Immigration Reform Can Shape America’s Economic Future
The BPC Immigration Task Force recently released a study that quantifies the economic impact of immigration reform. The study showed that immigration reform could jump-start the housing recovery by increasing residential construction spending by an average of $68 billion per year over a 20-year period.
What opportunities and challenges will immigration reform pose for future housing demand, housing markets, and/or economic revitalization?
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The United States is a nation of immigrants. Throughout our history, the economic benefits of immigration have been demonstrated over and over again. Today, there remains bipartisan agreement that the economic benefits of immigration and immigration reform are significant and will continue to play an important role in shaping our future economic destiny. This includes its impact driving housing markets, housing demand and economic revitalization.
Immigrants are a boon to our economy and housing market in several important ways:
- Contribute as entrepreneurs and employees. Studies have shown that immigrants are more likely to create their own businesses and almost one-half of Silicon Valley businesses had at least one immigrant founder. Immigrants also can be found working in a diverse range of occupations from healthcare, education and computers to construction and transportation.
- Expand and revitalize our aging workforce. Immigrants tend to be younger than they have been in the past with a majority under the age of 30 when they arrive in the United States. This trend means we can add millions of younger workers to offset an aging workforce and to help address the fiscal challenges of an aging population.
- Increase the demand for housing. Several studies have estimated that immigration reform has the potential to add as many as 3 million new immigrant homeowners and more than 1 million new renters, more than $500 billion in new mortgage originations and additional billions of dollars in new investment in residential construction between now and the year 2020.
- Strengthen and redevelop our neighborhoods. As immigrants move into affordable neighborhoods, they help to attract other families, businesses to provide good and services, and stimulate economic growth and rising home values.
To achieve these economic gains, however, policymakers also must remain vigilant to mitigate the challenges immigrants face that negatively impact their ability to contribute their full potential to our economic and social well-being. Some of the more significant challenges related to housing include:
- Discrimination. Immigrants, like minorities, can face discrimination and encounter obstacles to accessing the financing and other assistance needed to find and buy a home.
- Financial Education. Immigrants may not know about the U.S. system for buying or financing a home and could benefit from housing counseling and/or financial literacy programs.
- Availability and Affordability. Immigrants more recently have been locating in states such as North Carolina, Georgia, Kansas and mid- to small-sized cities where there have been greater economic opportunities, particularly in the past five years. These states and local communities may not be as prepared to meet their needs with a supply of affordable and accommodating housing.
Today’s debates about immigration reform are not about questioning the boon to our economy from immigration, but much more about sorting through the complexities and costs of implementing policy reforms to address the challenges posed by the most recent peak period of immigration occurring over the past two decades. As one former immigration policy official recently observed, healthcare reform should be viewed as a cautionary tale of a noble goal that has so far been buried under implementation challenges.
The potential for reform to impose needlessly expansive, costly and complex burdens on employers and others is real and must be carefully considered and analyzed. It is a delicate balance with serious consequences for future population, labor force and economic growth. Now more than ever, our leaders must be able to come together to craft a set of bipartisan immigration reform policies. The stakes have never been higher and will shape the economic future of our nation for the next generation.
Angela Antonelli is the former chief financial officer for the U.S. Department of Housing and Urban Development.
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