Trump's immigration crackdown faces market hurdles
Long before Donald Trump was elected president, housing analysts took a dim view of proposals to clamp down on immigration.
With Trump’s victory at the polls, policy analysts now believe a more restrictive immigration policy is coming, although they say Trump’s campaign promise to deport every undocumented immigrant in this great country of ours would be practically impossible to achieve.
Trump has already appeared to move away from a pledge to deport more than 11 million illegal immigrants, saying the focus would be initially on removing people with criminal records. The new goal of the administration appears to be the removal of roughly two to three million undocumented immigrants.
Randy Capps, director of research, U.S. programs, for the Washington, D.C.-based Migration Policy Institute, said the administration would be hard pressed to execute a deportation on that scale within the next five years, noting lengthy backlogs in the immigration courts and a record number of asylum seekers. Trump also opposes releasing people who are awaiting immigration hearings. Consequently, thousands more people would have to be held in detention centers.
Under the Obama administration, deportations peaked in fiscal 2012 at 409,849 people, of whom 180,970 were removed from areas of the country that are not part of the U.S./Mexican border region, according to the U.S. Immigration and Customs Enforcement. People apprehended at the border can be administratively removed by the border patrol, while interior deportations are more challenging than border removals and involve the courts and due-process procedures, Capps said.
In fiscal 2015, the total number of deportations fell to 235,413 people, of which 69,478 were deported from the nation's interior.
“Even if they tried to get back to the peak of the Obama administration’s deportations — about 200,000 per year from the U.S. interior and 400,000 in total including the border — they would still have a hard time getting back to that level because they would be further clogging the immigration courts,” Capps said.
“The amount of money that it would take to hire enough immigration judges, build court rooms, build detention facilities for a big deportation effort would be really large," he added. "Congress would have to appropriate a lot more funding for these activities.”
Capps noted that there are other problems with a mass deportation. For one thing, the undocumented immigrant population has tended to be more stable and less prone to move between the borders, establishing roots within the communities. Studies suggest that in Arizona, for example, more than two thirds of the undocumented immigrants have lived in the U.S. for 10 years, and 20 percent have resided in the country for 20 years.
"It is a much more stable, permanently residing population than it used to be," Capps said. Impact on housing
Housing analysts haven’t altered their view that mass deportations and adopting a policy that restricts the flow of new legal immigrants could be harmful to the housing market, especially in states with large numbers of immigrant populations, such as California, Texas and Florida. Fewer immigrants means less demand for single-family homes and apartments. U.S. Census Bureau data in 2010 suggested that 1.2 million immigrants enter the country as permanent residents each year.
Based on that Census figure, the National Association of Home Builders (NAHB) estimated that immigrants would occupy more than two million apartment units, more than 1.2 million homes and purchase 900,000 homes over a 10-year period starting in 2012.
Immigrants also are crucial for the supply of new homes. In 2015, NAHB said immigrants accounted for 28 percent of all the workers in the construction trades and are particularly important in the home-construction industry. Home builders have reported labor shortages since the recovery
Undocumented immigrants form a large share of the overall workforce in the construction industry, representing an estimated 14 percent of all construction workers, according to a 2013 study from the Pew Research Center.
Gary Acosta, chief executive officer and co-founder of the National Association of Hispanic Real Estate Professionals, told Scotsman Guide News that Trump’s immigration policies as outlined so far would be harmful to the market, and to families.
“All these things I realize are very political in nature, but I think sometimes people don’t really understand what the consequences of a very extreme response to immigration could possibly be,” Acosta said. “A very aggressive move to deport or eliminate this population without a real plan on how we are going to replace that labor, without the potential understanding of what the consequences are in terms of breaking up families and so forth, it would have a very disruptive effect on our economy and especially the housing market.”
Acosta said Trump will likely ramp up deportations and build a portion of the wall along the southern border. However, he also expects the new president to continue to soften his stance as the practical obstacles and economic consequences of a massive deportation effort become clear.
“The thing about Trump is that he is a construction guy,” Acosta said. “He is a builder, and he is a hotel guy. So, he knows how important this labor force is. So, I think, at the end of the day, people take different paths to get elected.
“There are certainly people in Trump’s inner circle that feel strongly about immigration, but I think, when push comes to shove, he is going to have to take a more pragmatic approach.”