Immigration enforcement activity across several U.S. markets is beginning to weigh on multifamily operators, particularly those managing older, workforce housing assets.
In markets such as Texas, Florida, Arizona and parts of Southern California, operators report rising vacancies and softer leasing tied to stepped-up actions by U.S. Immigration and Customs Enforcement. While some regions have experienced minimal disruption, others are seeing more immediate occupancy challenges — especially in Class C communities.
An armored vehicle stationed outside an apartment complex during a January enforcement action in St. Paul, Minnesota, captured national attention, highlighting the visibility of recent crackdowns.
Apartment demand is closely linked to household formation, and new census data suggests that growth is slowing.
From mid-2024 to mid-2025, U.S. population growth rose by 1.8 million people — roughly half the increase recorded during the prior year, according to U.S. Census Bureau data. The foreign-born population grew by 1.3 million during that span, marking a 54% decline from the previous period.
“Information from a variety of sources shows either notably slowed growth in the foreign-born population or actual backtracking in the immigrant population,” LeaseLock Chief Economist Greg Willett told Multifamily Dive in emailed comments.
While national housing data has not yet reflected a dramatic slowdown in overall rental demand, localized impacts are becoming clearer.
“Apartment vacancies began rising rapidly during the last half of 2025 in select submarkets across Texas, Florida, Arizona and Southern California,” Willett said.
A survey conducted by John Burns Research & Consulting underscores that regional strain. In Florida, 67% of apartment operators reported somewhat negative impacts on leasing and occupancy tied to immigration enforcement. In Texas, 26% reported somewhat negative effects, while 21% described impacts as significant.
Jay Lybik, senior director of market research at Continental Properties, attributes some of the Sun Belt softness to immigration shifts combined with affordability stress.
“Everyone keeps talking about how oversupply at the top of the market is helping lower rents for Class C in Phoenix, Austin, and San Antonio,” Lybik said. “I don’t believe it. I say, the Class C rents are going down in those markets because many households in that price point can’t afford the rent or in the case of immigrants some are just straight out leaving the United States.”
Initially, analysts expected smaller multifamily properties and scattered-site rentals to bear the brunt of immigration enforcement impacts. Instead, larger, older Class C assets are also reporting occupancy declines following raids.
“The pattern is especially pronounced in lower-tier Class C properties, a segment of the product mix that already has been facing headwinds from consumer price inflation that’s cutting into the spending power of a cash-strapped group of renters,” Willett said.
Over the past several years, Class C operators have already contended with higher interest rates, rising insurance premiums, elevated property taxes and flattening rents. Now, weakening demand in certain immigrant-heavy submarkets is adding further strain.
“Anecdotally, the conversations I’m having are, ‘We’re trying to get a class C deal sold. Those loans are coming due that were originated in 2021. We had faced some supply-related issues on the operation side, and now we’re hit with this demand issue from the immigration side,’” Chris Nebenzahl, vice president of rental research at John Burns, told Multifamily Dive. “That’s really putting some folks in a bit of a lurch from an occupancy perspective.”
Occupancy erosion in already stressed assets could create financing challenges.
“Where you’ve got occupancy at 85%, economic occupancy at 78% and the loan is coming due, I think the lenders are going to say, ‘Yeah, the jig is up. Either sell and get what you can or we’ll take the keys back,’” Nebenzahl said.
He added that occupancy losses tied to enforcement could be the “straw that breaks the camel’s back.”
In some cases, the impact of enforcement actions is abrupt.
“If there’s a rumor of the presence of ICE in the area, you could see 10% of the occupancy leave overnight or in a very short period,” Nebenzahl told Multifamily Dive. “At other properties, they’re saying, ‘We’ve got no issue.’”
Anthony Luna, CEO of Coastline Equity, observed sharp shifts in two Long Beach, California, buildings located in historically Latino neighborhoods.
“When the raids started, we saw move-outs spike to levels we’d never seen before, and it happened in the middle of summer, which was really unusual,” Luna told Multifamily Dive last year.
After enforcement activity intensified, he said rents declined and move-outs accelerated across certain Long Beach communities.
“There’s just this fear across the community, both among immigrants and among residents,” Luna said. “There’s a lot of ICE activity. It happens almost daily, where they’re raiding Home Depots, car washes, etc.”
With anxiety rising in affected communities, operators are implementing protocols to manage potential enforcement interactions.
Luna gathered staff for legal training sessions focused on distinguishing between judicial warrants signed by a judge and administrative warrants issued by ICE.
“We showed them what a judicial warrant is and what an ICE warrant — one of their self-produced warrants — is,” Luna said. “We’ve done some training. We’ve given them talking points. We’ve explained how they should lock down the building if there are ICE activities in and around the community.”
The National Apartment Association advises owners that they may either consent to ICE searches or refuse, though denial could result in forced entry. In such cases, owners are advised not to interfere with law enforcement and to document events while contacting counsel.
Luna also emphasized that staff should not release tenant or rental application information without proper legal documentation.
“They need to escalate to the appropriate team member if those kinds of calls or demands come in,” Luna said.
Protecting application data is especially important, he added.
“You have no idea who you’re looking for if you’re looking at rental applications,” Luna said. “You’re just trying to get as much data as possible.”
The evolving enforcement landscape adds another layer of uncertainty to an apartment sector already navigating supply imbalances, refinancing risks and affordability pressures.
While not all markets are experiencing measurable fallout, localized occupancy disruptions could have outsized impacts on workforce housing portfolios — particularly those with near-term loan maturities.
If enforcement activity continues in high-immigrant submarkets, analysts say lenders and owners may need to reassess underwriting assumptions, rent growth projections and asset valuations for vulnerable Class C properties.
Originally reported by Leslie Shaver, Senior Reporter in Construction Dive.
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