Restrictions on legal immigration would have negative repercussions for the real estate market, according to a report from The Counselors of Real Estate (CRE).
The findings come from the organization’s list of the top 10 issues affecting real estate in 2017-2018, an annual report that predicts and interprets the issues and trends that will have the highest impact on those who own, live, develop and invest in real estate properties.
Established in 1953 and headquartered in Chicago, the Counselors of Real Estate is an international group of high-profile professionals including members of prominent real estate, financial, legal and accounting firms as well as leaders of government and academia who provide expert, objective advice on complex real property situations and land-related matters.
Scott Muldavin, CRE
Last week, President Donald Trump unveiled legislation intended to reduce immigration to the U.S. If Congress passes the bill, it would reduce the number of legal immigrants to the country from one million per year to half that number over the next 10 years and could negatively impact housing, development and jobs, according to CRE.
“Reduced workforce numbers caused by restricted immigration would negatively impact property sectors such as hospitality (hotels and restaurants), retail (stores, online ordering and related logistics businesses), residential and multifamily development and construction, and a multitude of service industries within and outside of real estate,” says Scott Muldavin, chair of CRE.
Companies ranging from tech firms to real estate finance often rely on highly skilled immigrants to fill positions. CRE notes that restrictive immigration laws would not only reduce the number of skilled employees in the workforce, but could stall development projects due to a shortage of labor.
Additionally, the study predicts that immigration restrictions could impede the multifamily sector. “Immigration is a dynamic source of new household formation too,” says Muldavin. “New immigrants tend to rent, which boosts demand for multifamily housing, especially in gateway cities.”
According to CRE, recent surveys suggest immigrant populations aspire to own homes and move from cities to suburbs and back in search of employment.
The report predicts that by limiting immigration, labor and homeownership rates will be constrained, an effect that in the long term will leave behind a smaller labor force to support communities with an aging population.
The CRE Top Ten Issues Affecting Real Estate 2017-2018:
- Political Polarization and Global Uncertainty
- The Technology Boom
- Generational Disruption
- Retail Disruption
- Infrastructure Investment
- Housing: The Big Mismatch
- Lost Decades of the Middle Class
- Real Estate’s Emerging Role in Health Care
- Immigration
- Climate Change
Click here to read more about these issues.
— Camren Skelton