With the recent announcement of President Obama’s Executive Order on immigration reform, responses from both sides of the political spectrum have been mixed. However, the reform can be expected to spur new opportunities for growth in the housing market.
Last Thursday, President Obama made the heavily anticipated announcement to the public. To recap, the Executive Order broadens the existing “dreamer” program (Deferred Action) to include anyone who entered the U.S. as a child and provides work authorization to parents of citizen or legal resident children, who have been in the U.S. for five years. The order purportedly focuses immigration enforcement resources on the deportation of criminals and felons, and prioritizes efforts on national security threats, rather than those “whose detention are not in the public interest.”
Despite significant public outrage regarding the President’s actions, recent bipartisan data suggests that this reform may have a positive impact on the housing industry. The Bipartisan Policy Center released a report in October 2013 titled, Immigration Reform: Implications for Growth, Budgets and Housing, in which the policy center contended that lasting immigration reform would encourage economic growth, reduce the federal deficit, and spur new demand for residential housing.
Many professionals in the housing market have previously ignored the immigrant homebuyer segment because they assume it is small or that most would not be able to purchase a home. However, the Research Institute for Housing America released a study in 2013 that identified immigrants as an increasingly significant market of homebuyers. The research indicated that immigrants accounted for nearly 40% of the net growth in homeowner households from 2000 to 2010.
With lasting immigration reform, the projected growth for the coming decade will likely be significant. In an interview with the Washington Post in early November, Secretary of the U.S. Department of Housing and Urban Development Julián Castro commented on his opinions regarding immigration reform and how he believed it would impact the housing industry.
Relating to the anticipated changes, he stated, “It gives more certainty to the 11 million or so folks who are here, who are undocumented. You will see more folks who now are in limbo deciding in the future to actually purchase a home.”
One of the biggest challenges professionals in the housing market will have in reaching this growing market segment is the industry’s ability to understand the cultural nuances that exist in customer service relations and purchasing preferences. Additionally, immigrants often have thin credit files and require financial education upon initiating the home purchasing process.
The National Association of Hispanic Real Estate Professionals highlighted some of these challenges in the debut of the theatrical production titled, 53 Million & One, at their national conference in October. Successful real estate agent and Latino immigrant, Gerardo “Jerry” Ascencio, performed the story of his life experience, underlining the cultural influences and challenges that often define this growing demographic in the housing market.
Businesses in the housing industry that want to capitalize on the growth of the immigrant homebuyer should consider first receiving cultural competence training for all staff, including education regarding the specific challenges and behaviors within the context of purchasing a home. Secondly, professionals should reach out to local community organizations and partner with them in providing educational materials and related events. By developing a reputation as a trustworthy resource for immigrant and cross-cultural homebuyers, there is evidence that businesses can expect customer loyalty and long-term growth.
Whether or not one believes this was an appropriate action for the President to take, it is apparent that professionals in the housing market have a significant opportunity to capture new growth. As Jerry Ascencio stated in his performance, “If not you, then who? If not now, then when?”