How will mass deportations of undocumented immigrants affect California's housing market?
- Negatively. (37%, 240 Votes)
- They will have no impact. (33%, 214 Votes)
- Positively. (30%, 190 Votes)
Total Voters: 644
President Trump recently characterized his deportation plans as a “military operation.” While members of his administration later clarified that no military force will actually be used, strong rhetoric like this, as well as memos directing law enforcement to deport any and all undocumented immigrants they encounter, make one wonder about the future of California, whose economy depends upon our undocumented immigrant population of roughly 2.6 million individuals.
This article does not address whether undocumented immigrants ought to be here in California or not. But it does examine what will happen to our state when deportations occur.
California’s agriculture, hospitality and construction industries all rely on the cheap labor supplied by undocumented immigrants to keep prices at the level that consumers demand. Mass deportations of undocumented immigrants will decimate these industries, the impact rippling throughout California’s economy — including our housing market.
Trump’s plan widens the net from the 1.4 million undocumented immigrants targeted for deportation under President Obama’s policies to nearly 8 million people nationwide, according to the Los Angeles Times. This includes any individual who has been charged for a crime (even those who haven’t been convicted) or who is believed to have committed an act that may warrant being charged for a crime.
How will more deportations impact the housing market? For the answer, a look back at recent history is required.
Deportations fueled the foreclosure crisis
A greater share of Latino/a homeowners lost their homes during the foreclosure crisis than any other ethnic group, according to the Center for Responsible Lending. While this was partly due to the shockwaves of predatory lending during the Millennium Boom — when lenders targeted minority homebuyers for subprime mortgage products — the full story is more complicated.
3.6 million individuals were deported from the U.S. from 2005-2013. The number of deportations steadily increased each year, with about two-and-a-half times as many individuals being deported in 2013 compared to 2005, according to the journal Sociological Science. This activity continued and increased throughout the recession and foreclosure crisis.
While about 66% of undocumented persons in the country are Mexican or Central American, a whopping 94% of these deportees were Mexican or Central American.
In a New York Times interview with the authors of the study in Sociological Science, they claim many Latino homeowners rely on at least one undocumented immigrant to provide for some or all of their expenses. About one-third of undocumented immigrants live in owner-occupied homes. Therefore, when that person gets deported, the household loses that income stream. When the household can’t make up the difference, a home sale or foreclosure is imminent.
The authors liken deportation to a divorce, death or other major life event that can lead to foreclosure. Further, as detailed in a Federal Reserve Bank of Boston study, the number one reason for a household to default on their mortgage is losing a major income stream.
The last foreclosure crisis dragged down home values, spread blight and caused other sectors of the economy to suffer. Future deportations on any large scale will only harm California’s housing market.
How many homes will be foreclosed upon if mass deportations occur in California?
Say Trump’s administration is successful at deporting the entire population of roughly 2.6 million undocumented immigrants in California — a most unlikely feat. Since one-third live in and contribute income to owner-occupied homes, about 860,000 homes would be at risk for foreclosure. For perspective, that’s about 12% of California’s 6.9 million owner-occupied homes.
The rest of the undocumented immigrant population — about 1.7 million individuals — lives in rentals. Mass deportations of these individuals will put landlords in a bind.
However, the administration is unlikely to be able to deport undocumented immigrants at the large scale their plan calls for. The government simply lacks the resources (or public support from the many industries that rely on undocumented, cheap labor) to do so.
Therefore, future deportations may make a dent on our economy and housing market, but the impact won’t be catastrophic. The size of the dent will depend on the magnitude and duration of deportations. Four years of consistently higher deportations will slowly eat away at California’s economy and housing market — unless our state acts to stop deportations from getting out of hand.
California is home to several “sanctuary cities” which refuse to cooperate with immigration officials, including Los Angeles and San Francisco. A new bill is currently moving through the state legislature which may turn the entire state into a sanctuary for undocumented immigrants. Senate Bill 54 continues to advance despite Trump’s threat to withdraw federal funding from sanctuary cities.
