Mapping The Fiscal Burden Of Illegal Immigration On Each State

Via HowMuch.net

There’s a lot of confusion and misunderstanding out there around the economic impact of illegal immigration in the United States. We decided to bring some clarity around the issue by mapping new numbers on the estimated costs of illegal immigration on a state-by-state basis.

Our viz takes data from the Federation for American Immigration Reform (FAIR) about how much illegal immigration costs in each state. FAIR takes into account a variety of different expenditures, like healthcare, education and refundable tax credits. We mapped these numbers across the United States according to a color-coded scale. Purple and dark red states have comparatively high expenditures, but the pink and blue states spend relatively less money because of illegal immigrants.

There are two interesting trends you can see from looking at the data in this way.

• First, states that spend the most on illegal immigration tend to be located close to Mexico. Looking at out map, the two states with the highest expenditures are California ($23B) and Texas ($11B), both sharing long borders with Mexico. In fact, there’s a cluster of dark red states stretching along the Southwest. States closest to the phenomenon pay the most as a result.


• Second, states with higher population levels tend to spend more than their less populated counterparts. You can see a group of high-expenditure states clustered around the Northeast, not to mention Illinois and Florida. According to the U.S. Census Bureau, California and Texas are also the two most populous states in the country. High population levels and proximity to Mexico act like a double-whammy for illegal immigration expenses.

Now take a look at the places with relatively low levels of expenditures for illegal immigration, the light blue states. They are all located far away from the U.S.-Mexico border with relatively small population levels. West Virginia is perhaps an exceptional state, seeing that it is surrounded by red and dark red. We can speculate that this is likely due to the fact that West Virginia has a struggling economy which actually contracted last year.

We should add that the source for the numbers in our viz come from a partisan outfit. The Federation for American Immigration Reform (FAIR) advocates for legislation designed to decrease immigration, and you can poke holes in their methodology. For example, suppose immigrants really are paying less in income taxes because of their illegal status. Forbes estimates that granting them amnesty would actually boost their state tax contributions by $2.1 billion. That’s the exact opposite conclusion than what FAIR would like you to believe.

That being said, here’s a list breaking down the States with the highest expenditures for illegal immigration according to FAIR.

1. California - $23,038,125,353

2. Texas - $10,994,614,550

3. New York - $7,489,141,357

4. Florida - $6,290,429,108

5. New Jersey - $4,466,838,574

6. Illinois - $3,220,767,517

7. Georgia - $2,487,719,503

8. North Carolina - $2,437,965,113

9. Maryland - $2,378,996,947

10.   Arizona - $2,314,131,964

Remember, these numbers only look at the net expenditures that states spend on illegal immigration, and they say nothing about other contributions to the economy. Any way you cut it though, whenever states are spending billions of dollars on something, it’s worth taking a hard look at where the money is going and why.

Could Trump's Immigration Ban Cause Another Housing Crash?

How important are immigrants to the U.S. housing market?  At least according to University of Washington economist Jacob Vigdor they could own roughly 12.5% of the housing stock in the U.S. worth about $3.7 trillion in aggregate. 

Here"s the math...there are roughly 320 million people in the U.S. and 125 million houses, or about 2.5 people per household.  Since there are 40 million immigrants living in the U.S., that implies they could own around 16 million homes.  Using an average home price of $225,000 would imply an aggregate household value of ~$3.7 trillion for immigrant families alone.  Per Bloomberg:

Fueling housing demand, immigrants replace baby boomers retiring from the labor force, according to University of Washington
economist Jacob Vigdor.

By his reckoning, the country’s 40 million immigrants add $3.7 trillion to total housing wealth. In Houston’s home county, the newcomers boosted the value of the typical home by $25,000 during the decade ended in 2010. Between 2015 and 2065, according to a Pew Research projection, future immigrants and their descendants will account for 88 percent of the U.S. population increase, or 103 million people.

The question, of course, is whether or not Trump"s immigration crack down, on both illegal immigrants and H1-B visa holders, will reduce demand from immigrant families to such an extent that it actually drives down home prices? 

In San Francisco, an Indian software engineer on a work permit canceled plans to bid on a $900,000 home. In Washington, a Brazilian nonprofit executive passed on a fixer-upper near her office. And, in Mesa, Arizona, a 24-year-old son of undocumented Mexican immigrants won the trust of a bank -- a green light for a mortgage -- but now fears deportation.

President Donald Trump’s immigration policies threaten to crack a foundation of the American economy: the residential real estate market. Legal and otherwise, immigrants, long a pillar of growth in homebuying, are no longer feeling the warm welcome and optimism necessary for their biggest purchase.

“I feel like with one stroke of Trump’s signature everything can be taken away, even all my hard work,” said Juan Rodriguez, the 24-year-old whose parents moved from Mexico when he was 7. He now works full time while earning his college degree.

Certainly real estate brokers are full of circumstantial evidence to suggest a doomsday scenario is inevitable but they"re somewhat of conflicted party.

The 32-year-old Silicon Valley software engineer from India gave up on buying because Trump had so rattled him and his wife. He moved to the U.S. seven years ago and decided to become a homeowner after marrying a biomedical engineer from his home country a few months ago.

The newlyweds have H1-B visas, a program that technology and other companies rely on to hire 85,000 people each year.

“We were about to make some offers,” he said. “But we don’t know what news will come out and how that will affect our jobs.”

Their real estate agent, Nomita Shahani, said a colleague in her office just had a customer with an H-1B visa pull out of a purchase contract in Fremont, California, because of similar concerns.

“All morning clients have been calling me,” Shahani said. “We don’t know which way it will go, but if Trump keeps making it hard to hire people from oversees, the housing market will take a hit.”

The immigrant housing market is often underappreciated, in part, because undocumented workers and the companies that cater to them sometimes like to fly below the radar.  That said, according to the Migration Policy Institute, roughly one-third of all illegal immigrants in the U.S. own a home either directly or through friends and family.  

A third of the 11 million unauthorized immigrants in the U.S. live in a home that they or a family member or friend own, according to an analysis by the Migration Policy Institute, a Washington-based think tank.

Some smaller firms will make loans to the undocumented, with higher interest rates. A few larger lenders such as Winston-Salem, North Carolina-based BB&T Corp. market to dreamers, who can qualify for conventional Fannie Mae, Freddie Mac and Federal Housing Administration mortgages.

Of course, as we"ve pointed out before, per data from the Pew Research Center, approximately 60% of all illegal immigrants live in just 20 metropolitan areas across the country with the 2007 subprime havens in Florida, Texas, California, Arizona and Las Vegas having more than their "fair share."

Meanwhile, the top 10 metropolitan areas alone account for nearly 50% of illegal immigrants and just three states, California, Texas and New York, make up roughly 37% of the total.

"Fake news" crafted by the mainstream media to sensationalize the economic impacts of Trump"s immigration policies or housing crash 2.0?