New Study: Immigration Caused 40% Of Rent Hikes Over 10 Years

Immigration accounts for as much as 40 percent of U.S. rent increases as the housing affordability crisis continues to plague millions of Americans, according to a forthcoming study shared exclusively with The Federalist.

The paper, “Immigration and Rent: A PUMA-Based Spatial Analysis,” will appear this fall in Cityscape magazine as part of a collection of works exploring the relationship between immigration and housing markets.

The research conducted by Dr. Jason Richwine, a resident scholar at the Center for Immigration Studies, found that the surge of immigration which started during the Biden administration has direct implications on the affordability of housing in America today.

His measurement of migration accounts for both legal and illegal immigrants. Although he noted that the exact amount of each within that percentage is hard to quantify as the word “immigrant” has become a gray area.

The Proof Is In The PUMA

Since 2020, home prices have increased by 54 percent nationwide and more than 50 percent in 73 of the country’s 100 largest metros, says Axios.

A recent Federal Reserve working paper found that unauthorized immigrant worker flows caused 30 percent of the total increase in house prices and 20 percent of the increase in rent.

From Dr. Richwine’s examination of data from 2013-2022, his findings attribute immigration to 40 percent of the real rent increase. His study takes into account the indirect “spillover effects” caused by immigration.

Dr. Richwine’s study uses a different kind of sample size called a PUMA (Public Use Microdata Area) — the smallest geographical unit available to researchers from the United States Census Bureau.

In past studies, a number of researchers observed a positive correlation between immigration and housing values using Metropolitan Statistical Area (MSA) spatial analysis. They estimated “an immigration inflow equal to 1 percent of a city’s population is associated with increases in average rents and housing values of about 1 percent.”

“You look at how much immigration is going up in a certain area, like a state or a county and then sees what the effect on housing is there,” Dr. Richwine said. “But the problem with that literature has been the fact that rent tends to be very much spatially correlated – if rent goes up in one county, its likely to go up in an adjoining county.”

Dr. Richwine calls this the “spillover effect.” By separating the spatial effects and then measuring the indirect “spillover effects,” this research paints a clearer picture of immigration’s overreach into communities, theoretically spread over the whole country.

“Taking all spillover effects into account, a simultaneous 1 percentage-point increase in immigration in all PUMAs is associated with an average increase in native rent of 1.46 percent,” Dr. Richwine’s abstract reads. “Along with a 0.65 percentage-point increase in the share of natives who are burdened by a high rent/income ratio.”

Based on these findings, for every 1 percentage point change in immigration, cost of rent went up by about 1.5 percent. Meaning, if there’s a 10 percent point change in immigration, then it would be a 15 percent increase in rent. When that rent goes up in one PUMA, it also causes rent to go up in surrounding PUMAs because of the way the markets are intertwined.

“Immigrants coming into one PUMA is kind of like throwing a little stone into a lake and you see the ripples coming away,” Richwine said. “Where the stone splashes are the direct effects, and the ripples are the indirect effects.”

The study find that those indirect effects spread over the whole country, making larger ripples near the adjacent PUMAs. These reverberations happen spatially when immigrants come to a large share of American geography.

“If we just had immigration to one PUMA, it wouldn’t really have a very large effect, but the fact is we have immigration coming to lots of PUMAs,” Richwine said. “And under the model, if you have immigrants coming to every PUMA, that’s like throwing thousands of stones into the lake all at once, and then all those ripple effects kind of interact with each other.”

In the city of Los Angeles alone there are 50 different measured PUMAs.

LA is a known immigration hub and sanctuary city, with 35 percent of the population of Los Angeles County being foreign-born. The current cost to rent is also 36 percent higher than the national average. Los Angeles also faces a historic housing crisis. In 2021, California mandated LA must add more than 450,000 housing units by 2029 to keep up with the current demand. However, the city has only issued permits for 81,306 housing units so far.

Biden’s Border Crisis

From 2021-2024, the United States saw the largest influx of immigrants in its history.

