The Impact on Real Estate–It’s Not Pretty

Restricting Legal Immigration Could Negatively Affect Real Estate

Immigration is a dynamic source of new household formation.

Immigration has been front and center in the news since well before the U.S. political elections last November. Now it is making headlines again with new political proposals to reduce the number of legal entrants to the U.S. from today’s one million per year to half that number, over the coming decade.

Sharply restricting immigration would result in a net negative for real estate, a group of top property advisors predicts, earning Immigration a spot on The Counselors of Real Estate® (CRE®) annual list of top business and real estate disruptors –The CRE 2017-2018 Top Ten Issues Affecting Real Estate— for its negative impact on housing, development, and jobs.

While the CRE professional association does not advocate or take positions on policy issues, the group of high-level property advisors practicing in more than 50 real estate specialties notes that tightened restrictions on the numbers of people entering the U.S. will negatively impact multiple industry sectors from housing to hospitality to retail.

Restrictive immigration laws, emphasizing concerns about security, and terrorism, appeal to a voter base concerned about jobs lost to illegal immigrants, the CRE report notes. At the same time, companies ranging from tech firms to real estate finance companies bemoan the lack of qualified workers; many positions in these sectors are typically filled by highly skilled immigrants.

Immigration and Housing are Intertwined

“Immigration is a dynamic source of new household formation, too” says Scott Muldavin, CRE, Chair of The Counselors of Real Estate. New immigrants tend to rent, which boosts demand for multifamily housing, especially in gateway cities,” he said.

“Immigrants also aspire to own homes, and are likely to move from cities to suburbs and back again in search of employment,” said Peter Burley, CRE, a real estate economic research executive who chaired the team that spearheaded this year’s CRE Top Ten report, “Labor mobility and home ownership rates will be constrained by limiting legal immigration.” Burley also said that decreasing population growth,…

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