The Trump administration’s immigration crackdown is reshaping demand conditions in parts of the Sun Belt, where population growth has long supported apartment absorption, retail spending, and job creation.
Bloomberg reported that the crackdown is prompting unauthorized immigrants to leave the U.S., either voluntarily or through deportation. This trend is visible in neighborhoods like Gulfton in Houston, which has historically been a first stop for immigrants due to its affordable housing and accessibility.
For commercial real estate investors, the concern extends beyond losing individual tenants. The broader issue is the weakening of a key demand driver. Fewer arrivals and more departures mean fewer households seeking apartments, a smaller labor pool for local employers, and reduced spending at neighborhood retailers.
Population Growth Slows Across the Sun Belt
Sun Belt Growth Slows Amid Immigration Crackdown
Harris County, encompassing much of the Houston metro area, grew by less than 1% in the year ending July 1, 2025. This figure reflects only the early months of Trump’s second term and may not capture the full impact of subsequent departures and deportations.
Net immigration into Harris County dropped by 80%, a significant shift for a region that added 3 million residents since 2000. Foreign-born residents make up roughly one-quarter of the population, which is nearing 8 million.
Across the Sun Belt, population growth averaged 1.44% from 2000 through 2024. In 2025, it slowed to 0.94%. Twelve of the region’s 14 states saw growth below 1%.
This demographic slowdown directly affects multifamily owners and investors, especially in markets where new supply already competes for a limited renter pool.
Apartment Demand Faces Pressure
Immigration has historically added households and workers to Sun Belt markets. When this flow slows, apartment owners may face weaker demand, even if the overall economy remains stable. The risk is particularly acute in lower-cost areas that cater to immigrant households and in markets with high new supply.
Apartment Demand Weakens in Immigrant-Heavy Markets
Denver illustrates this. In March 2026, Marcus & Millichap projected employment growth of just 0.5%, citing labor and immigration headwinds as pressures on renter demand. They expected vacancy rates to rise another 10 basis points in 2026, reaching 6%.
The issue spans various markets and property types. A national decline in international migration can impact household formation across price points, though the near-term effects are most noticeable in communities with large immigrant populations and in markets reliant on population inflows for rent growth.
Census data shows net international migration added about 1.3 million U.S. residents from July 2024 to June 2025, less than half the 2.7 million added the previous year.
This slowdown has created gaps in consumer spending, economic output, and employment, with housing at the center of these adjustments.
Retail Sales Suffer as Immigrant Communities Retreat
The real estate implications extend beyond apartments. Reduced immigration and heightened fear among residents can also weaken neighborhood retail sales, particularly at businesses that depend on immigrant workers and consumers. “A lot of people are scared of going out, even to work,” Jose de Jesus Guzman, manager of the Gulfton restaurant Taqueria Mexico, told Bloomberg. Even households that remain in place may pull back on discretionary spending if they fear workplace raids, detention, or deportation.
That dynamic matters for owners of retail centers in immigrant-heavy neighborhoods. Lower foot traffic and reduced restaurant, grocery, and service spending can pressure tenant sales and, eventually, leasing demand and asset values.
Houston also saw its largest decline in potential workers outside the pandemic during the first half of the year, according to Bureau of Labor Statistics data cited by Bloomberg. A smaller available workforce can constrain employers, limit business expansion, and reduce the economic activity that supports both retail and industrial real estate.
The investment implications are already surfacing in the grocery sector. Apollo’s effort to sell Heritage Grocers Group has become a test of how much uncertainty investors are willing to accept around grocery-anchored assets that serve Hispanic communities.
CRE Investors Face Uncertainty Over Labor Market Shifts
The administration maintains that its approach will strengthen the domestic labor market. “There is no shortage of American minds and hands to grow our labor force,” White House spokeswoman said in an emailed statement to Bloomberg. She said Trump’s agenda is intended to create jobs for American workers while enforcing immigration laws. For CRE investors, however, the relevant question is not only whether jobs ultimately shift to other workers.
It is how quickly those workers can replace the labor force, spending power, and household formation lost through a sharp reduction in immigration. The risk is increasingly difficult to treat as a distant macroeconomic concern. It is becoming a local underwriting issue for apartment owners, retail investors, and lenders in markets with large immigrant populations, high exposure to service-sector employment, or a reliance on continued in-migration.
The larger concern for commercial real estate is that immigration policy may now influence property performance through several channels at once: apartment demand, labor availability, consumer spending, and population growth. Investors with exposure to Sun Belt multifamily, neighborhood retail, and grocery-anchored properties may need to pay closer attention to those connections as the effects move from individual neighborhoods into market-level fundamentals.