The New Face of Immigration Is Changing the Housing Market
The twin shortages plaguing the U.S. in 2016 -- a shortage of cheap service labor, and a shortage of affordable housing -- are products of the same little-noticed trend: For decades, the education level of immigrants has been rising.
A recent report from the National Academies of Sciences, Engineering, and Medicine entitled "The Economic and Fiscal Consequences of Immigration" shows that since 1970, average educational attainment of Mexican immigrants has increased to 9.5 years from 5.7 years. For Latin American immigrants outside of Mexico, average educational attainment has increased to 11.3 years from 9.5 years. For Chinese immigrants, it's increased to 13.9 years from 10.5 years.
This "up-skilling" of the immigrant labor force is contributing to the country's labor and housing woes. Historically, immigrants provided much of the muscle for building the nation's infrastructure. In the 1820s and 1830s, canals were built by Irish and German immigrants. Chinese immigrants were instrumental in building the First Transcontinental Railroad in the 1860s. The late 20th century Sun Belt boom, including the 1996 Summer Olympics in Atlanta, could not have been built without Mexican construction workers. (The games even relied on illegal immigrants to meet deadlines.)
Today's immigrants, many arriving with college degrees, are headed for other careers. These individuals aren't going to contribute to the supply of housing.
But they'll contribute to the demand.
Under the "old normal" of less-educated immigrants, workers may have huddled in immigrant neighborhoods in inner cities like the old Chinatowns, or agricultural communities like the Central Valley in California. But well-educated immigrants tend to desire, and can afford, the same kinds of neighborhoods that well-educated native-born Americans do: suburban neighborhoods with good schools. These neighborhoods often are the kinds of stable, desirable communities that have strict limits on density and new construction, restraining the housing supply, so an influx of educated immigrants has the effect of raising prices and pricing out some native-born residents (and less educated immigrants).
This is occurring not just in traditional gateway communities like the San Francisco Bay Area or Southern California, but also where I live, in metro Atlanta. From 2011 to 2016, Asian student enrollment in Georgia public schools increased by 11,400 students. Fifty-three percent of that growth occurred in just two of Georgia's 159 counties: Fulton and Forsyth, both in the Atlanta area. This rapid demographic shift leads to speculation about white flight from increasingly Asian communities, as has happened in California.
High-skilled immigrants are the least politically contentious, as nearly everyone agrees that they lead to faster economic growth and increased innovation and entrepreneurship and are net contributors to government budgets. But as this political season reminds us, not everyone feels like the societal benefits of immigration outweigh the personal costs. And the big losers of high-skilled immigration might be members of today's (largely white) upper middle class, who will face more competition for good housing, good schools and good jobs.
Not that there's anything wrong with that. But we should be prepared for the shift, as long as new American immigrants are more likely to be buying suburban houses than building them.
Education itself has become one of the main attractions of the U.S. In the 2014-15 academic year, international student growth at U.S. colleges and institutions grew at its fastest rate since 1979, with nearly a million students, or one in 20, hailing from abroad. Rather than less-educated migrant farm workers from Latin America, the U.S. is increasingly importing well-educated students from China and India.
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