Deporting Immigrants Wouldn't Lower Home Prices

A bad idea in theory and in practice

Over the next week or so, I’m going to write a lot about JD Vance because, as the potential next VP and heir apparent of the Republican party, he is now one of the most important people alive.

His trademark issue is immigration. He believes that deporting and restricting immigrants is a kind of panacea for the nation’s ills, including our housing affordability crisis. In his mind, and in the minds of many other MAGA populists, it is the immigrant invasion that is negatively distorting the housing market. The logic is that it’s simple supply and demand: more immigrants equals less housing for legal Americans, which means higher prices.

It sounds nice, but it’s not true.

The picture of illegal immigrants that Vance and Trump paint is not a pleasant one. They are good for nothing scumbags who do not deserve to be in our country. If this is the case, we have to assume they are not doing very well financially. And if they aren’t doing well financially, there is no way they are clogging up the supply of housing that people actually want. The only thing they are going to be clogging are homeless shelters, which is actually what’s happening. So, if you want to say that the “illegal invasion” is increasing homelessness, I won’t argue with you.

What about the illegal immigrants that are doing financially well enough to compete with natives for housing? Well, if somebody can come here illegally and still figure out a way to make a decent living even with all of the challenges of their legal status, then we should be rushing to give them citizenship, not kick them out.

But, even if we should be admiring the illegal immigrants who are able to make citizen wages without being a citizen, aren’t they still hurting housing affordability? After all, they are still taking up supply.

Well, definitely not at the national level. Rent is more affordable now than it was in the 70s.

And that’s because, as Noah Smith explains, the rate of new households added each year in the US isn’t increasing.

In other words, the immigrants are just compensating for our deteriorating fertility rate. Thanks immigrants!

The only areas where immigrants might be pushing up rent are in the big metros. After all, most of the country’s illegal immigrants live in one of twenty cities:

You’ll notice that besides Chicago, JD Vance’s core Rust Belt constituency isn’t represented. And even with all the immigrants coming in, Chicago has less people today (2.6M) than it did in 1980 (3M). So, it’s kind of hard to say that immigrants are stealing housing from people when barely anybody even lives there anymore.

And in the rest of the Rust Belt, illegal immigration is a non-issue.

• Wisconsin has 75,000 illegal immigrants, 1% of the state’s population.

• Ohio has 90,000 illegal immigrants, 1% of the state’s population.

• West Virginia has 5,000 illegal immigrants, less than half a percent of the state’s population.

And so on and so forth. If anything, the biggest issue facing the Rust Belt is too few people, not too many:

Ok, fine, but what about the major coastal cities? Aren’t illegal immigrants raising rents there?

First, these aren’t the places Vance talks about in his speeches. Second, even if the illegal immigrants add demand pressure, they also help boost supply, as they take up 1.6M construction jobs:

As you’d expect, that’s a large percentage of the construction industry:

And no, they aren’t “taking jobs from natives”. The construction industry is currently 501,000 jobs short.

So yes, if you ban illegal immigrants, you might lighten up the demand a bit in big cities, but you will also be lightening up the supply. And I’d bet that the supply loss hurts more than the demand loss helps.

Housing is a simple issue that people make complicated. The reason you can’t afford a house isn’t because of the illegal immigrants, or AOC, or BlackRock. The reason you can’t afford a house is simple: there aren’t enough houses. For some reason, people just don’t understand this:

I really wish JD Vance could just be honest about this instead of peddling this false narrative about illegal immigrants.

July 26th Addition

I am now absolutely convinced that conservative populists are some of the biggest retards on the planet.