Last holiday season, Legend Homes in Houston got a frightening look at what its business would be like without immigrant labor.
“Between Thanksgiving and New Year's we practically had to shut down,” says Scott Villarreal, the company's vice president of sales and marketing. “Here we were having to slam these homes [to make numbers for the company's fiscal year] and our workers went home for vacation. And it's not a two week thing or a week thing, it's a month thing. If we had to feel that the whole year …” he trails off, clearly not wanting to contemplate the scenario.
The prospective of losing the immigrant share of Legend's home buying market is equally daunting. “It was about 60 percent of our business,” Villarreal says. “Now it's about 45 [percent] or 50 percent,” because Legend is closing out a couple of its primarily Hispanic-buyer neighborhoods.
In Congress, the contentious debate over what to do about the seemingly continuous influx of illegal immigrants into the United States spurred BIG BUILDER to ask the question: “Just how dependent is the home-building industry on both foreign-born workers and home buyers?” We looked at both ways builders could be affected by a slowdown in immigration: The short-term problem with the labor and the short- and longer-term problems it would create for home demand.
The short answer to our question is “very dependent.”
Legend, with its presence in immigrant-heavy Texas is obviously an extreme example. But it might be not be as far off normal as one might think.
Immigrants have begun to spread well beyond the expected border states, bolstering the population growth numbers in some places that might seem like unlikely havens for the foreign-born. And there were some states, where native-born people have been moving out in droves, leaving immigrants to provide most of the fodder for population growth.
In all, there are 11 states where international immigrants account for two-thirds or more of the population change. None are border states. In Iowa, for instance, nearly 74 percent of the increase of population between 2000 and 2005 was made up of international migrants, according to the U.S. Census Bureau. And in Massachusetts, which lost a whopping 236,415 native-born residents to other states, 162,674 foreign-born people moved in, accounting for more than 329 percent of the state's population growth.
“Over the last five years, the price of housing in Massachusetts has gone through the roof, which indicates that there is a lot of demand,” says Peter Francese, founder of American Demographics magazine and a current demographics trends analyst for Ogilvy and Mather advertising agency. “Where is this demand coming from if, in fact, more than 236,000 people left the state?” The bottom line is that immigrants are absolutely a critical element in the housing industry.
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