A Georgist Case for an Immigration Moratorium
Sources: Immigration and Housing Rents in America, How Does Immigration into the U.S. Affect the Country’s Housing Market, Some Love for the Infrastructure We Already Have, Immigrants are closing the Gap in Homeownership Rate
When we talk about the current real estate crisis the usual liberal YIMBY prescription is build more housing or more rent controlled apartments and section 8 housing vouchers or some other idiotic response that fails to account for three immutable facts that make these solutions unviable in the long run: 1) the prime component of housing, land, is inelastic in supply 2) not all housing is equal in terms of affordability, environmental impact and per capita costs for public services and infrastructure maintenance 3) as a planned “market” with an inelastic supply of the main factor it cannot reach an equilibrium; just like the Monopoly game it is heavily rigged in favor of landlords and bankers. When you understand this you understand that the YIMBY prescription to just build more housing is a prescription for more sprawl and the additional problems that sprawl creates but not necessarily more affordable housing. You also understand that the idiotic progressive prescription for more rent control is a prescription for more queues and more housing shortages because the slow bureaucratic machinations never keep up with population growth. We have reached a point in history where kicking the can down the road is no longer a viable option and any population growth without drastic housing and land use reform at all levels of government, significant investments in public transit and land value capture will only result in more sprawl, more congestion, more housing shortages, more environmental degradation (e.g. more landfills and deforestation) and less affordable housing for working class people in urban and suburban areas. With fertility rates below replacement level the biggest source of population growth in the US is immigration.
An increase in the number of immigrants equal to 1 percent of an MSA’s total population was linked with a 0.8 percent increase in rents and a 0.8 percent increase in home prices.
That's almost a one to one correlation. So an influx of say 10,000 immigrants to a city of 100,000 people would raise rents 8% which would put a significant financial strain on renters who would have otherwise had housing stability (i.e. 30% of household income).
t should be noted that immigration not only spikes rents in the urban core but also home prices and rents in surrounding suburbs. At least, 50% of Immigrants are homeowners and since immigrants tend to have more social mobility than native citizens they tend to get a mortgage faster. The demographic with the highest household incomes in the U.S. are Asian Immigrants and their progeny who also had the largest increase in homeownership rates over the past three decades.
This same increase in immigrants was associated with a 1.6 percent rise in rents and a 9.6 percent rise in home prices in surrounding MSAs.
And the inevitable consequence of immigration is more sprawl, more congestion, more environmental degradation (e.g. growing landfills and deforestation), and less affordable housing for working class people.
As immigrants move into an MSA, natives tend to move to surrounding MSAs, indicating that the spillover effects may be driven by native-population movements.
As an added bonus less small businesses will be able to afford commercial space and higher rents will be a greater barrier to entry for more start ups. This is not to say that immigration is inherently bad or that we need to bring back the national origins quotas, but when combined with our 2.5 century old addiction to sprawl, real-estate speculation and myopic greed it is a guaranteed recipe for disaster and until that changes mass immigration will only add fuel to the uncontained wildfire that is our real-estate market.