Americans are increasingly divided on the subject of immigration, but immigrants play a critical role in driving our housing economy, and, by extension, our long-term economic prosperity.
Phillia Kim Downs has been a luxury real estate agent in New York City for seven years. She is the daughter of South Korean immigrants who came to the U.S. in the 1970s seeking higher education and has been a homeowner since 2008.
“I rented for a year in the East Village of Manhattan but then bought a condo in Williamsburg,” she explained. “Rent is so expensive in Manhattan, so my parents thought it would be a better investment to buy property.” Downs used her savings as well as some financial assistance from her parents to purchase the condo.
“Homeownership has been awesome,” Downs said. “It is definitely part of the American Dream, and it is definitely an investment for our family.” She said that her parents feel a sense of pride in having been able to help her purchase the condo since they “came to this country with nothing, really.”
Downs’ father’s first job in the U.S. was working his own hot dog stand at Yankee Stadium. At the time, he spoke limited English. “To have come from that start, saving money, raising a family here and sending two children to college, and now helping purchase a home for his daughter and to have a home of his own in Philadelphia — I’d say they feel pretty good about themselves.”
Downs’ story is not unique. It is the story of millions. Even as native-born Americans whose families have lived here for generations may have grown disillusioned about homeownership in light of the Great Recession, the American Dream still holds allure for the nation’s vast immigrant populations.
And that allure has serious economic impacts on the United States that are too often overlooked. In an election year where plenty of candidates are talking immigration reform (and some of them pushing for measures that would severely limit immigration), what does closing the borders (or at least substantially limiting influx) really mean compared to keeping them open and even easing access to citizenship?
IMMIGRANTS DRIVE HOUSING AND ECONOMIC GROWTH
Harvard University’s Joint Center for Housing Studies indicates that immigrants have made up 40% of housing demand in the U.S. since 2010. And within a few decades, housing analysts expect immigrants and their progeny to be responsible for the majority of the net growth in households in this country.
Between 2000 and 2013, immigrants or the children of immigrants have accounted for 57% of the country’s population growth, according to a 2014 white paper from the Immigration Task Force of the Bipartisan Policy Center called “Immigration and Housing: Supply, Demand, and Characteristics.” At the same time, immigrant labor has become a critical component in the nation’s construction workforce with 25% of all construction workers identifying as immigrants.
“Immigrants’ growing role in supplying construction labor and driving demand for new housing units makes immigration an important contributor to U.S. economic prosperity,” the white paper authors state. And given that a sluggish housing market overall remains the major drag on post-recession economic recovery, the authors contend that immigrants can and will play a substantial role in re-establishing a healthy housing market.
“[Immigrants] are a big part of housing markets both on the supply and demand sides,” said George Masnick, senior research fellow at the Joint Center for Housing Studies at Harvard University. “They build and buy houses.”
That impact becomes even bigger when one factors in the children of immigrants. “Immigrants and their children are the only thing keeping U.S. labor force growth from going under zero,” said Dowell Myers, professor of policy, planning, and demography at the University of Southern California. “They also patch up the weak spots in our housing market.”
Myers points out that immigrants’ impacts on the housing economy have been growing steadily for decades. In the 1970s, they made up 6% of growth in housing demand. By the 1990s, that impact had grown to 21%. By the 2000s, that number had reached 39%, a number that Myers said is holding steady.
Masnick adds that by 2010, in both California and New York, immigrant household growth represented almost all of the housing growth in both states.