How Biden Immigration Impacted Housing Markets
One of the clearest ways to judge public policy is not by its stated intentions but by its real-world consequences. Throughout history, governments have enacted countless policies with noble goals that nevertheless produced harmful results. Good intentions alone cannot overcome bad incentives, flawed assumptions, or basic economic realities. Few issues illustrate that principle more clearly […]
One of the clearest ways to judge public policy is not by its stated intentions but by its real-world consequences. Throughout history, governments have enacted countless policies with noble goals that nevertheless produced harmful results. Good intentions alone cannot overcome bad incentives, flawed assumptions, or basic economic realities.
Few issues illustrate that principle more clearly than immigration.
The Biden administration defended its border policies as humanitarian, arguing that the United States should provide refuge to those seeking a better life. Critics, however, warned that allowing millions of migrants into the country without sufficient controls would create consequences far beyond immigration itself.
One of those consequences has been housing.
Between 2021 and 2024, millions of additional migrants entered the United States beyond historical legal immigration levels. Regardless of one’s views on immigration policy, every additional person requires a place to live. Housing demand increases immediately, while housing supply takes years to expand through new construction.
That basic economic reality has now received additional attention through research from economists at the Federal Reserve Bank of Dallas.
In a working paper released earlier this year, economists Daniel Wilson and Xiaoqing Zhou examined the relationship between unauthorized immigrant worker flows and local housing markets. According to their analysis, increases in unauthorized immigrant workers can account for roughly 30 percent of the increase in home prices and about 20 percent of the increase in rents across the average commuting zone between early 2021 and early 2024.
The researchers estimated that an increase in unauthorized immigrant workers equal to one percent of a local workforce was associated with approximately a 2.2 percent increase in home prices and a 1.4 percent increase in market rents.
During the period studied, unauthorized immigrant worker flows averaged about 3.1 percent of initial employment across commuting zones. Applying the researchers’ model, that translated into an estimated 6.6 percent increase in home prices and a 4.3 percent increase in rents attributable to those population increases.