As the political debates around immigration get hotter and hotter, real estate professionals are understandably concerned about its impact on the industry and California’s economy as a whole.
In the past, we’ve asked readers to weigh in on how a generalized “immigration reform” might impact the housing market. But in the last couple of years, we asked specifically about the loosening of immigration restrictions, with murky results. In 2017, readers were enthused about laxer restrictions, with 51% of respondents foreseeing a positive outcome. And yet, the very next year, that number was only 31%, with 44% of respondents claiming looser restrictions would result in a negative impact on California’s housing market.
According to a more recent poll, however, our respondents don’t think much of tightening these restrictions either.
So what conclusions can we draw from these varying responses on immigration reform?
The bottom line
First of all, immigration is not only a touchy subject, it’s also complicated and wide-ranging. The hot-button discourse around the topic ranges from the rights of undocumented migrants already living in the country to reforming admittedly strained systems for obtaining legal citizenship from outside the United States.
However, the uncomplicated fact of the matter is that immigrants — undocumented or otherwise — have a net positive effect on the economy, including the housing market.
Undocumented migrants are an especially important part of the California market, as they — unlike in other states — have the ability to become homeowners.
An undocumented person looking to take out a mortgage for a home need only obtain an Individual Tax Identification Number (ITIN). Still, fear of deportation and the need to be mobile to follow jobs (particularly for agricultural workers) has caused homeownership rates among undocumented immigrants to remain lower than average.
However, considering the number of California residents leaving the state on account of the soaring cost of living, among other factors, international migrants represent a growing portion of the economy with each year that goes by.
Tighter immigration restrictions — both those that target undocumented migrants and those that make it more difficult to obtain legal citizenship — will do no favors for the California housing market. Studies have shown that broadening pathways to US citizenship has nothing but positive impacts on the country’s economy, incentivizing skilled workers outside the US to move here and contribute to its growth.
Whatever your personal stance on the question of immigration, it’s an undeniably massive part of California’s culture and its housing market, especially as we consider the controversial statewide sanctuary city law that went into effect nearly two years ago. In the state of California, migrants are here to stay, buy homes and, ultimately, fuel our state’s growing economy.