


Sen. J.D. Vance (R-OH) sparked a social media debate this week when he claimed illegal immigration drives up the cost of housing.
After an economics professor attempted to correct Vance on Twitter, sharing a graph that suggested rent had risen independent of immigration levels, Vance responded by calling the professor one of the “left wing ideologues” in academia and insulting his IQ.
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Senator, I have put together the chart showing the two variables you were trying to link. https://t.co/edC45zOqoK pic.twitter.com/IFVDvPRQAU
— Justin Wolfers (@JustinWolfers) May 22, 2023
Vance highlighted several flaws in the professor’s argument, which had many defenders on social media.
An obvious issue here is that the green line is cumulative and the yellow is annualized. People rightly point out that college professors are left wing ideologues.
— J.D. Vance (@JDVance1) May 22, 2023
A bigger issue with people like Wolfers is that he has an IQ of 110 but thinks it’s 140. https://t.co/bJXy2UOMPb
Among them was the likelihood that the professor used only legal immigration figures in his analysis, while the problem Vance described had much more to do with the historic levels of illegal immigration.
Immigration does indeed strain housing markets, multiple studies have found.
The pandemic compounded that pressure by slowing construction on new homes and disrupting the supply chains that builders use to obtain materials.
It’s an issue Vance has addressed previously in his young Senate career.
“If you think about what it means to have 20 [million] or 25 million undocumented, illegal immigrants in a country, in a situation where we’re not building enough housing, that puts incredible pressure — you have way more buyers for way fewer homes,” Vance said in February during a Senate Banking Committee hearing.
The slowdown in residential construction has crunched the housing supply at a time when a record number of asylum-seekers are pouring over the border.
With a shortage of houses on the market and a growing number of people opting to stay put in homes they financed at far lower interest rates, the cost of existing houses has climbed dramatically.
But the increase in home values is not evenly distributed across the country.
In San Francisco, for example, home values have dropped “faster than almost anywhere else in the country,” data from mortgage analytics firm Black Knight shows, as demand to live in the area evaporates. Seattle also showed a significant drop in the price of a home.
Several factors have driven people from those cities, such as crime and high taxes. In some of the places where they’ve chosen to move, however, they have discovered that growing populations of undocumented immigrants are competing for the limited housing available.
The problem is not evenly distributed among income groups, either.
Immigration affects blue-collar people more dramatically than higher-income people, according to a 2007 paper published in the Centre for Research and Analysis of Migration.
“The individuals who lose more from immigration are less educated native workers who rent their house,” the paper’s authors wrote.
The negative effects on renters are more pronounced in part because rising housing costs don’t benefit them, while a homeowner sees his or her investment grow when home values rise.
And the most recent pattern of immigration — the arrival of more than 2 million people at the border in the last fiscal year alone, most of them with low education and few professional skills — means the increase in demand for housing is concentrated heavily in the market for lower-cost rentals.
For the cost of rent in cities, immigration causes “an economic impact that is an order of magnitude bigger than that found in labor markets,” economist Albert Saiz wrote in a 2007 paper published in the Journal of Urban Economics.
Legal immigration caused rents to rise in the cities where immigrants settled, Saiz found, even when the arrival of those immigrants did not similarly affect wages.
A 2017 analysis by the Urban Institute found that while inflows of immigrants caused a significant increase in home prices and rents in big cities, the areas surrounding those cities experienced even more cost inflation.
As people moved out of urban neighborhoods that immigrants started to take over, their exodus to the suburbs drove up the price of housing there as well, the analysis found.
Texas has experienced some of the largest increases in home values, in at least some part because of its growing population of undocumented immigrants.
Housing affordability dropped more sharply in six of the largest Texas cities than it did nationally or in notoriously unaffordable San Francisco and New York City in the past several years, the Federal Reserve Bank of Dallas found last month.
Immigration-related population growth has combined with an influx of people relocating from other states to create a high-demand situation that builders, facing rising costs themselves, have not managed to satisfy.
Thousands of asylum-seekers are presently under the temporary care of local governments in New York City and other big cities, where officials have tried everything from using taxpayer money for hotel stays to converting school gymnasiums to temporary shelters.
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Some undocumented immigrants will disperse to other parts of the country in the months ahead, relieving pressure on the cities.
Ultimately, however, many of those immigrants will go on to compete with lower-income people in cities for both affordable housing options and space in public housing.