During the Biden surge, over 10 million unauthorized migrants entered the country illegally. Last year, during a press conference, Border Czar Tom Homan told the Washington Examiner he estimated “at least 20 million” immigrants were living in the country illegally.

“10.5 million we know of came to the border. How many don’t we know of?” Homan said. “A thousand people could have crossed a day that we didn’t know of.”

Former DHS Secretary Alejandro Mayorkas granted tens of thousands of people parole in violation of Section 212 D-5 of the Immigration Nationality Act or adjustments were made to give migrants Temporary Protected Status, allowing them to live in the United States without a visa.

The Migration Policy Institute estimated 5-6 million migrants without visas were granted entry.

Dr. Richwine also recently wrote about an academic paper examining the motivations of migrants passing through a Honduras shelter, Casa del Migrante, in 2022. 99 percent said they were coming to the United States for “economic reasons,” while only 1 percent claimed humanitarian protection.

Dr. Richwine wrote that the data from the shelter gave “reason to suspect that most of the Biden-era “asylum seekers” were economic migrants with “an incentive to claim” asylum seeker status in order to more easily enter the country.

By early 2024, the total foreign-born population reached a record high of 51.6 million, representing 15.6 percent of the overall U.S. population.

According to the “Worst Case Housing Needs 2025” report to Congress from the Department of Housing and Urban Development, “an immigration-driven increase in households has contributed to a significant increase in housing demand, thus driving up housing prices.”

Housing Affordability Implications

Dr. Richwine’s research comes at a time when the housing affordability crisis in America has become a hot-button political issue, and the Senate is expected to vote on a final version of the 21st Century Road to Housing Act.

Dr. Richwine shared that his findings show economic impacts in terms of housing and immigration are only one part of the story. The indirect ripple effects, though hard to quantify, demonstrate major political and cultural changes communities experience nationwide as a result of immigration.

“Regardless of how immigration may or may not benefit the economy, there are people who feel like they’re losing a sense of their own nationhood,” Richwine said. “They have immigrants coming into an area and suddenly it feels very culturally different.”

Based on Richwine’s findings, building more housing would not mitigate but might even escalate the indirect spill-over effects that happen in a community.

“Housing will always be a limited commodity and its always going to be slower than immigration,” Dr. Richwine said. “It’s difficult to adapt quickly but even if we did, that would be a pretty significant transformation that fundamentally alters the character of existing neighborhoods. If that’s the solution than you really have to deal with all the other major political, cultural, and economic in-direct effects that are going to come from transforming neighborhoods and towns like that.”

Dr. Steven Camarota, Director of Research for the Center of Immigration Studies and guest editor of the upcoming Cityscape edition, testified at a congressional hearing in 2024 about the consequences of illegal immigration for housing affordability.

“Increase in population and households represents a significant increase in demand for housing in many locality. Our prior estimate indicated that some 60 percent of the growth in foreign born came from illegal immigration,” Camarota’s testimony reads. “Illegal immigration is significantly increasing demand for housing, particularly for rental property. Of households headed by an immigrant who arrived between January 2022 to August 2024, 89.5 percent responded they were renters.”

Dr. Camarota says the housing crisis needs to be understood in terms of “winners and losers” not necessarily “good and bad.”

“Some view increased rent and tax as good for the economy and that’s a win for some people, like land-lords for example,” Camarota said. “But the losers tend to be younger people just starting out who now can’t afford or find low-income housing in these areas and then need to move into adjacent communities.”

Camarota also spoke on the challenges he and his colleagues face in sharing their research finds with the corporate media.

“The media bias is such that among academic researchers in general, talking about the potentially problematic aspects of immigration is seen as problematic itself,” Dr. Camarota said. “Saying that immigration drives up housing prices should not be controversial. It’s not all bad, it’s not all good, but you can’t say it’s not happening.”

Libby Bandelin is a reporting and editing intern at The Federalist.