Study Explores How Proposed RAISE Act Could Impact Cities and Commercial Real Estate
New York NY— The Trump administration is currently debating several changes to U.S. immigration policy. Cushman & Wakefield released a study on how those shifts could impact commercial real estate and corporate occupancy, specifically.
Known as the RAISE Act, the proposed legislation would impose:
- A reduction in total legal immigration over the coming decade.
- A change in how immigrants are prioritized and granted access to the U.S.
- A hard limit on the number of refugees allowed to enter the country each year (50,000).
“Certain industries such as ours are likely to be disproportionately impacted by these proposed changes,” noted Cushman & Wakefield’s Revathi Greenwood, Americas Head of Research. “Legal, foreign-born workers fill 31 percent of buildings/grounds maintenance jobs and a quarter of construction positions. Limiting their access into the U.S would exacerbate the shortage of workers these sectors already face.”
Further, since 2000 the number of foreign-born workers employed in the U.S. has increased by 42 percent, with management/professional occupations representing the fastest-growing category over that time (+75 percent). An estimated 3.5 million foreign-born residents work in the management and business field – a main driver of office demand.
Gateway Cities and Beyond
Just under half of all U.S. population growth in 2017 will be due to immigration.
“Historically, immigrants have been drawn to gateway cities in the U.S. in addition to a handful of other large coastal cities. Chicago, Houston, Los Angeles, New York, and Philadelphia are the five cities with the largest immigrant populations,” said Cushman & Wakefield Economist Rebecca Rockey, Head of Forecasting, Americas. “Not only do immigrants make up nearly one-third of the populations in these markets, but for some of them, immigration has driven population growth there in the two decades from 1995-2015.”
However, immigrants are beginning to move away from the country’s gateway markets. In 2006, 41 percent of people obtaining permanent resident status resided in one of the six gateway markets. However, in 2015 the percentage dropped to 36 percent. During that same decade, the number of people obtaining permanent resident status in seven other cities clustered on the West Coast, in Texas and in the Midwest increased by over 3 percent.
Commercial Real Estate Correlation
Cushman & Wakefield’s study drew a positive correlation between markets with large immigrant populations and real estate fundamentals. “The five non-gateway markets with the most new immigrants between 1995-2015 – Miami, Houston, Dallas, Atlanta, and Silicon Valley – saw dramatic increases in employment and office inventory over the same period,” explained David C. Smith, Head of Occupier Research, Americas. “During that 20-year period, annual net absorption in these five cities was three times the national average. And, absorption has actually been accelerating over the past five years.”
“Of course, it remains to be seen what, if any, immigration policy changes will finally be implemented, and the devil is in the details,” Greenwood said. “However, if the changes lower the number of work visas available, those reductions will likely create challenges for employers already struggling to find suitable talent.”
Cushman Wakefield’s full “U.S. Immigration Policy: Potential Impact on CRE” report is available at http://www.cushmanwakefield.com/en/research-and-insight/2017/cre-immigration-policy-impact. Sources cited include the U.S. Census Bureau, Department of Homeland Security, Pew Research Center, Bureau of Labor Statistics, United Nations and Office of Foreign Labor Certification.
About Cushman & Wakefield
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