‘Immigration isn’t driving housing unaffordability in the U.S.—government policies, restrictive zoning laws, and rising interest rates are. In fact, immigration could be part of the solution by boosting the construction workforce and revitalizing underinvested neighborhoods.’
Editor’s Note: The following article is part of the People’s Tribune and Tribuno del Pueblo‘“Debunking the Lies About Refugees, Migrants and Immigrants” series. This article originally appeared at Invisible People.
Housing affordability and immigration are two hot-button issues in the 2024 election. Some candidates have tried to combine these two issues by suggesting that the recent surge of 3.3 million immigrants from South America is to blame for the country’s high home prices. However, the real reason housing is unaffordable in many parts of the country is much more complicated.
During an interview with Fox News in early August, Republican vice presidential candidate JD Vance repeated claims that housing costs are high because “there are 20 million illegal aliens who shouldn’t be here and who are competing with Americans for scarce homes.”
Vance’s view is part of a broader effort by right-wing politicians to blame newcomers for America’s economic woes. Right-wing publications like The Daily Caller and think tanks like the American Enterprise Institute have tried to recycle these claims by arguing that immigrants are increasing demand for housing, which therefore contributes to price growth.
These arguments artfully ignore some of the main drivers of housing costs, namely high borrowing costs and low housing supply. Immigration has no impact on either of these factors.
So, how should voters think about immigration and housing prices in this year’s election?
Housing Is Unaffordable Because of Government Policies, Not Immigration
Affordable housing has been a longstanding issue in the U.S., one that was greatly exacerbated by the COVID-19 pandemic.
Data from Redfin shows that the U.S. median home price has increased by roughly 44% from $303,000 to more than $439,000 since 2020. Rents have followed a similar trajectory, growing by more than 30% since 2020 to a median rent of $2,070 for a two-bedroom apartment.
Governments created additional subsidies for homeowners and renters who lost income during the pandemic. These subsidies greatly increased the demand for housing, which helped drive prices upwards.
However, governments struggled to undo some of the most pernicious policies that prevent new housing from being built, such as restrictive zoning and land use laws. Many of these laws are enacted at the local level and often limit the size and types of homes that can be built.
The Biden-Harris administration created an incentive program that would pay cities and states to repeal restrictive zoning and land use laws. However, the efforts have not had much of an impact thus far. According to the Federal Reserve Bank of St. Louis, the number of privately owned housing units under construction has declined every month since October 2022.
Meanwhile, the Federal Reserve has raised interest rates a total of 11 times since March 2022 to combat persistent inflation. This has made it harder for developers to access the necessary capital to build their projects and makes mortgages less affordable for homebuyers.
Immigration Increases the Number of Construction Workers, Which Is Necessary to Bring Down Home Prices
Many economists agree that the best way to bring down home prices is to increase the supply of homes. Doing so has proven to be more challenging than it sounds. Developers are still scarred from the economic impacts of the 2008 financial crisis, and cities across the country are hesitant to increase their density to build more homes.
Immigrants could play a key role in untangling this knot by improving labor force participation rates in the construction industry, according to a study by economists from the universities of Utah and Wisconsin.
Census data shows that the construction industry has become more reliant on foreign-born labor. In 2023, about 31% of construction workers nationwide were immigrants, compared to 15% in 2016. As the study suggests, increasing the number of immigrants also increases the construction output.
However, restrictive policies have reduced the number of immigrants in the U.S. since 2022, which is contributing to the lower output of new homes. This is part of the reason why developers are having a hard time getting new projects off the ground.
“I can’t say how many times our members have said, ‘We’d bid on more work, we’d be doing more projects if we had more people to do the construction,’” Brian Turmail, vice president of public affairs at Associated General Contractors of America, told NBC News.
Immigration Can Stabilize Underinvested Neighborhoods and Make Them More Desirable for Middle-Class Homebuyers
Much of the discussion around housing affordability focuses on America’s highest-price metro areas like New York City or Los Angeles. These areas are often the most sought-after and are surrounded by lower-priced and less desirable neighborhoods on the periphery.
Research from the New American Economy suggests that immigration can stabilize the housing markets in less desirable areas and make them more attractive to middle-income buyers. The research points to areas like Newark, New Jersey, where immigration has helped reverse population declines and added thousands of dollars of value to local homes.
“Immigrants tend to avoid places with the worst housing affordability problems, in many cases becoming part of the solution,” the research says.
Stabilizing underinvested neighborhoods can improve housing affordability and the quality of life for residents. One way it can improve affordability is by increasing demand for property in a certain part of town, which can attract private investment in dedicated housing and amenities like grocery stores and small businesses.
Increasing investments in less desirable neighborhoods can reduce blight and help modernize an otherwise aging housing stock. Both factors can make a neighborhood feel safer, which improves the quality of life for residents.
How You Can Help
The pandemic proved that we need to rethink housing in the United States. It also showed that providing additional support and protections for renters is a clear-cut way to reduce future increases in homelessness.
That’s why we need you to contact your officials and representatives. Tell them you support keeping many of the pandemic-related aid programs in place for future use. They have proven effective at keeping people housed, which is the first step to ending homelessness.
Robert Davis is a freelance journalist based in Colorado who covers housing, police, and local government.
