How Immigrant Neighbors Make You Richer
Report looks at immigrant investments in the housing market.
June 20, 2013— -- Immigrants help stabilize the U.S. housing market and represent trillions of dollars in housing wealth, according to a report released Thursday.
The report found that immigrant homeowners help build up less-popular areas, making real estate investments that eventually draw in more residents.
Jacob Vigdor, a professor of public policy and economics at Duke University and the researcher who compiled the report, said that the trend is happening across the country.
"They've taken what would have been a downward spiral and they've stopped it and reversed it," he said.
The data was compiled by the Americas Society/Council of the Americas and the Partnership for a New American Economy. It will be part of a broader report on the economic contributions of immigrants set to be released later this summer.
The groups also put together an interactive map to illustrate how immigrants affect home value on a local level.
"What you get in some of these cities where immigration has come in, is that it basically stops the hemorrhaging of people," Vigdor said. "You take property that had been abandoned and you put it back on the tax rolls."
Take Chicago and the surrounding areas, for example.
The number of U.S.-born residents has declined by 900,000 since 1970. But over that same period, 600,000 immigrants arrived, "blunting what could have been a catastrophic impact on the local housing market, along the lines of those seen in Detroit and other Rust Belt cities," the report said.
Once vacant properties get new owners and money starts flowing back into city services, other residents are more likely to relocate to those areas, Vigdor said.
The pendulum swings both ways when it comes to immigrants and housing. Homeownership rates went up for immigrants during the first half of the 2000s, but when the wave of foreclosures hit later that decade, immigrants and Hispanics were slammed, defaulting at higher rates than their white counterparts.
Still, the data released on Thursday shows that newcomers play an important role in revitalizing communities by investing in homes.
That's one more reason to support legislation that will open up our immigration system, according to New York City Mayor Michael Bloomberg, co-chairman of the Partnership for a New American Economy.
"At a crucial time for our economy and our housing market, immigration is helping support housing values, revitalize neighborhoods, and add trillions of dollars to U.S. housing wealth," Bloomberg said in a statement. "This is just another example of how immigration helps our economy and why we must reform our system so that immigrants can continue contributing to an industry that is critical to America's future."