By Cory Gaines | Commentary, Colorado Accountability Project
Does an influx of immigrants (illegal or otherwise) drive up house prices?
The answer to that question, as with many things in life, is complicated. A guarded, and cautious “yes” with plenty of caveats would be how I’d characterize it; if you introduce millions of people into a place, how can their presence not up demand? This is all the more so for a commodity like housing which has much higher connections to regulation and government than, say, cellphones.
Simply looking at the spike in immigration post-COVID ought to convince any reasonable person that demand for housing would increase. See screenshot 1 (from the first link below) for a time series graph.
In order to look into this question myself, I did what I usually do. I sought out resources from all over. To help you come to your own conclusions, I will share some of the better ones that I myself looked at.
The first link has already been mentioned. It’s a report on housing affordability and immigration prepared by the group FAIR, a group that, per its “About” page linked second below, is fighting “… for immigration policy that is in America’s best interest.”
Following that, and on the opposite side of the political spectrum, you have an NPR interview linked third below. NPR characterized their interview thusly (quoting):
“NPR’s A Martinez speaks with associate professor Chloe East of the University of Colorado Denver about the impact of undocumented immigrants on the U.S. housing market.”
Lastly, linked fourth below, I have an essay by the group Forum entitled “Explainer: Immigrants and Housing”. I put a link to Forum’s “About” page fifth below. Looking at their locations, ideology, etc. I think I agree with others in calling them Center-Left.
Aside from outsized claims by advocates on both sides of the issue, one thing that seems to run common to the resources I found was that housing affordability is due to multiple factors, an increase in demand due to an increase in people coming into the US being one. I also saw a fair bit of overlap across these sources in the idea that by and large immigrants (especially those here on temporary status or here illegally) rent rather than buy.
The differences seem to mainly show up when you start trying to quantify the effect of immigration or to try and rank it in a list of other factors.
FAIR doesn’t put a price to things, but they do take a stab at housing units soaked up by immigration. I attach the relevant bit from their report with accompanying graph mentioned in the text as screenshots 2a and 2b.
NPR, and their guest expert touch on it briefly in the interview–not offering much in the way of numbers, certainly not regarding immigrants, saying that they have a “small role” to play. See screenshot 3 from that article.
Lastly, by contrast, The Forum does toss out some numbers. Screenshot 4 has the quote illustrating this. If you want to follow the links, you’ll find them in the Forum essay link fourth below.
I don’t want it to pass un-noted, so let me pause quickly to highlight something common to NPR and The Forum’s work.
Repeating (with links intact), the relevant bit from the Forum’s piece:
“But more recent data shows a more muddled picture. Notably, even as immigration increased in 2022 and 2023, housing price growth slowed, indicating that housing demand attributable to higher immigration levels may not be the primary driver of rising housing costs.”
Now, a quick turn to NPR for a fresh quote from them. Note, this is an interview, so “Martinez” here is NPR’s A Martinez, and East is their expert, Chloe East, associate professor of economics at the University of Colorado Denver.
“MARTÍNEZ: Under President George W. Bush’s administration, 10 million people were deported. About 5 million people were deported under his successor, Barack Obama. Those numbers include what the Department of Homeland Security calls returns and removals. The Bush administration focused on worksite raids while Obama focused on deporting people with criminal histories and recent unauthorized border crossers.”
“EAST: The mass deportations did not improve housing prices. And if anything, they actually worsened housing prices because so many undocumented immigrants work in the construction industry. And it’s clear from the research that U.S.-born workers do not take the jobs that are left behind when people are deported.”
As I say above, this is a highly complicated issue, and quick and easy comparisons like that made by NPR, East, and The Forum should be ignored. They’re not worth the paper they’re printed on. There are many things that are different between the situations that these three are trying to compare (the sheer scale of the migrant wave being one — see again picture 1 in this post) so as to make any conclusion drawn meaningless.
There is a concept in physics and mathematics called convergence. There are multiple ways this comes up, but the one top of mind to me as I write this is the idea in convergence in quantum field theory. Put simply, it’s a way to assess your confidence in numbers you get.
You gain confidence in your methods and results when you note that, even starting at different values, running the numbers always gets you to the same fixed points, the same values. The results converge.
I am skeptical of the numbers either casually or carefully tossed out by all of the references below. I am not skeptical of the ideas that they share in common.
If you ask me what I think about illegal immigration and housing prices, I would say that yes, the massive (MASSIVE) wave of illegal and asylum-seeking immigrants flooding our country during Biden’s term in office did raise housing prices, but not hugely, and not uniformly.
If the sum total of things that drive housing affordability were put on a line from 0 to 100, I guess that illegal immigration would be in the single digits. Illegal immigrants and those with temporary immigration status don’t buy land, they don’t purchase homes. They rent, and they likely rent the kinds of places that don’t check your credentials too closely.
Who does this extra demand hurt? It hurts the kind of people who rent and who rent places that don’t check your credentials closely; it hurts low income people with poor records of renting.
That’s not all, however.
Repeating a partial quote from the Forum piece, we see their claim that a 1% increase in immigrant population in a city leads to “ … a 9.6% increase in home prices in nearby metropolitan areas. That study suggests that as immigrants move to a given metropolitan area, natives tend to move to surrounding areas, indicating that these spillover price effects may be driven by native-population movements.”
Citing similar research as The Forum (in addition to others) the FAIR piece offers a similar conclusion. Due to space concerns, I attach this lengthy quote as screenshot 5. Any links, footnote and otherwise, can be found in the FAIR report.
For a variety of reasons, one of them being an influx of people living in an underground economy, a sudden inrush of immigrants to an area causes current residents to move out.** They don’t leave the state of course, they translate a few miles away and compete for scarce housing in the exurban areas, driving up prices.
Give the resources a read and, if this is a real passion, do some looking on your own. Filter this through your own experiences: one of the things not really touched on in the resources below that I think is a huge gap in the discussion is how this whole thing looks different in different regions. Housing in rural areas vs. urban will be different. Housing in the Midwest vs. the coasts will be different.
And please resist the temptation for easy, comfortable answers no matter who is pitching them to you.
Remember, as Feynman said, the first rule is to not fool yourself, and you are the easiest person to fool.
**Racism is likely one of the reasons, though interestingly I remember reading about how blacks that had lived in the North prior to the Great Migration objected strongly to the sudden influx of Southern Blacks to their neighborhoods. This makes me think that part of it could also be class.
https://www.congress.gov/119/meeting/house/118884/documents/HHRG-119-GO05-20260122-SD008.pdf
https://www.fairus.org/about-fair
https://www.npr.org/2024/10/18/nx-s1-5138059/examining-how-undocumented-migrants-are-affecting-housing-prices
https://forumtogether.org/article/explainer-immigrants-and-housing/
https://forumtogether.org/landing_page/about/
READ THE FULL COMMENTARY AT COLORADO ACCOUNTABILITY PROJECT
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