If you were to ask someone where to find the best Vietnamese food in Washington, D.C., you may be told to head to Eden Center, a Vietnamese shopping center in the northern Virginia suburb of Falls Church. Looking for great Peruvian rotisserie chicken? Don’t head downtown, but rather to the Wheaton community in the Maryland suburbs. Cuisine from around the world can be found in the D.C. suburbs, which are also home to growing and thriving immigrant populations.
Over the past two decades, immigrants have fueled the growth of suburban communities all across the country. And in the years to come, one of the greatest sources of housing demand in the country—and particularly in the suburbs—will be from people who come to the United States from other countries.
New immigrants could account for one-third of all household growth over the next decade, adding approximately 2.9 million new homeowner households and 1.1 million new renter households between 2015 and 2025, based on recent forecasts from the Research Institute for Housing America of the Mortgage Bankers Association. For the real estate industry, planners, and public officials, this growth poses several questions: Where will immigrant households settle? What types of neighborhoods and housing will they choose? And how will they change the face of the nation’s suburbs?
The potential impact of the foreign-born population on local housing markets—and the extent to which these immigrants will be homeowners or renters, suburbanites or city dwellers—depend on the socioeconomic characteristics of the people themselves, as well as on the regions in which they settle. In some cases, the growing immigrant population may fuel continued population growth in central cities. But in many instances, immigrants will be a key source of demand for single-family housing in the suburbs. The dream of homeownership—and particularly suburban homeownership—remains strong among newcomers to the United States.
The ULI Terwilliger Center for Housing is examining the housing characteristics and residential location choices of the foreign-born population to better understand the impact that immigrants could have on local housing markets across the country, particularly in the suburbs.
Analyzing data from five metropolitan areas, this research looks at the housing tenure (owner/renter), type of housing unit (single-family/multifamily), and locations (suburban/urban) of immigrant households. In addition to public data from the U.S. Census Bureau on the foreign-born population, this analysis makes use of a new suburban typology developed by RCLCO and ULI to get a better picture of the varied American neighborhoods that immigrants now call home, which may provide some insight into the likely choices of future immigrants.
The final research report, Immigrants and Housing Demand, will be released in spring 2017 and will be available for download from the ULI Terwilliger Center’s website.
Some interesting—and perhaps surprising—early findings include the following:
- The vast majority of immigrants live in the suburbs. In the five metro areas examined (San Francisco; Houston; Minneapolis; Charlotte, North Carolina; and Buffalo, New York), foreign-born individuals—just like native-born residents—are more likely to live in the suburbs than in the city. While both groups are more likely to live in suburban communities, suburban living is somewhat more common among native-born households.
- The likelihood that an immigrant lives in the suburbs depends a lot on the type of metro area in which he or she lives. The suburban preference exists, in part, because regions that are more suburban in nature, such as Houston and Charlotte, for example, have relatively large foreign-born populations in the suburbs. Many of these suburban metro areas have emerged as magnets for immigrants since the turn of the 21st century, and will likely continue to attract new immigrants in the years to come.
- Most immigrants live in single-family homes. Because the majority live in the suburbs, where single-family housing is the predominant form of residence, foreign-born households also are more likely to live in single-family homes than in apartments or condominiums.
- A relationship appears to exist between the likelihood of living in a multifamily housing unit and an immigrant’s region of origin. For example, across the five metro areas studied, African immigrants are more likely than other immigrant groups to live in multifamily housing, whereas immigrants from Asia generally are more likely to live in single-family housing.
- Homeownership rates are higher for immigrants who have been in the United States longer. Across the five metro areas studied, homeownership rates are lower for foreign-born households than they are for native-born households. However, homeownership rates among immigrants increase the longer they have been in the country; and in some places, homeownership rates for immigrants are similar to those for native-born households. For example, in Houston, 60 percent of immigrants who have been in the United States since before 2006 are homeowners, which is the same share as for the overall population in that metro area.
Impact on Suburban Housing Markets
According to data from the U.S. Census Bureau, homeownership rates have fallen from a high of 69 percent in 2004 to 63.5 percent in the third quarter of 2016, and many researchers and others have suggested that there is a shifting of preferences away from cul-de-sac suburbs. However, for many immigrants, the American dream still involves owning a single-family home on their own piece of property in the suburbs. So, will immigrants fuel the next great wave of suburbanization?
The regions to which immigrants move will be the key to the housing choices they make and to whether those choices will be in the suburbs. Fast-growing regions in the Southeast and Southwest that are more suburban in nature will attract immigrants who will have more options to buy single-family homes in suburban communities. The places that immigrants come from also will influence the demand for housing in the suburbs. A shift to a greater share of immigrants from Asian countries, for instance, could lead to more demand for single-family suburban housing.
Overall, understanding the housing preferences and the growth of the immigrant population in the United States will be important for predicting the trajectories of suburbs—and cities—in regions around the country.
Lisa A. Sturtevant is a senior visiting fellow with the ULI Terwilliger Center for Housing.