Whether or not this bill ends up becoming law, California will weather the storm. How do you see future deportations affecting California’s housing market? Share your thoughts in the comments below.
Related article:
ITIN mortgages for homebuyers without social security numbers
While reading the artical my blood was boiling in disbelief. How ignorant is our country becoming? Illogical. Than, I began to read the comments and to my surprise, with all who responded my spirits have been uplifted, for there is hope that we can bring back the pride and spirit of Amercanism. Only then can we help and inspire all less fortunate people and nations.
I am an “immigrant “! Legally…
One flag, one language, one Nation.
Thank you for all articulate responses.
Zivko
Enough with the PC anti-American agenda coming from the left!! Primary concern should be for the citizens of this great land. I live in CA, am Hispanic, and voted Trump. He is right on target. First Tuesday stop with the nonsense. America first!
Thank you, First Tuesday, for omitting the political and addressing only the economic/social aspects of the law in question AND its implications. I think you did an admirable job. It seems as though there is a solution, however. The economic solution, perhaps, would be for the illegals to become citizens, pay their taxes, play by the rules, kick in their fair share and not drain the system. Any racial considerations do not apply to the activities of real estate professionals. I have not thought through all the details, so wonder what additional problems this solution idea of becoming citizens might bring up. These additional problems will need to be kicked around so that solutions can be found for them, too. Eventually a “big picture” solution will click into place (it always does, as we real estate professionals know) and the players of this smaller game will be ahead of the bigger game.
Does anyone care to problem-solve with me?
Well, if Frist Tuesday is going to use my education fees to print liberal talking points. I won’t be using them again. Without the rule of law, we have no real estate market, you idiots. What has happened to these people’s ability to think things through to their logical end?
Here, here!
I couldn’t agree more!
Not all of us in California are liberal, SJW, America last morons that spend all day watching The View and planning our next protest rally. Some of us understand how the economy works and a few of us have children with more life experience than this propaganda wielding nut.
I personally doubt that very many illegal aliens are home owners. I hope I’m right about that, because if I’m wrong, just think about all of the legal citizens who had their identities and SS#’s stolen so these criminals could get their loans.
I’m done with you First Tuesday. I refuse to support businesses like yours.
Immigrants are people who come to our country and go through the legal process to be here. Illegal border jumpers should NOT be called immigrants even if the word illegal is put in front of it. They committed the CRIME of crossing the border illegally and thus should be called CRIMINALS. THAT IS THE POLITICALLY CORRECT TERM!
If they were gone tomorrow I believe the market price of homes will adjust some and everything will be ok in the end.
Bravo
Well said
There are laws for a reason. Illegal is illegal. Period. Other countries do not allow illegal immigration, why should we.they cannot get loans,do not have credit,fake social security numbers,or use their American born kids numbers.why should we pay for criminals and illegals.
I agree!!!
More politically biased articles from First Tuesday?
By your logic, why not just let anyone into the US without any restrictions – that should definitely boost the RE market. Where is this thinking coming from?
Among other misleading facts, many Latinos lost their homes during the foreclosure crisis because the government forced lenders to lend to high risk borrower who shouldn’t have received those loan in the first place based on regular lending requirements. Lenders would not have made those loans. Democrats were pushing the agenda of “everyone deserves to have a house” – that’s how we ended up with “predatory lending.” The predictors were not the banks – the banks were forced to make loans to low income families and the government guaranteed those high risk loans. Anyone who can think for them self can understand all of the other implications.
Can we please have more balanced viewpoints from First Tuesday?
Please try to form a survey that at least pretends to be unbiased. This is that old lawyer joke, “Are you still beating your wife”? Though not quiet as funny
So true!
Serge: you obviously know nothing about mortgages or how they work. The banks were not “forced” to make loans to low income families. The government did not “force” lenders to lend to high risk borrowers…however, they did allow those risks. This is why we still need the Glass-Stegall act and why it should be put back into place.
