By Moira Warburton
WASHINGTON (Reuters) – Republican presidential candidate Donald Trump and members of his party running for U.S. Senate are blaming immigrants for the rising cost of housing, though a review of economic data and independent research suggests their effect is limited.
In making this argument, former President Trump and his allies are using housing costs — a major economic concern of American voters — as a reason to crack down on immigration, one of his core campaign issues.
Unaffordable housing was voters’ second-biggest concern about the U.S. economy, according to a Reuters/Ipsos poll in August. One in three voters cited housing costs, second only to 56% who cited concerns about income-lagging inflation.
Vice President Kamala Harris, Trump’s Democratic rival in the Nov. 5 election, has put housing at the center of her economic conversation with voters. She plans to encourage new construction and lower costs for renters and homebuyers, largely through tax breaks.
Over the past decade, the US has built new homes and apartments at an annual rate that is about 30% slower than before the 2008 financial crisis, leaving the market 1.5 million units behind what would be needed to balance supply and demand to bring, according to Freddie Mac estimates. . Other forecasters, most notably Moody’s Analytics, put the shortage closer to 2.9 million units.
That shortage plus COVID-19-fueled inflation has pushed average rents up about 23% compared to 2020, Apartment List estimates show. According to real estate company Zillow, U.S. home prices have risen 50% and rents have risen 35% in the past five years.
Immigration is “driving up housing costs,” Trump said at a rally in Arizona in late September, standing in front of a backdrop that read: “Make housing affordable again.”
During his speech in Tucson, Trump pointed to the number of immigrants entering the United States in recent years compared to the number of homes built, two statistics also used by Kari Lake, the Republican Senate candidate in that state, as evidence of their argument .
“It’s just common sense,” Lake said in an interview. “These people have to live somewhere, and this is basic supply and demand.”
In Wisconsin, Republican U.S. Senate candidate Eric Hovde told a local news outlet that closing the border would ease economic pain points.
“We are already struggling to provide affordable housing and health care to our own citizens,” Hovde said. His campaign did not respond to a request for comment.
LIMITED LINK, ACADEMICS SAY
Academics who study the intersection of immigration and housing say the influx of migrants has a small effect on prices, with a 1% increase in a city’s population typically increasing rents and house prices by a corresponding 1%.
Overall consumer prices have risen 21% since 2020, according to federal data. At the Massachusetts Institute of Technology’s Urban Economics Lab, director Albert Saiz said his research shows that the surge has been the main driver of home prices and rents, followed by the rise in remote working, which led to demand for larger homes with office space and more homes outside. major coastal cities.
The effect of immigration follows these factors, he said.
“Quantitatively, I don’t think it even comes close to explaining what happened,” Saiz said. “Clearly the other issues are more important.”
Madeline Zavodny, an economics professor at the University of North Florida, co-authored a recent article from the Federal Reserve Bank of Dallas that cited immigration as one of the factors driving up rents. She said workers who entered the country illegally could contribute to that effort.
But she also noted that because migrants, especially those entering illegally, make up a large share of the construction workforce, they are likely to have “a greater impact on housing supply than on demand,” driving down housing prices overall.
The Trump campaign did not immediately respond to a request for comment on economists’ findings.
The idea that immigrants are fueling a national housing shortage stems from the economy’s false impression that there is a fixed supply of housing, says Julia Gelatt of the nonpartisan Migration Policy Institute. “Immigrants fill housing units, but because immigrants work at a high rate in construction and remodeling, they also help increase housing supply.”
That fact is likely understood in a border state like Arizona, where immigration has been a top issue for decades, said Barrett Marson, a Republican strategist based in the state.
“Most voters are smart enough to know that … immigrants who are day laborers are not moving into a home in my price range,” he said.
But in elections where the cost of living is a major issue in voters’ minds, Marson said, “the fear mongering doesn’t have to be true to be effective.”
(Reporting by Moira Warburton; additional reporting by Ann Saphir in San Francisco; Editing by Scott Malone and Howard Goller)
