Economic migrants, refugees, asylum seekers and real estate …

November 5, 2015 admin

I am writing a lead story on real estate in 2016 and beyond for the December 2015 issue of Institutional Real Estate Europe. In so doing, I found myself writing en passant about the migrant crisis, as you do. I am not passing judgment, simple stating facts and giving a view. This is a polarizing topic, and people have differing opinions.

Europe cannot control its external borders, and it seemingly can do little about the flood of refugees and economic migrants from the Middle East, Africa and Asia that is now pouring illegally across those borders and then any which way through southeastern and central Europe across the newly manned and partially fenced internal borders of the European Union toward their declared destination, Germany.

Many of those migrants, of course, are Syrians who are fleeing the civil war in their country and accessing the E.U.’s external border along the Greek coast from Turkey, just a short but dangerous distance away across the Aegean Sea. There is no suggestion that Turkey’s attitude in this migratory exodus has anything to do with the E.U.’s repeated refusals over the years to progress Turkey’s application to join the European Union. None at all.

At the end of the Second World War, the movement of people westward in Europe was of displaced Europeans, mainly Christians, fleeing deprivation and Stalin’s Red Army and was largely accepted by indigenous populations as a consequence of war, human upheaval and the need for economic renewal, and the new political reality. And after years of family and fabric destruction there was rebuilding work aplenty.

This time, the movement westward is of non-Europeans, mainly Muslims, is not largely accepted, work is harder to come by, and indigenous resentment is higher.

  • What’s the definition of a refugee? Someone who flees their country in search of safety in a neighboring country.
  • What’s the definition of an economic migrant? A refugee who chooses to leave the safety of the neighboring country in search of a better life in another country.

Europe has a rich tradition of helping vulnerable people in a time of need, but this latest situation may be beyond the continent’s capabilities — simply too many, too quickly. This is a political issue and is tragic for those concerned, but it is also the socio-economic issue of the day and will, now but also years down the line, have ramifications for real estate across Europe, both markets and properties. How can it not?

There are, of course, many positive aspects to immigration, if controlled and handled properly. And the boost to a country’s demographic and economic development and labor force spending power from young, dynamic new arrivals is undeniable. The four Nordic capital cities have benefited substantially in recent years from population growth brought about by urbanization and immigration.

As usual with contentious issues, there are multiple facets to consider, no right answers and many wrong answers. For many people, principal among the considerations must be the protection of the weak and defenseless. Against that must be placed the European Union’s ability to manage its affairs properly and to guard against existential threats to its borders, long-term security and — bluntly — future as a political force.

We are talking here of illegal immigrant volumes in numbers that real estate investors will be used to — millions. They are literally walking through borders, pushing obstacles aside and expressing an undue sense of entitlement. Current estimates are that 1 million refugees and would-be migrants will arrive in Germany this year.

Back in October 2011, in an article for the November 2011 edition of The Institutional Real Estate Letter – Europe, as it was then called, I wrote that “the short-term effect [of the Arab Spring] is to encourage displaced people to flee to safe-haven countries.” I also wrote “and for many that initially means southern Europe”; I got the southern Europe bit wrong, but I did say “initially.” Six months earlier, I had written that “this latest ‘Arab Spring’ flexing in the region of the people’s political muscle has been a long time coming and has to be seen as welcome and positive for the long term if aspirations are met, but it is pervasive. When will it end? How will it end? Where will it end? Metaphorically and geographically.”

The Arab Spring has escalated into armed conflict, insurgency and civil war in countries like Libya and Syria, and we now know that it is ending in the refugee camps in Turkey, Lebanon and Jordan, and — for a sizable minority — in prosperous northern Europe and in less prosperous places inbetween. We in Europe may wonder why but — more words from October 2011, nearly 50 months ago — “those of us who live in Europe may not always regard it as a paradise but the view is different for those who can only see squalor, deprivation and conflict at home.”

This vacuum has been four years in the making. We could see this coming; why couldn’t Europe’s leaders?

Political unity at an E.U. level has always been a tricky concept — obtained usually by talking through the night at summits in Brussels and wearing the protagonists down — and the introduction of majority voting, such as used recently in the European Council to introduce refugee quotas for E.U. member states, makes political unity even harder to achieve. The idealistic E.U. has pretensions of solidarity at a European level but the brutal truth is that, when faced with stark choices, nation states will act in their own selfish interests. How could it be anything but in a Europe that is still riven with physical borders and social, cultural, economic and political differences and divisions between and even within countries?

It is not the real estate industry’s fault that its position in society puts it at the heart of the conundrum about what to do with the millions of current and future refugees and economic migrants who have been drawn to Europe: how to receive them, in the widest sense; where to put them; where to house them; how to feed them; where to school their children and their children’s children; how to social-service them; how to enable them to become economically active; how to ensure that they become viable members of society and not a festering underclass; how to integrate them; how to prevent domestic populations from feeling that their current way of life and culture is under threat from the new arrivals; how to deal with the social, economic and political tensions that will arise — and they will. Indeed, they are doing already, both at local and national levels.

There is much more like this in the lead story, both facts and insight, both about the migrant crisis and real estate. Are you intrigued to learn more? The December 2015 issue of Institutional Real Estate Europe publishes around Nov. 20.

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RichardFlemingRichard Fleming is editor of Institutional Real Estate Europe.

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