The banks created a product with the collusion of Wall Street investment firms to sell on the open market. Those products were neg-am loans and no-down loans. They were created because those products made money for the banks. Just like any other product on the market, they found their buyers. Lenders and appraisers were unwitting accomplices as they sold these products to whoever could qualify ACCORDING TO THE STANDARDS OF THE CREATORS OF THE PRODUCTS; THE BANKS.
One more thing: if you are going to post on a public forum, either brush up on your grammer and spelling or use spell-check. It usually comes with all modern computer programs.
Yea…”fair and balanced,” just like Fox and Breitbart.
When discussing this issue the distinction between “immigrants” and “illegal immigrants” needs to be clear.
We should insist that if the immigrant who comes here does in good faith become an
American and assimilates himself to us he shall be treated on an exact equality with every one else, for it is an outrage to discriminate against any such man because of creed or birth-place or origin.
But this is predicated upon the man’s becoming in very fact an American and nothing but an American. If he tries to keep segregated with men of his own origin and separated from the rest of America, then he isn’t doing his part as an American. There can be no divided allegiance here. . . We have room for but one language here, and that is the English language, for we intend to see that the crucible turns our people out as Americans, of American nationality, and not as dwellers in a polyglot boarding-house; and we have room for but one soul loyalty, and that is loyalty to the American people.
Your writing sounds affected and too verbose. Try to keep your message simple employing more direct writing techniques. Your message might be more effective if it were not so convoluted. Keep trying. Good luck.
MJ; are you aware that the United States does NOT have an official language? English may be the common tongue, but we definitely have room for more than one language here.
Trina and Simone St Clare, you realize that mj’s post was a direct quote from Teddy Roosevelt, right? Widely considered to be one of the best writers, orators, and Presidents ever?
http://www.snopes.com/politics/quotes/troosevelt.asp
If we are talking about legal immigrants, yes, they can impact the real estate industry. Legal immigrants come here well educated, well vetted and following the rule of the United States of America. They assimilate to the American Way immediately.
But if you are referring illegal immigrants, I’d like to know how in the world they can impact positively the real estate industry ?? Can they buy a house if they are here illegally. How do they get their social security numbers? How do they establish credit if they are illegals? Isn’t there a law for breaking our laws? It is also a high risk for investors to rent out their hard earned investments to illegals who can just leave you with damaged goods and properties especially since they have the sanctuary cities and the $10 million dollar legal defense fund to fight you paid for by our taxes !!
The answer to most of your questions is in the original article.
There are immigration laws for a good reason. If it was good for anyone to cross the border then we would not need laws. The fault of illegals coming here is mostly due to government corruption creating incentives for illegal immigration. Although some wealthy corporations might benefit by the working illegals there are many more on welfare that taxpayers must support. Whenever a corrupt government creates a problem, fixing it will be more extreme than solving it long ago and there will be consequences, but to do nothing will just allow the problem to fester even more with a more serious disaster in the future. No one can know for sure what the result will be of deporting illegals, but it is the right thing to do and the laws require it. Whatever happens we will find solutions and society will be better for it in the future. I say deport them and give them a route to re-enter legally if they have no criminal history. After all, it was our corrupt government that encouraged them to come here in the first place. No one wants to hurt others, but we have a system of laws and to pick and choose which ones to enforce gives dictatorial powers to our government – the very last thing we should ever do.
A law is s law I ageee with president Trump
Interesting perspectives and comments. This country consists of Immigrants and that’s what makes America what it is today. As much as we don’t like to admit, fact is, immigrants do contribute to our economy, even those “undocumented illegals”. Think for a moment, how many of your son’s daughters, parents, cousins etc… would go out and pick fruit, vegetables, and other agricultural low end labor type duties? I’m not sure their would be many in line for the job, I could be wrong? I know my own would oppose this type of laborious work and would rather employ themselves in other fields of work. These undocumented workers help many of our local farmers continue to grow their “American Legal” agricultural businesses, so we Americans can enjoy the low cost of produce and fruits, this way growers can ensure that supply always meets our demand.
