Former President Donald J. Trump has said immigrants are helping to cause the nation’s housing crunch. But economists say deporting them could exacerbate the problem.
Credit...Scott McIntyre for The New York Times

Trump Blames Immigrant Surge for Housing Crisis. Most Economists Disagree.

The former president often implies that deportations will bring down housing costs. Reality is more complicated.

by · NY Times

Former President Donald J. Trump and his running mate, Senator JD Vance, regularly blame America’s housing affordability crisis on a recent surge in immigration. They point to their plans for mass deportations of undocumented workers as part of the solution.

But most economists do not believe that immigrants have been a major driver of the recent run-up in housing prices. Rents and home costs started to surge in 2020 and 2021, before the flow of newcomers began to pick up in 2022 and 2023.

And while immigrants could have kept housing demand elevated in some markets, past studies suggest that they are a small part of the overall story. Even the economist whose paper Mr. Vance had cited as evidence said in an interview that she thought that immigration’s recent impact on housing costs had been minuscule.

In fact, a number of economists and housing industry experts said that one of the solutions Mr. Trump was proposing — large-scale deportations — could actually backfire and make the housing crisis worse.

That’s because immigrants do not simply add to the demand for housing: They are an important part of the work force that supplies it. Foreign-born workers make up a quarter of the construction labor force, and they are especially concentrated in trades like plastering, hanging drywall and roofing.

Across many booming housing markets, particularly in the South, the recent flow of migrants has helped residential builders meet demand for both skilled trades and relatively unskilled laborers, industry groups say and job market data suggest.

“In the long run, immigrants are the solution to the housing crisis,” said Exequiel Hernandez, an associate professor who studies immigration at the Wharton School at the University of Pennsylvania. “Without immigrants, you can’t increase the supply of housing.”

Not just a demand story

Take Adriany Colina, a 27-year-old mother of three from Venezuela. Ms. Colina has been living in shelters since she arrived in the United States last October. That means she is not putting much pressure on the housing market in Denver, where she resides.

Ms. Colina is putting together an application to rent an apartment, but because she does not yet have a Social Security number, a bank account or pay stubs, completing it has been a challenge.

“All the money I’m making, they give me in cash,” she said in Spanish. “It’s been very difficult, very difficult.”

On the other hand, she is contributing to the local supply of buildings. She learned to do construction work while cleaning carpets on construction sites after arriving. Now, she spends a few days each week working in construction, and one or two installing carpeting on her own.

While Ms. Colina is just one story, her experience matches up with several broader trends. It is true that immigration has surged in recent years. About 2.6 million people immigrated into the United States in 2022 and 3.3 million in 2023, based on Congressional Budget Office estimates, up from an average of 900,000 per year before 2020.

But like Ms. Colina, relatively few of those newcomers are buying houses. About nine in 10 households headed by a recent immigrant rent, based on government data. And in the rental market, community groups report anecdotally that many immigrants stay in shelters or doubled up in substandard housing — which may be limiting how much demand they are adding to the housing market.

Yoli Casas is the executive director at ViVe Wellness, a nonprofit in Denver that has been helping to find housing for recent migrants. She said landlords preferred the stability of more established renters, and often asked immigrants for extra documents: notarized proof of employment, and sometimes several months of security deposit.

In her view, competition from immigrants “wouldn’t affect people who are from here, who have their papers,” she said.

Little evidence immigrants are fueling housing costs

Actual data on how fresh immigrants are affecting housing remains limited, given how recent the influx has been. But there is little to suggest that immigrants are a major driver of recent housing cost increases.

When Mr. Vance reiterated the claim during last week’s vice-presidential debate, for instance, he followed up with a social media thread citing three links.

The first was to a speech by a Federal Reserve governor that asserted immigrants “could” be putting upward pressure on the housing market, without citing any research. Another was not specifically related to housing shortages.

The final link was to a study that did find that recent immigration in any given city tend to come alongside an increase in rents and home prices, based on data from 2000 to 2012. But the author of that research, Susan Pozo, a Western Michigan University economics professor, said the way in which her results were used made her “kind of cringe.”

For one thing, Dr. Pozo and her co-authors found that places with growing immigrant populations tend to have rising rents — not that the immigrants are provably the reason for that rent growth. It could be that the newcomers were attracted to booming local economies that were already prone to faster rent increases.

And even if immigrants are the sole cause of the price increases, the effects are minor. Dr. Pozo said that if her old results were applied to the recent immigration numbers, they could explain about one percentage point of the 58 percent rise in home costs over the decade through 2023.

“This really can’t explain this much more dramatic increase in home prices,” she said.

There are bigger drivers of high costs

That is not to say there is no affordability crisis. Home prices are up sharply since the start of the pandemic, and rents have surged by 25 percent.

But those trends have been fueled by a number of other factors, including a population reshuffling amid the pandemic, a dearth of starter homes thanks to a building pullback in the wake of the 2008 housing crisis and widespread barriers to cheaper construction.

In New York City, for instance, local housing experts say the recent run-up in rents has come from a failure to build more in the lower-density parts of the city, not from an influx of people, which the city has absorbed many times before.

“When we talk about immigration, the numbers today aren’t out of line with historical numbers,” said Howard Slatkin, executive director of the Citizens Housing and Planning Council of New York. “What’s different is that we stopped building housing several decades ago and we used up all the slack that we had.”

When asked to comment for this article, Karoline Leavitt, a Trump campaign spokeswoman, stuck with Mr. Trump’s argument.

“President Trump is going to deport Kamala’s illegal immigrants AND cut housing costs for American citizens at the same time by reducing inflation and cutting red tape for developers,” she wrote in an email.

But when it comes to housing supply, some economists warn that deportations could backfire.

Deportation plans could exacerbate shortage

While it is not clear exactly what Mr. Trump and Mr. Vance mean when they talk about mass deportations, economists at Goldman Sachs have estimated that a Trump administration might expel anywhere from 300,000 to 2.1 million people in 2025. The low end is based on removal trends from Mr. Trump’s earlier term in office, and the higher end is based on deportation trends from the Eisenhower administration in the 1950s, which Mr. Trump has suggested he would like to emulate.

In markets where undocumented workers make up part of the construction labor force, past experience suggests that removals at that scale could mean that fewer houses would be built, potentially pushing up home prices.

From 2008 to 2013, a federal program called Secure Communities deported more than 300,000 undocumented immigrants. Those deportations notably reduced the construction work force in areas where the program was put in place, according to research by Troup Howard, an economist at the University of Utah. Home construction slowed, and home prices increased.

If deportations were carried out on an even larger scale today, “I would absolutely expect that it would depress housing supply and lead to higher home prices,” Dr. Howard said.

Other side effects

Nor is America’s housing market a monolith. While much of the nation is struggling to provide enough housing, some places are struggling with aging and shrinking populations. And in those markets, immigration can provide a solution.

Because they are often low income and already mobile, new immigrants have a long history of filtering out to cheaper places that want new residents to revitalize flagging downtowns or suburbs.

That’s why some shrinking cities have actively courted immigrants, seeing them as a key to future prosperity. In St. Louis, a nonprofit called the International Institute is working to recruit recent arrivals with legal status and find landlords willing to fix up vacant buildings to house them. A local philanthropy raised several million dollars to co-sign leases and cover rent for a few months, along with helping the migrants and refugees find steady work so they can take over paying the bills.

“As a city, this is exactly what we need,” said Moji Sidiqi, the International Institute’s outreach director for Afghan refugees, adding, “St. Louis needs people to come here to fill up these homes, fill up these neighborhoods.”

Ben Casselman contributed reporting.

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