Study: Immigrants help housing markets

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By Sherry Robinson

An old friend living in my former neighborhood said he’d witnessed a wave of homebuyers, all undocumented immigrants. He considered this a step up from the slumlords and crack houses we worked to get rid of. Furthermore, the new occupants were serious about home improvement.
 “They may not paint their houses the same colors we would have, but they’ve fixed them up, built fences and planted flowers,” he said.
We represented the previous wave — young professionals with modest incomes who thought we could turn around a stagnant area, one house at a time. We did, sort of, but the pace of change lagged the pace of crime. Most of us gave up and moved on. My friend stayed because he liked his house, and it was close to work.
A new study shows this latest wave isn’t an isolated case.
Immigrants, 40 million of them, have added $3.7 trillion to United States housing wealth and helped “stabilize less desirable communities where home prices are declining, or would otherwise have declined.” This is according to Americas Society/Council of the Americas and Partnership for a New American Economy.
In case you doubt the sources, have you noticed that the big home-improvement stores feature bilingual signs? Many retailers have joined them.
Previous studies have shown that immigrants, who are typically working age, will help fill the labor gap of retiring boomers. The immigrants are also good consumers. Spend some time in Walmart (I try not to), and you’ll hear multiple languages being spoken. Why? Because to them it’s the retail Promised Land with goods that are far cheaper than they could buy in their home countries.
Their collective demand for housing and their purchasing power “bolster the value of homes,” says the study and “they shift demand for housing within metro areas toward neighborhoods that had fallen out of favor.” As those neighborhoods stabilize, they become more attractive to U.S.-born workers. In other words, the wrong side of the tracks becomes just another place to live without pricing other people out of the market. My wave of urban pioneers, on the other hand, could have resulted in gentrification that would have made the ‘hood less affordable.
The biggest impacts were “in thriving Sun Belt cities that remain affordable and in declining Rust Belt cities.”
The study shows the big increases in New Mexico to be Bernalillo, Santa Fe and Doña Ana Counties, with foreign-born populations of 11, 12.9 and 12.8 percent in 2010, followed by Lea and San Juan counties. Nationally, immigration had the biggest impact on the housing market in the Houston area. The study also suggests that Chicago might have looked more like Detroit without the arrival of 600,000 immigrants since 1970, taking up the slack of the 900,000 U.S.-born Americans departing.
Yes, but don’t immigrants gravitate to thriving communities? They do, but they also go to communities where they have a social network of fellow immigrants, and in many cases, this is the deciding factor because it leads to jobs, housing, friends and comfort. The study analyzed the impact of immigrants who chose this path (a statistical technique known as instrumental variable analysis).
Yes, but American houses have gotten bigger. The study accounts for the age of homes, vacancy rates, market conditions and the number of units in a county, along with the characteristics of a county.
Yes, but what about the housing bubble and burst? The study covers 1970 to 2010; the housing bubble and burst are a small slice of that period. Even so, the study didn’t use pricing data between 2001 and early 2006, the bubble’s maximum stretch.
As we debate immigration, it’s helpful to look at numbers and realities. We might be surprised at the transformation of some of our worst neighborhoods without one dollar of government help.