So there is a difference between “Immigrant Workers” and “illegal immigrants”. Many come from the EAST to bear their young in America, only so they can have benefits natural born rights and then get on a jet and fly back to who knows where. That’s B.S.! Especially if they decide to hatch an egg and they leave after it has hatched. I say, you come to America, you stay and “work” in America and your child earns the right to be “American”. Now, when it comes to immigrants brought in with their hands wide open by former Presidential governmental campaign, I think it was ludicrous! Especially since our homeland is under constant threat. I don’t care what that means to Real Estate, it won’t mean anything when your rental building or properties just got blown up or vandalized by so called homeland threats. Surely, any anti-American would bring more that can do harm to our society. I do feel bad that so many of these immigrants were refugees in their country, however they have not contributed to our economy, and cannot and should not expect free everything! Immigrants that can prove they have contributed to society, surely there may be a chance for them. As long as they adopt American ways and seek to become productive members of society, much like the immigrant worker mentioned above. The key words are “PRODUCTIVE”, “WORKER”, and not “CRIMINAL, LAZY, or THIEF”! For those that want to earn the American way, I say sure let us: 1. Screen them first properly, 2. identify them in a database that will maintain their whereabouts accessible by local, state, and federal law enforcement. 3. abide by & require them to register prior to moving from State to State, County to County (as they are still “not citizens” and that is a right many have died for), 4. pass the background, 5. Allow them the opportunity to work/learn/contribute to society 6. legalize and grow as other historical productive immigrants have. However, those with criminal backgrounds, involved in a continual trend of criminal activities, only take up valuable resources from our productive society and should be sent back to their country ASAP, whether that’s EAST/NORTH/SOUTH/WEST of U.S. End of story.
As far as home buyers, there will be plenty to come as millennials continue to grow into stable incomes, others will continue to follow and supply and demand will once again correct itself. If you have been in real estate for 20 years +, you would understand. And yes Richard, I also agree with our new President Trump and his policies. I think America needs to think of America first. BTW, illegal comes in many ethnicities, race, and countries, not just South America, but overseas, EAST, NORTH, WEST, Everywhere! All should be screened. And with regards to this Ca. bill Senate Bill 54, please kill this. My goodness, is California that stupid? ? Please tell me we have intelligent minds who understand what this could mean to California. Otherwise, keep your Governor, and let the Feds please split California, please!, Split South from the North, I’d be happy to do that as well. They can keep San Francisco, just remember, you’ll be glad you have Alcatraz, you will need it to house all the crazy criminals sooner or later with these crazy policies.
Our immigrants are also our entry level buyers and renters. Without tbem that bottom calls out qnd everything else droos down.
I disagree with you Carrie Reyes. California’s economy will not suffer because of ‘mass deportation’. I don’t know how illegals getting deported would have a negative effect on real estate. Although they provide cheap labor in the agricultural, restaurant and domestic servant industries, statistics show 2/3 receiving public assistance STAY on public aid by having ‘citizen’ children. If anything California welfare rolls would be reduced.
Don’t get me started on welfare! Now that is another HUGE problem in California. Welfare should be more restrictive and should REQUIRE parents are showing proof that they are TRYING to get a part time job. I see SO MANY young , really young, latinas with their babies entering a Wic office next door to my job. They pull up in nice cars and name brand clithing, yet they are getting FREE food for their many kids!!! It hurts me to see how much of my paycheck gies towards welfare. So mad!!!! So unfair!!!!
Seriously! When my wife was on unemployment, she had to prove once a week that she was actively searching. Bearing in mind that unemployment compensation is NOT government money – it’s YOUR money that they take from YOUR check every time you get paid. How is it that the system mandates that you prove you’re trying when you’re only getting back money you paid in, but there is no such mechanism to get taxpayer money?