HOW DOES IMMIGRATION IMPACT REAL ESTATE IN 2017?
The phone rang on a Saturday morning, “I don’t know if you remember me, you sold me a house a long time ago, and I need to talk to you urgently.” I remembered him and his wife, we had talked a few years ago about selling, but they decided to stay. Their faces were tense, and his voice was very soft when we met. “I’ve worked at my job at the hotel for 20 years, but I had a traffic ticket. Are they going to deport me? Should I sell my house now?”
Another woman asked in desperation, “My husband was deported, and I don’t make enough money to pay all the bills and take care of the children by myself. What can I do?”
Even Latinos who are here legally walk in the shadow of fear. “My wife has been here for 3 years, she’s afraid that they’ll take everything away.” He is qualified to buy a median priced home, but he won’t buy now. They came with nothing, worked hard to build, and are terrified of losing everything again.
I’ve worked with the Latino community since 1996 after living for 8 years in South America. In Minnesota we have a Latino community of 270,000, about 5% of the population. Minneapolis is a sanctuary city, but that might not offer the protection that Latinos are hoping for. Having a home of their own is the dream of almost every immigrant. While I don’t support illegal immigration I’m keenly aware of how broken the system is. It is an excruciatingly long process. One family paid an attorney $7000 and got zero response for years.
What people who don’t work with immigrants don’t understand, is how much they want a normal and stable life, or how hard they will work to get it. Many work two, even three jobs to get ahead. Most of them belong to a church, and the family is the center of their lives. Latino home ownership rate is at 44% as of 2014 in Minnesota, while Minneapolis/St Paul boost an overall 70% ownership. The quickest way to integrate people into mainstream society is through education and home ownership. If immigrants become home owners they have a stake in the neighborhood, schools, and the city.
The real estate market is in recovery, but part of that market is in the cross hairs of politics. A volatile political climate is unsettling for all of us, immeasurably so for people in the line of fire. On one hand the Federal government denies the right to work to undocumented immigrants, and on the other hand gives them an ITIN (Individual Tax Identification Number) so they can legally file taxes but receive no benefits. The IRS has zero motivation to support immigration reform; intake is greater than pay out. Of the 11,000,000 undocumented immigrants in this country, 7,000,000 are in the workforce.
Most reports that I’ve read on immigrants purchasing a home are just wrong. They state that immigrants only buy after 4-7 years of coming to this country. Not so. They want to know how to qualify within a year. What would be the impact on real estate and the economy as a whole if we were able to reform the system to allow renewable work visas to the 7,000,000 that are already working? By not providing a legal means to purchase a home, the system encourages predators such as false Contract for Deed, Rent to Own at outrageous rates. There is only one bank that I know of that offers a mortgage with an ITIN number. The requirement is 30% down payment, 7.75%+ interest rates.
When I lived in NY during the 1980s, the joke was: “Most popular restaurant in Midtown Manhattan on a Friday at noon. INS shows up, and there is one waiter.”
Isn’t it time we find smarter answers than living under the shadow of a wall? The antiquated and broken system we have is costing the real estate market alone billions of dollars annually. If only 1 million out of the 7 million undocumented works and bought a home in 2017, how would that impact the economy?