017\/immigration-housing-markets-community-vitality#what-the-data-show-immigration-raises-home-prices-and-creates-opportunities-for-natives\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">delaying job losses<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in the manufacturing industry<\/span><span data-preserver-spaces=\"true\">, for example<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\">&nbsp;Record-high immigration existed alongside record-low unemployment in 2023; there\u2019s no reason to believe immigration&nbsp;<\/span><span data-preserver-spaces=\"true\">poses a threat to<\/span><span data-preserver-spaces=\"true\">&nbsp;the job market.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But what about pay?&nbsp;<\/span><span data-preserver-spaces=\"true\">Some say immigrants will accept lower wages, making it&nbsp;<\/span><span data-preserver-spaces=\"true\">tough<\/span><span data-preserver-spaces=\"true\"> for U.S.-born workers to compete<\/span><span data-preserver-spaces=\"true\">&nbsp;for the same jobs&nbsp;<\/span><span data-preserver-spaces=\"true\">and get<\/span><span data-preserver-spaces=\"true\">&nbsp;a fair wage.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">But<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><span data-preserver-spaces=\"true\">the<\/span><span data-preserver-spaces=\"true\">&nbsp;evidence&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/insight.kellogg.northwestern.edu\/article\/immigrants-to-the-u-s-create-more-jobs-than-they-take\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">shows<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;income per capita has increased more in regions of the country that became home to an influx of immigrants. Several studies found that immigrant workers lower prices while boosting incomes, which may be due to the supportive role low-paid immigrant workers have in enhancing the productivity of higher-level workers, according to&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.brookings.edu\/articles\/what-immigration-means-for-u-s-employment-and-wages\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Brookings<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The concentrated impact on new construction<\/span><\/h3>\n\n\n\n<p><span data-preserver-spaces=\"true\">Labor shortages in the construction industry during recent years have made it challenging and expensive to build new infrastructure and homes. In January, there were 422,000 job openings, nearly triple the number of positions available&nbsp;<\/span><span data-preserver-spaces=\"true\">10<\/span><span data-preserver-spaces=\"true\">&nbsp;years ago, according to the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/data.bls.gov\/timeseries\/JTU230000000000000JOL?amp%253bdata_tool=XGtable&amp;output_view=data&amp;include_graphs=true\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Bureau of Labor Statistics<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;(BLS). And more than&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.abc.org\/News-Media\/News-Releases\/abc-2024-construction-workforce-shortage-tops-half-a-million\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">20%<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of construction workers are 55 and older, nearing retirement age, while fewer young people are entering the trade, even as wages increase.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But immigrant laborers seek jobs in the construction industry. In 2022, they held&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/bankerandtradesman.com\/no-immigrants-no-new-housing\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">nearly 25%<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;of construction jobs, a record high, and about 31% of all positions in the building trades. Deportation, or even decreased immigration, would exacerbate labor shortages, reduce new construction, and ultimately lead to even higher housing prices in supply-constrained areas.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">A&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.haas.berkeley.edu\/wp-content\/uploads\/Howard_Wang_Zhang_Housing-Supply-and-Construction-Labor-Dayin-Zhang.pdf?ref=thebuildersdaily.com\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">study<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;published last year connects&nbsp;<\/span><span data-preserver-spaces=\"true\">the dots between<\/span><span data-preserver-spaces=\"true\">&nbsp;construction labor shortages induced by restrictive immigration policy and&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-145\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">housing affordability<\/span><\/a><span data-preserver-spaces=\"true\">. The report tracks a federal crackdown on immigration that began in 2008 and was implemented nationwide in 2013. More than 400,000 undocumented immigrants were deported during this time, leading to employment losses in the construction trade.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Three years later, the impact on residential construction was profound: More than 1,000 fewer new homes&nbsp;<\/span><span data-preserver-spaces=\"true\">were put<\/span><span data-preserver-spaces=\"true\">&nbsp;on the market in the median county, and the average newly constructed home cost an extra $50,000 when compared to the baseline.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Managing the Strain on Municipal Resources<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, while immigration plays&nbsp;<\/span><span data-preserver-spaces=\"true\">an important<\/span><span data-preserver-spaces=\"true\">&nbsp;role in a healthy housing market and economic growth, record-high immigration rates&nbsp;<\/span><span data-preserver-spaces=\"true\">are draining city resources and costing<\/span><span data-preserver-spaces=\"true\">&nbsp;taxpayers.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Many people assume that \u201copen border policies\u201d are to blame. But there are&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.axios.com\/2023\/10\/17\/us-mexico-border-open-borders-myth\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">more border patrol agents<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;than ever before, and enforcement actions against migrants are at an&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cbp.gov\/newsroom\/stats\/cbp-enforcement-statistics\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">all-time high<\/span><\/a><span data-preserver-spaces=\"true\">. Spending on immigration enforcement has&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.americanimmigrationcouncil.org\/research\/the-cost-of-immigration-enforcement-and-border-security\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">increased rapidly<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;over the last several decades, and President Biden\u2019s 2025 budget proposal dedicates an additional&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.whitehouse.gov\/briefing-room\/statements-releases\/2023\/03\/09\/fact-sheet-president-bidens-budget-strengthens-border-security-enhances-legal-pathways-and-provides-resources-to-enforce-our-immigration-laws\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">$25 billion<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE).&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Increased immigration rates can be&nbsp;<\/span><span data-preserver-spaces=\"true\">at least<\/span><span data-preserver-spaces=\"true\">&nbsp;partially explained by the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/blog\/us-labor-market-explains-most-increase-illegal-immigration\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">robust job market<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in the United States. People come here seeking steady work and higher wages, and the number of&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/fred.stlouisfed.org\/series\/JTSJOL\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">nonfarm job openings<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;in the last few years has been significantly higher than in any of the three previous administrations. While many migrants believe they will find a legal path to staying in the U.S., approval rates for green card applications are at a&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/briefing-paper\/green-card-approval-rate-reaches-record-lows\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">record low<\/span><\/a><span data-preserver-spaces=\"true\">.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">High immigration itself isn\u2019t detrimental to communities or taxpayers\u2014successful integration of immigrants into the workforce&nbsp;<\/span><span data-preserver-spaces=\"true\">is ultimately beneficial to<\/span><span data-preserver-spaces=\"true\">&nbsp;all citizens.&nbsp;<\/span><span data-preserver-spaces=\"true\">Rather<\/span><span data-preserver-spaces=\"true\">, the harm comes from insufficient&nbsp;<\/span><span data-preserver-spaces=\"true\">manpower<\/span><span data-preserver-spaces=\"true\">&nbsp;and underfunding for immigration courts relative to the elevated immigration rates, along with&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.cato.org\/testimony\/real-cost-open-border-how-americans-are-paying-price\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">restrictive policies<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;that hinder the legal immigration process.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For example, Mayor Mike Johnston&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nbcnews.com\/news\/us-news\/denver-mayor-johnston-let-migrants-work-biden-administration-rcna128297\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">believes<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;more work authorizations and a quicker path to temporary legal status would solve Denver\u2019s struggle to provide sufficient services to new migrants. While many undocumented immigrants do&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/map.americanimmigrationcouncil.org\/locations\/national\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">pay taxes<\/span><\/a><span data-preserver-spaces=\"true\">, new arrivals to sanctuary cities are often unhoused, relying on taxpayer-funded programs for medical care and other social services<\/span><span data-preserver-spaces=\"true\">, though<\/span><span data-preserver-spaces=\"true\">&nbsp;they are ready and willing to work and rent homes for their families.&nbsp;<\/span><span data-preserver-spaces=\"true\">It is<\/span><span data-preserver-spaces=\"true\">&nbsp;the&nbsp;<\/span><span data-preserver-spaces=\"true\">difficult<\/span><span data-preserver-spaces=\"true\">&nbsp;process of entering the workforce&nbsp;<\/span><span data-preserver-spaces=\"true\">that<\/span><span data-preserver-spaces=\"true\">&nbsp;leaves taxpayers to foot the bill while migrants wait for the U.S. to process a backlog of nearly&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/reason.com\/2024\/02\/21\/green-card-process-utterly-failing-to-help-immigrants-pursue-the-american-dream-in-lawful-and-orderly-ways\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">35 million<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;green card applications.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Because high immigration rates&nbsp;<\/span><span data-preserver-spaces=\"true\">are disproportionately burdening<\/span><span data-preserver-spaces=\"true\">&nbsp;some cities, policy initiatives should address those challenges. On the other hand, mass deportation or more restrictive policies could&nbsp;<\/span><span data-preserver-spaces=\"true\">have negative consequences for<\/span><span data-preserver-spaces=\"true\">&nbsp;the real estate market and the U.S. economy.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Rather than attempting to reduce immigration, which could lead to economic decline, the U.S. should focus on providing legal pathways for immigrants to enter the country and join the workforce.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Ultimately, real estate investors can follow immigration trends when making investment decisions to capture the increased revenue potential&nbsp;created by immigrant demand for housing&nbsp;in local markets.<\/span><\/p>\n\n\n\n<p><em><span data-preserver-spaces=\"true\"><strong>This&nbsp;is a complicated and controversial issue, and we know&nbsp;there\u2019s more to&nbsp;be said. Leave a comment below about what you think!<\/strong><\/span><\/em><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_54fb7fd65b72f050c4cef5917cf789fa\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_10ef668e3a1b3e2d3aabed455f6edfa8\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_f39338fac821279345cbcb42fe0dfe1b class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/how-the-immigration-crisis-impacts-real-estate&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/how-the-immigration-crisis-impacts-real-estate&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>A record&nbsp;300,000 migrants&nbsp;entered the U.S. through the southern border in December.&nbsp;Rather than trying to sneak past border agents, many surrendered to apply for asylum.&nbsp; Overwhelmed immigration courts take years to [&hellip;]<\/p>\n","protected":false},"author":613615,"featured_media":171312,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7384,7119],"tags":[],"class_list":["post-171309","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics-policy","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/171309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613615"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=171309"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/171309\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/171312"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=171309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=171309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=171309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}