Most migrants to Europe are clustering in cities, a new ULI study finds, compounding the challenge of rising rents with encouraging integration of new residents and preserving a healthy socioeconomic environment.

The changes are difficult, but “migration is a positive,” Executive Director Claudia Gotz said speaking at a ULI Germany event in Frankfurt. “Europe grows, the population gets younger, and the GDP increases.”

A new ULI report, Mass Migration and Real Estate in European Cities, was released at the ULI Germany Urban Leader Summit. The Institute for Research into Superdiversity at the University of Birmingham led the research, with ULI councils in the United Kingdom, Germany, Austria, Turkey, the Netherlands, Sweden, Italy, and Greece contributing.

Germany has received the most new residents in the recent boom: About 2.1 million people emigrated there in 2015, compared with 1.5 million in 2014, according to the federal statistics office. Across Europe, once migrants arrive in their destination country, they tend to move to and stay in cities—for example, 95 percent of immigrants in the United Kingdom live in cities.

Calling it a “migrant crisis” is perhaps a misnomer. Problems concerning available urban living space predated the current migration patterns, according to the study authors. Migration has not notably changed European housing markets, but rather has added to the pressures on the already overstretched residential markets.

619_reccomendBut there is the perception of problems among host cities that the influx of migrants is leading to problems. The majority of study respondents reported that their communities are experiencing some or substantial deterioration in relation to:

  • Pressure on infrastructure: 71 percent;
  • Social inequality: 69 percent;
  • Community relations: 61 percent;
  • Affordability of housing: 60 percent; and
  • Availability of housing: 56 percent.

But there are many upsides to migration that are not getting equal play in local and national media, the study concluded. Low birth rates are a problem in many European countries, and migrants could help improve old-to-young dependency rates. While Germany’s ratio almost doubled in the past 30 years, the recent influx of migrants skews younger. The median age of the total E.U. population was 42 in 2013; the median age of migrants was 28. And although many migrants coming to the European Union are young and single, cities must prepare for the eventual families these migrants will create and ensure that school systems are prepared.

619_agingSome countries and cities’ planners want to relieve the pressure on cities by distributing migrants more evenly across a region. But migrants want to be near similar people and have access to the opportunities in the cities. Comprehensive public transportation can help disperse migrants to suburban areas and ease the pressure on housing markets.

Despite increased immigration and rural-to-urban migration, many survey members reported property developments focusing on the top end of the market, seen as a barrier to creating affordable housing. Increased migration across Europe has led to some relaxing of some planning regulations and increased responsiveness in planning processes and openness to new approaches, the study found, such as using containers as emergency housing; repurposing land and buildings for medium-term provision; greater reuse of brownfield sites and disused waterfronts; and creating mixed-use settlements with social engagement. Across Europe, there is a stronger focus on mixed-use and affordable housing to meet current as well as future demands of users and tenants.

The significant immigration levels are creating a sense of urgency that is leading the real estate industry to evolve more quickly than it might have otherwise. Real estate is developing as a service, adding new knowledge and skills.

One of the study’s main conclusions is that as European cities grow, there must be more collaboration among migrants, nonmigrants, real estate practitioners, city planners, and migration/integration experts.

At present, however, there is very little overlap between experts in migration and experts in real estate. “We need a new generation of experts to help design these cities and adapt [them] for growth,” Gotz said.

“Cities are drivers and mirrors at the same time, with an enormous potential for sustainable change.”