How Shifting U.S. Immigration Policies Could Reshape South Florida’s Real Estate Landscape

South Florida has traditionally been a gateway not only for tourists but also for immigrants seeking a new start in the United States. Today, as federal immigration policies tighten, uncertainty has ripple effects in South Florida’s residential and commercial real estate markets.

Takeaways:

• Impact on Residential Real Estate: Tightening immigration policies are creating uncertainty for legal immigrants, affecting home buying and rental decisions.
• Economic Significance: The real estate industry is crucial to Florida’s economy, generating nearly a quarter of the state’s economic activity.
• FHA Mortgages: Changes in FHA mortgage availability impact first-time buyers with temporary residency status.
• Commercial Real Estate: Immigrants play a vital role in Florida’s construction workforce, influencing commercial developments and infrastructure projects.
• Small Businesses: A robust immigrant population supports small businesses, which are essential to the local economy.
• Foreign Investment: Evolving immigration policies may deter foreign real estate investors, impacting the stability of the market.
• Future Outlook: Continued changes in immigration policy will lead to shifts in the real estate market, affecting construction, investment, and property purchases.

What is the impact of the changing immigration policy?

For the South Florida residential real estate market, there is a growing concern that even legal immigrants do not feel necessarily safe from the evolving immigration policy. Some would be home buyers and renters are concerned what happens if their visas are not extended.  According to Bloomberg, the President’s rolling back refugee, asylum and temporary protected status programs for Cuban, Haitian, and Venezuelan immigrants has affected thousands of people in Miami alone even if the policies are being challenged in court.  Governor DeSantis also has signed laws criminalizing unauthorized entry, expanding enforcement funding, and mandating the death penalty for undocumented immigrants convicted of certain crimes.

The South Florida real estate industry has substantial importance, as it generates almost a quarter of Florida’s economic activity, more than any other state, according to the National Association of Realtors.  There are approximately 11,000 real estate agents in South Florida, more than in Los Angeles and New York.  Thus, the evolving immigration policy plays a critical role for our overall economy.

In fact, FHA mortgages, which account for 16% of all single-family homes, is now unavailable to anyone who does not have permanent residency for US citizenship.  Previously, FHA loans, popular with first time buyers because they accept lower credit scores and only a 3.5% down payment, were available to people with temporary status.

Aside from the South Florida residential market, the evolving immigration policy also has an impact on our commercial real estate.  Immigrants account for 38% of Florida’s construction workforce, compared to 24% nationally.  From commercial developments to infrastructure improvement projects, immigrants have played a pivotal role in construction.

In addition, a robust immigrant population supports small businesses—restaurants, retail stores, service providers—that fill strip malls and urban storefronts.  Should the overall South Florida economy be impacted due to the evolving immigration policy, commercial businesses will be forced to re-think commercial leases in order to meet the challenges that may be presented.

Further, the evolving immigration policy has had an effect on foreign real estate investment in South Florida.  Why?  Perspective foreign real estate investors may not view South Florida and the United States, in general, as a stable place to invest currently.

What does this all mean?

We are in the process of change.  The evolving immigration policy  will lead to continued changes in the South Florida real estate market.  Should there be a continued slowdown in the real estate market due to a lack of construction workers, less foreign real estate investment, and reduced purchases of residential homes, more of a demand for lowered interest rates  will result as well as renegotiation of rentals and commercial spaces in order to stimulate the market.

For thirty plus years, Oppenheim Law has served local, national, and international clientele particularly in the areas of real estate and business law. Our sister company, Weston Title & Escrow, Inc., has provided title insurance and title-related services for three decades. Should you have any questions related to a real estate or business matter, feel free to call us at 954-384-6114 or contact our firm directly at contactus@oppenheimlaw.com, and should you need assistance with a commercial or residential real estate closing, please call us at 954-384-6168 or by e-mail at contactus@westontitle.com.