Immigration reform could bring big boost to housing market
By Holly Dutton
A handful of bi-partisan Senators, including New York Senator Chuck Schumer, formally filed an immigration bill last week that would overhaul immigration practices in the U.S., giving a path to residency to the more than 11 million undocumented immigrants already in the country.
Summarized, the bill would grant residency to most undocumented immigrants who arrived in the U.S. before Dec. 31, 2011. They would have to wait a total of 13 years from first being legally recognized to live in the U.S. to gaining citizenship, and pay $2,000 in fines.
“This concept has the potential to lift demand for the nation’s excess in homes,” said Schumer at the time.
The bill would make a sweeping change to the issue of illegal immigration, and according to some experts, the housing market as well. According to the National Association of Realtors (NAR), minorities and immigrants made up 35 percent and 19 percent, respectively, of the first-time buyer market back in 2007.
Those numbers are only expected to grow as more foreign-born citizens not only settle in the U.S., but qualify to apply for mortgages here.
“Immigrants are an important and growing source of demand that has bolstered housing markets in recent decades,” said Professor Dowell Myers of the Population Dynamics Research Group at the University of Southern California in a March report from The Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA).
“Growth in housing demand in recent decades has been more stable among foreign-born than native-born households. This is because increases in native-born demand have been subject to large swings in the size of cohorts reaching ages 25 to 34, the most common age of entry to the housing market.
“In contrast, inflows of new immigrants have not varied widely in recent decades, and in addition, the strong upward mobility of prior immigrants has led to continued increases in aggregate demand for home ownership.”
Since the 1980’s, the amount of foreign-born homeowners has increased more and more each decade, from 0.8 million in the U.S. from 1980-1990, to 2.1 million between 1990-2000, to 2.4 million between 2000 and 2010, according to the MBA report.
That number is expected to reach 2.8 million by 2020.
“It certainly is an important number in the context of what New York is made of,” said Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm. “This is a tremendous entry point for people coming into the United States.”
New York State is second in the nation in the total number of foreign-born workers, with 2.45 million residents making up 27 percent of the state’s workforce, while 1.9 million immigrant residents make up 43 percent of New York City’s workforce, according to 2009 statistics from the Department of Labor.
Immigrants account for over $200 billion in annual economic output in the U.S., and in New York City, the top 10 neighborhoods with the highest level of immigrant residents had stronger economic growth than the rest of the city between 2000 and 2007.
A study from the University of California titled Assimilation Tomorrow found that immigrants from the 1990’s are integrating into mainstream society better than ever before, with the percentage of immigrants who own rather than rent their homes projected to rise to 72 percent in 2030, a huge leap from 25.5 percent in 2000.
The bipartisan bill proposed in Oct. 2011 by Senators Schumer (D-NY) and Mike Lee (R-UT) called the Schumer-Lee Bill would grant a residency visa to anyone who spends $500,000 or more on a home in the U.S.
“As a city, it could create a more fluid market in the sense that you now have people that are no longer off the grid, and that applies to credit, obtaining financing, paying taxes, things like that,” said Miller.
“Bottom line, the shadow economy moves to the grid, and that comes in the form of credit and revenue for the city in terms of taxes. I think the way it’s going, we hope it has a positive impact.”
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