What economists say about JD Vance's claim that immigrants drive up housing costs

America’s two vice presidential candidates agreed Tuesday night that America is in the midst of a housing crisis in which too few homes and steady demand have led to soaring costs. 

But Sen. JD Vance of Ohio and Minnesota Gov. Tim Walz presented radically different views of how the country got there — and how to fix the problem. 

Housing is one of many issues Vance, the Republican nominee, believes are rooted in the arrival of undocumented migrants in America.  

“Look, in Springfield, Ohio, and in communities all across this country, you’ve got schools that are overwhelmed, you’ve got hospitals that are overwhelmed, you have got housing that is totally unaffordable because we brought in millions of illegal immigrants to compete with Americans for scarce homes,” Vance said, according to a CBS News transcript. Along with zoning reform, Vance and Republican presidential candidate Donald Trump have premised much of their policy on an unprecedented mass-deportation plan that they argue would reduce competition for housing.

Walz, the Democratic nominee, said the reasons for America’s housing crisis are more nuanced.  

“We can’t blame immigrants for the only reason,” he said. The fact of the matter is that we don’t have enough naturally affordable housing, but we can make sure that the government‘s there to help kick-start it, create that, create that base.” Walz and Vice President Kamala Harris, the Democratic presidential nominee, hope to use tax incentives and spending to spur housing construction and ease the financial burden of buying a home. 

Housing is expensive in the U.S.: The NBC News Home Buyer Difficulty Index remains extremely high, and shelter costs continue to account for the majority of consumer inflation, having climbed more than 24% since the onset of the Covid-19 pandemic. Rents have climbed even faster.

But many economists caution that connecting rising numbers of immigrants to housing costs is no simple thing. Some have said there is no way to examine existing data and surveys in real time to determine the extent of immigrants’ impact on individual housing markets — though a chart drawn up by Ernie Tedeschi, a former White House chief economist for President Joe Biden, showed no clear connection between foreign-born population growth and native-born home prices on a national scale.

Other economists have noted links between immigrants and increased housing costs. After the debate, Vance’s X account shared a link to remarks by Federal Reserve Governor Michelle Bowman, who said that “the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize” — though in the same speech, she said immigrants had also helped ease labor shortages.  

Vance later shared two studies on housing and immigration that showed a link between increased immigration and rising housing costs — though each offered various caveats, including noting that the impact changes over time. 

On Wednesday, the Cato Institute, a conservative think tank, published a blog post titled “JD Vance Is Correct: Immigration Increases Housing Prices, and That’s Okay,” arguing that while rising immigrant populations do lead to increased housing costs, “most of the increase in housing wealth caused by immigration accrues to native-born Americans” and that immigrants also increase the overall housing supply thanks to their outsized ranks in the construction industry.  

But in general, economists are skeptical that immigrants are the main driver of the current predicament. Chris Herbert, managing director of Harvard University’s Joint Center for Housing Studies, said that while immigrants do add to overall housing demand, “they cannot be blamed for the recent surge in home prices and rents that took off in 2020 and 2021.” That was when immigration reached its lowest levels in decades because of the pandemic, he said in a statement emailed to news outlets.

When immigration started to surge in 2022 and peaked in 2023, Herbert said, “growth in home prices and rents slowed dramatically.”

“Trends in interest rates and the pandemic-induced demand for housing were mostly responsible for the recent trends in housing costs,” he added.

Historically, immigrants have tended to coalesce in depopulated or underused towns or neighborhoods without directly competing with native-born residents, said Sharon Cornelissen, director of housing for the Consumer Federation of America, which advocates for equitable housing policies. She cited immigrant inflows that helped revitalize New York City and Los Angeles in the 1970s and the 1980s cities as they were dealing with the aftermath of white flight.

Middle Eastern populations have also been responsible for helping turn around the cities of Dearborn and Hamtramck outside Detroit, she said.

There is evidence that more recent immigrant influxes have proven difficult to handle for the communities where they have arrived.

In Brockton, Massachusetts, immigrants from a variety of countries, including Haiti, Cape Verde and countries in Central and South America, have strained local resources — though mostly in the form of emergency shelter capacity. NBC Boston reported this summer that immigrant-focused nonprofit groups have been helping place newly arrived families in motels and that they also tapped partnerships with private landlords to set up others in apartments.  

Housing problems predate the immigration surge in Springfield, Ohio, which has become a flashpoint in the national immigration debate, City Manager Bryan Heck said in a letter to Vance and Democratic Sen. Sherrod Brown this summer.

But Heck acknowledged the migrants had played a part in complicating the situation.

“Most recently, Springfield has seen a surge in population through immigration that has significantly impacted our ability as a community to produce enough housing opportunities for all,” Heck wrote, estimating the city’s Haitian population had increased to 15,000 to 20,000 over the last four years in a community of just under 60,000 residents.

The growth, he said, put a “significant” strain on the city’s ability to provide housing for all residents. Indeed, Zillow data shows a clear upward trend in Springfield rents this year compared with 2023. 

“Despite 2,000 additional housing units set to come online over the next three to five years, this is still not enough,” Heck said.

His demand? More aid from Washington.

“Without further support at the Federal level, communities like Springfield are set up to fail in being able to meet the housing needs of its residents,” he wrote.