Immigration and Housing Costs: A Misguided Blame

By Moira Warburton

Overview

Republican presidential candidate Donald Trump and other party members are attributing rising housing costs to immigrants, despite research showing their influence is limited.

Housing Costs as an Election Focus

Trump and his allies are leveraging housing costs, a significant economic concern for U.S. voters, as they push for stricter immigration policies. According to an August Reuters/Ipsos poll, unaffordable housing was voters' second biggest economic concern, following inflation.

Vice President Kamala Harris has made housing central to her campaign, proposing new construction and cost reductions for renters and homebuyers through tax incentives.

Housing Market Statistics

Over the past decade, new home and apartment construction in the U.S. has slowed by 30% compared to pre-2008 levels, resulting in a shortage of 1.5 million to 2.9 million units, according to estimates. As a result, average rents have increased by 23% since 2020, and home prices have risen by 50% over the past five years.

The Republican Argument

At a recent rally, Trump claimed that the influx of immigrants is driving housing costs up, a sentiment echoed by Arizona Senate candidate Kari Lake. They argue that the population increase without a corresponding rise in housing supply is basic economics.

In Wisconsin, Republican Senate candidate Eric Hovde suggested that border closure could alleviate housing and healthcare pressures on American citizens.

Economists Weigh In

Academics point out that immigration has a minimal effect on housing prices. A 1% increase in a city's population leads to a corresponding 1% rise in rents. Other factors, including general consumer price increases and the demand for larger homes due to remote work, are more significant.

Experts recognize that while immigration contributes to rising rents, the effect is outweighed by other economic dynamics. Furthermore, many undocumented workers play key roles in construction, potentially increasing housing supply.

Julia Gelatt of the Migration Policy Institute emphasizes that while immigrants occupy housing, they also contribute to increasing supply, countering the notion they solely drive up prices.

Conclusion

Republican strategist Barrett Marson notes that voters are likely aware that immigrant labor does not typically compete in the same housing markets as they do. However, amid rising living costs, inaccurate narratives can still influence public perception and electoral outcomes.