Trump’s Deportation Plan Tied to Housing Crisis: Experts Warn of Negative Impact.
Donald Trump’s presidential campaign has proposed the deportation of millions of immigrants, suggesting it could help address the nation’s housing shortage. However, research indicates that such a move could backfire by worsening the very problem it aims to solve, as many of those targeted are involved in building homes.
Throughout his campaign, Trump, along with his running mate, JD Vance, has repeatedly linked immigration to housing issues. This connection became a focal point during the vice presidential debate when Vance blamed immigrants for driving up home prices since the pandemic.
“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.
The S&P Case-Shiller Home Price Index shows home prices have surged by over 50% since the pandemic, while hourly wages have only risen by 23%, making homeownership increasingly out of reach for many Americans. The housing shortage, exacerbated by population growth outpacing home construction since the Great Recession, has contributed to soaring prices, with Moody’s Analytics estimating a 2.9 million home shortfall.
The Impact of Mass Deportations on Housing
Trump and Vance argue that deporting illegal immigrants could ease the housing crisis, but studies suggest otherwise. A 2017 study published in the Journal of Housing Economics found that a 1% increase in an area’s immigrant population led to a 0.8% rise in home prices and rents.
Recent research also points to negative consequences from deportations. A March study by Troup Howard from the University of Utah, alongside researchers Mengqi Wang and Dayin Zhang from the University of Wisconsin, examined the effects of a federal program that deported 300,000 undocumented immigrants between 2008 and 2013. The study compared counties that experienced deportations with those that didn’t.
Many of those deported were employed in home construction. As these workers left, the industry faced a labor shortage, which slowed building efforts. Three years after the deportations, the average county had built nearly 2,000 fewer homes—equivalent to losing an entire year of construction. The shortage also drove up costs, with new construction parcels becoming 17% more expensive.
Immigrants Integral to Homebuilding
The study’s findings were unsurprising given the significant role immigrants play in home construction. In 2022, a third of all construction workers were foreign-born, according to the National Association of Home Builders. In certain trades, like drywall installation, immigrants made up as much as 64% of the workforce.
Jim Tobin, CEO of the National Association of Home Builders, highlighted the industry’s dependence on immigrant labor. “We have got to increase the supply of American-born workers, but until we do, the demand in our industry is so high that we rely to a large extent on immigrant labor,” Tobin said in an interview with Investopedia.
Tobin warned that mass deportations would disrupt the labor market, driving up labor costs that would be passed on to homebuyers.
Building More Homes Key to Affordability
Experts argue that to truly address the housing affordability crisis, the U.S. needs to significantly increase home construction. Many blame restrictive local zoning laws for limiting new developments and contributing to the housing shortage.
“There is pretty strong consensus among housing economists that the primary structural problem in the U.S. housing market stems from a very long period of underbuilding homes in this country due to unnecessarily strict land use regulations,” said Ralph McLaughlin, senior economist at Realtor.com, in an email.
While reducing demand might offer a temporary fix, McLaughlin emphasized that solving the housing crisis requires addressing supply-side issues by reforming building regulations to allow for more construction.
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