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007 Impact of Immigration Reform on Real Estate
Prof. Christopher Palmer, (Ph.D. MIT) Berkeley...
... in the second part of a two part podcast about how the Federal Government can impact the real estate sector, discusses how immigration provides demand in various areas of the economy that are, to a greater or lesser extent, dependent on immigration. While reducing immigration may have detrimental impact on various sectors, the counterbalance to this for the real estate investor is that 'distress' can often lead to opportunity.
Opportunity in Distress!
1. New Development Projects
An important line item in costs is the cost of labor. Add to this the current shortage of labor, to restrict immigration could have serious deleterious effect on the construction industry – either by driving up costs, delaying construction timelines, or even postponing construction altogether.
2. Office Sector
Where there is a reduction in the employment of H-1 visas of highly skilled workers from overseas, watch out for a shift to more immigration friendly countries for development of hi-tech industry. This could come at the at the expense of local markets here in the United States, and a consequent reduction in demand for office space in those areas where highly skilled immigrants might otherwise have been employed.
3. Multi-family
Find those areas with high density immigrant tenancy, and you might find areas where demand for multi-family housing in decline.
4. Retail
As free-trade agreements become more restrictive or are abandoned completely, retailers are concerned that demand volumes may slip as imported products, a mainstay of retailing, become more expensive or harder to come by.
5. Industrial
With a strengthening dollar, the ability of our own domestic manufacturing sector to compete effectively overseas may be restricted, and manufacturing and consequent demand for industrial space may decline.
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