“Blame It on the Immigrant”: The Housing Crisis Edition

Homesteader repairing a fence (ca. 1940) | Lee Russell /  Farm Security Administration, Office of War Information Collection, Library of Congress

Here’s a tip from the US political playbook: if your campaign is struggling, if you don’t have actual policies but “concepts of a plan,” if you secretly or openly wish for the “good ol’ days” when black people did “black jobs,” if you “forgot” to declare the lavish perks from the Turks … just blame it on the immigrant. 

The “blame it on the immigrant” tactic pervades today’s political rhetoric, crossing ideological and political lines with a bipartisan ease Joe Biden can only envy. It takes the form of blatant scaremongering, like Trump and Vance’s dog-and-cat-eating immigrants (have we considered that it might have been hot dogs, a sign of assimilation to American cuisine?) to more complicated finger-pointing; the recently arraigned mayor of New York City claims that sparring with the Feds over more resources to address the city’s “migrant crisis” is at the bottom of his legal troubles. 

More insidious is when migrants are blamed for genuine widespread crises—the ones that, unlike pet theft, are actually impacting the lives of Americans. During the vice-presidential debate, Senator J. D. Vance attributed the high cost of housing, now an affordability crisis across the US to … yes, you guessed it, the immigrants. He said: “You’ve got housing unaffordable because you brought in millions of illegal immigrants to compete with Americans for scarce homes.”

Since Vance mentioned in his debate that “common sense” is his policy guide, let’s apply some to understand how housing, a necessity for all and the most important asset for a family, has become so unaffordable. Common sense and basic economics tell us that an increase in population would lead to an increase in the demand for housing, leading to higher housing prices and higher rents. The arrival of immigrants—who are people, after all—should therefore lead to higher rents and home prices. Most studies looking at housing and immigration have shown this relationship. 

Up to here, we agree. But we need to consider that housing markets do not work in isolation from the rest of the economy. Increased demand for housing also indicates positive aspects of population and opportunity growth—new business ventures, rejuvenating cultural offerings, an expanding tax base. Immigration is responsible for the reversal of population and economic decline in many localities, as seen in Utica, New York. Also: Springfield, Ohio. And in fact, an increase in housing demand essentially benefits the majority of Americans (65 percent of Americans are homeowners). Immigration, for them, translates into a tangible increase in wealth, a $3.7 trillion boost to home values. 

An uptick in competition negatively affects renters and poorer and younger people in search of housing. But immigration—or a growing population, period—is far from the main reason that housing prices are increasing for these folks. Since the Great Recession, institutional and other corporate investors have been buying housing in bulk—particularly in low-income, black, and minority neighborhoods in rising opportunity locations like Sun Belt cities, and towns rebounding from population losses. In the first months of 2024, investors bought 14.8 percent of all homes sold in the United States. The impact of cash investors is particularly significant in metropolitan centers, such as Atlanta, GA (21 percent of homes sold to investors), Memphis, TN (19 percent), and Orlando, FL (17 percent). In a block of Charlotte, NC, all but one house was bought in cash deals by investors, who now rent them out. These institutional investors favor lower-priced homes and easily out-bid the lower-income and first-time homebuyers competing in the same housing bracket. Many of these would-be first-time buyers remain renters instead, which increases competition for rental units. 

As your dreaded Econ 101 teacher would say: it’s all about supply and demand. So, what about the supply? In theory, developers should offer more housing to meet the growing demand. However, in practice and for the past 20 years, housing supply in the US has been starkly lower than average. The main culprit: regulations. In brief, American cities and suburbs are unable to produce housing, especially affordable housing, because our housing policy is similar in objectives to our immigration policy. The purpose is to keep others out—out of the country and out of the neighborhood. Local zoning laws and regulations act as an exclusionary mechanism. Property rights for a home provide an extension of rights as to what can occur in a neighborhood and who’s allowed to enter it, as evidenced in the strong opposition to Gov. Hochul’s dead-before-arrival affordable housing plan for the NY State. 

But there is another supply reason more directly associated with undocumented immigration: shortages in labor supply for the residential construction sector. These are immigrant jobs, not because migrants are stealing them but because few American-born workers are going into low-skill construction work. Indeed, the feminization of construction reflects the labor shortage. (Women construction workers are now a familiar sight in New York City.) And the labor shortage affects the housing supply. A recent paper found that an increase in immigration enforcement and deportations would result in large and persistent reductions in the construction workforce for both undocumented and domestic construction workers. Essentially, deportation would lead to a shock across the construction sector that would make the housing shortage worse, construction costs higher, and housing more expensive.  

There are many factors to blame for the extreme cost of housing in the United States. But immigration—which essentially amounts to population and economic growth—is not among them. Americans don’t bid for homes and rental units against undocumented migrants; they bid against investment funds and restrictive zoning regulations. Vance’s “common sense” is dangerously incomplete and manipulative. The migrant who drains social resources, commits crimes, beats you to a job offer, and snatches the small apartment you were about to make an offer on—especially impressive from those with no money and no paperwork—is a politically expedient fiction. Without undocumented immigrants, the United States would still be in desperate need of more housing and would have even fewer people available to build it.

Even worse, what about when the “childless cat ladies” lacking abortion options will begin to have babies? They will need more housing to fit the cats and the kids. Under the Trump and Vance immigration agenda, they will have to pay way too much for it. Or they can wait a couple of decades for their babies to get into construction work … Though they might have to eat their cats to make ends meet for that mortgage payment.