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Immigrants: The Nation’s New Homeowners


Chalk up another interest group that might back immigration reform: homeowners. Immigrants are buying up American homes, potentially saving the housing sector and providing a boost to the US economy. The Financial Times reports:

Although they represent close to 13 per cent of the US population, immigrants accounted for nearly 36 per cent of growth in home ownership between 2000 and 2010, according to a report by the Research Institute for Housing Americaand the Mortgage Bankers Association. While this has been driven mainly by the Hispanic community, other minority populations have also boosted gains.

It’s well known that high-skilled immigrants directly benefit the US economy. They have started 52 percent of Silicon Valley’s tech companies and receive 75 percent of patents earned at top universities. Each STEM immigrant creates 2.62 American jobs.

But what this piece suggests is that low-skilled and other immigrants also have something to offer. High numbers of immigrants in cities are associated with higher wages, higher incomes, and more high-tech industry, says Richard Florida. (Whether immigrants are simply drawn to cities with more opportunity or are partly responsible for the boom isn’t clear, but the correlation is there.)

Even large-scale immigration critic and Harvard economist George Borjas admits in a new report that both legal and illegal immigrants have grown the economy by 11 percent, or $1.6 trillion, since 1990 (though Borjas also claims that large-scale immigration transfers wealth from poor to wealthy Americans).

Lowering the barriers to high-skilled immigrants is a no brainer. The question of low skill immigration is more complicated. Legalizing the illegal inevitably creates incentives for new illegals to come. And the wealth effect is troubling; African Americans in particularly are vulnerable to economic competition from newcomers at a time when the fragile hold of many African American households on middle class status is under threat.

On balance we think a path to regularize the status of people here illegally makes human and economic sense, though we have yet to see the kind of commitment to border security from amnesty backers that must in our view complement such a move. It is also clear from the recent events in Boston that there are some national security questions that immigration policy has not fully taken on board. We’d like to see more attention paid to this issue. Beyond that, we favor a basically welcoming stance to a reasonable number of law abiding people who want to join their fortunes to ours year by year.

Those who worry about the consequences of immigration need to understand that to some degree America’s declining birth rate makes immigration necessary. The Boomers chose not to have enough kids to maintain the pension and entitlement systems they plan to rely on, and the Gen Xers continue the trend. Immigration is a necessary part of the policy mix America needs if we are going to deal with our demographic transition in a reasonable way; that reality has to influence the tough political debates on this issue.

[Passport image courtesy of Shutterstock]

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  • Soren Kay

    “Immigrants: The Nation’s New Homeowners”

    Hispanic immigrants also default on their homes… just look at any housing crash map… and good home owners get hurt in the process.

  • Luke Lea

    “Chalk up another interest group that might back immigration reform: homeowners. Immigrants are buying up American homes, potentially saving the housing sector and providing a boost to the US economy.”

    This doesn’t pass the laugh test.

    • Jim Luebke

      In Silicon Valley, a lot of homes are being bought cash-in-hand, and some are saying it’s immigrants from China that are doing it. Further speculation includes the idea that they’re coming here to dodge China’s one-child policy.

      I haven’t looked into this deeply enough to see whether it passes any tests, but it’s an interesting couple of hypotheses.

  • stevesailer

    This is what the disastrous 2003-2007 Housing Bubble in the 4 “sand states” of CA, AZ, NV, and FL was all about.

    Do we never learn?

  • Luke Lea

    Douthat on the real purpose of “immigration reform”

    From the NYT:

    When Assimilation Stalls

    THE immigration legislation percolating in the Senate … real priority is to accelerate existing immigration trends. The enforcement mechanisms phase in gradually, with ambiguous prospects for success, while the legislation’s impact on migration would be immediate: more paths to residency for foreigners, instant legal status for the 11 million here illegally, and the implicit promise to future border-crossers that some kind of amnesty always comes to those who come and wait.

    Today, almost 25 percent of working-age Americans are first-generation immigrants or their children. That figure is up sharply since the 1960s, and it’s projected to climb to 37 percent by 2050. A vote for the Senate legislation would be a vote for that number to climb faster still.

    The bill has been written this way because America’s leadership class, Republicans as well as Democrats, assumes that continued mass immigration is exactly what our economy needs. As America struggles to adapt to an aging population, the bill’s supporters argue, immigrants offer youth, vitality and tax dollars. As we try to escape economic stagnation, mass immigration promises an extra shot of growth.

    Is there any reason to be skeptical of this optimistic consensus? Actually, there are two: the assimilation patterns for descendants of Hispanic (particularly Mexican) immigrants and the socioeconomic disarray among the native-born poor and working class.

    Conservatives have long worried that recent immigrants from Latin America would assimilate more slowly than previous new arrivals — because of their sheer numbers and shared language, and because the American economy has changed in ways that make it harder for less-educated workers to assimilate and rise.
    As my colleague David Leonhardt wrote recently, those fears seem unfounded if you look at second-generation Hispanics, who make clear progress — economic, educational and linguistic — relative to their immigrant parents.

    But there’s a substantial body of literature showing that progress stalling out, especially for Mexican-Americans, between the second generation and the third. A 2002 study, for instance, reported that despite “improvements in human capital and earnings” for second-generation Mexican immigrants, the third generation still “trails the education and earnings of the average American,” and shows little sign of catching up. In their 2009 book “Generations of Exclusion,” the sociologists Edward Telles and Vilma Ortiz found similar stagnation and slippage for descendants of Mexican immigrants during the second half of the 20th century.

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