Many people blame increases in housing prices on increased immigration - among them the President of the United States. But it is not just in the US where this comes up; it is a talking point in Canada, Australia, and the UK. Is it true?

Yes, Increasing Immigration Likely Increases Housing Prices

The classic paper on this subject is Saiz 2007. An immigrant inflow resulting in a 1% increase in population increases rents and home values by about 1%.

Since then, a variety of papers have used shift-share instruments to estimate how much an increase in immigration affects housing prices: Kalantaryan 2014 (Italy), Degen and Fischer 2017 (Switzerland), Damm, Hassani, Kumar and Parra-Alvarez 2025 (Denmark), Gonzalez and Ortega 2012 (Spain). In general, these papers find that immigration increases the price of housing.1

The elasticity of house prices with respect to immigration seems to be around 0.5 - 3 - that is, for every 1% the population of an area increases through immigration, prices increase from 0.5% to 3%. This seems to be a pretty clear supply-and-demand story - immigration increases the demand for housing but it does not increase the supply.

However, I am a well-known hater of shift-share designs. Shift-share instruments rely on an exogenous prior distribution, and I don’t really buy this for immigration; they also confuse long-run and short-run effects (see Jaeger, Ruist, and Stuhler 2018 for a fuller explanation).

Thankfully for the validity of my conclusion, this evidence points in the same direction. A study using a difference-in-differences design in Turkey (Tumen 2016) finds that refugee inflows increase housing prices. Similar designs in Jordan (also with Syrian refugees) and Poland (with Ukrainian refugees) find similar results.2 Using yet another method, a model by Ottaviano and Peri also finds immigration increases housing prices; they find roughly the same elasticity as Saiz (0.6 - 0.8).

So: yes, immigration generally increases housing prices.3

Where Do Natives Go?

Implied in all this is that neighborhood composition changes. In many neighborhoods, natives will move out when immigrants move in.

The size of the price change will depend on how completely natives leave - if every immigrant moving in results in a native moving out, we’d see no demand change. If more natives leave than immigrants arrive and/or if the natives are richer than the immigrants moving in, prices might decrease. You’d expect to see a price increase only if fewer natives leave than immigrants move in and/or the immigrants are richer than the natives.4

The latter seems to be what happens in most countries. The former - where immigrants displace richer natives - appears to be what happens in the UK.5

Why Is This Result Different Than For Jobs?

I have previously argued that increasing the population through immigration does not seem to decrease wages (even though the supply of workers increases). Somehow, that isn’t a supply-and-demand story, but housing is. Why?

I believe this is likely because housing supply is constrained in a way that job supply is not. The process for increasing housing supply does not neatly follow trends in immigration; immigration acts as an exogenous shock to the demand for housing.6 There are more people; there are not more houses; prices increase.

Jobs differ in two important ways. Firstly, immigration affects both the supply and demand for jobs. Immigrants generally desire to work a job - increasing the number of job-seekers - but they also buy goods, purchase services, etc., increasing the number of jobs available. This is not true for housing; most immigrants affect only the demand for housing, rather than the supply.

Secondly, the supply of housing is much more constrained by regulation than the supply of jobs. You do not need to get regulatory permission to hire someone; you generally do to build a house. If one believes Ed Glaeser (and I do), the reason that expensive cities are expensive is primarily this regulatory burden. That burden is completely unrelated to immigration.7

Wait A Second - What If Immigration Does Influence Supply?

There is one group of immigrants that does influence housing supply, though: immigrants that work in construction. About 11% of US immigrants work in construction and about a quarter of all workers in construction are immigrants.

An increase in the size of this group should increase the supply of housing, and thus drive down house prices. This acts in the opposite direction of the overall effect, and thus will reduce the overall effect size. It’s also already included in the estimates above; they are estimated using all immigrants, not just the ones who don’t work in construction.

But there is one important wrinkle. Decreasing the number of immigrants suddenly can decrease the supply of housing. Exploiting the rollout of the Secure Communities program in the US, Howard, Wang and Zhang 2024 finds that increasing the number of deportations also causes home prices to rise, because fewer homes are built.

So: more immigrants = higher home prices. Fewer immigrants = also higher home prices.

How Large Of An Effect Is This, Really?

On a US-wide basis, the effect of immigration on housing prices is quite small.

I pulled US census data on both the change in non-citizen population and Zillow data on home values from 2014 - 2024.8 The increase in the number of non-citizen residents and naturalized citizens over the 2014 - 2024 period resulted in a total population increase of 2.46%.9 Given the above, we’d expect this to cause (nominal) house prices to increase around 2.5%.10

The average home price in the US actually increased 87.9%. Thus, immigration caused about 2.8% of the increase in house prices over this period (assuming an elasticity of 1). This is… not that large.

Of course, immigration is highly heterogeneous across areas. Therefore, I also analyzed by state and metropolitan area.

Statewide, the effects remain pretty small. North Dakota had the highest contribution of immigration to house price increases, at 8.37%. The median contribution of immigration was just 1.95% of the total home value increase (across states).

There is more heterogeneity by metropolitan area. It is plausible that all of the house price increases in Oxford, Alabama were due to immigration.11 If you live in Odessa, Texas you might be able to blame about 12% of the increase in house prices on the increase in immigration. Other than that… well, the median contribution of immigration to house price increases is just 1.09%. In San Francisco, it’s 2.79%. Over that decade, home prices in San Francisco increased 88%, but the vast majority of that increase was not due to immigration.

Nor are immigrants the reason the rent is too damn high. Rents and house prices are correlated but not identical; it is therefore worth examining both. Also, Peter Navarro says that “an estimated 20 million illegal entrants during the Biden years [increased rents]... 20 percent”.

This is obviously not true, because in the period 2020 - 2024, rents only increased 30.4%; illegal immigration did not drive two-thirds of rent increases. How much did it actually drive?

I don’t have data on non-citizen population count for 2020, so I looked at 2019 - 2024 data. During this time, the population increased by 1.74% due to immigration. Rents also have an elasticity of around 1 with respect to population increase, which would imply that rents would increase around 1.74% due to immigration. Peter Navarro is, shockingly, not correct.

Overall, immigration caused perhaps 4.3% of rent increases 2015 - 2024.12 The cities most affected by immigration-caused rent increases were Houston, Texas, Austin, Texas, and San Jose, California, but even in these cities, immigration caused perhaps 20% of rent increases. Note that this is not a 20% overall increase; immigration caused perhaps 20% of a 25% - 40% rent increase, so immigration caused rents to increase around 5 - 9% in the most affected metros in the country. This just isn’t very big!

The vast majority of the increase in both home prices and rent prices in the last decade isn’t due to immigration. Immigration does increase house prices, but not very much.

What About Foreign Investment?

In some supply-constrained cities, the concern is not about immigrants per se. Instead, the concern focuses on foreign investment properties - rich foreigners speculatively buying property as an investment vehicle. Some but not all of these foreign nationals will actually live there; some apartments will be second homes that sit empty much of the time. (The quintessential example of this is One Hyde Park, where most of the $50M+ apartments are unoccupied second homes.)

There are a couple of papers that look at this channel specifically. Sá 2025 examines foreign investment in housing in the UK, and finds that foreign buyers are responsible for 20% of the home price increase 1999 - 2019. This is actually a large increase, much larger than the effect from immigration.13 Interestingly, she finds no evidence of a widespread “One Hyde Park” effect - more foreign owners do not increase the vacancy rate in a municipality. It seems that rich foreign owners use their investments to generate rental returns, rather than leaving them to moulder.

Evidence from Canada shows smaller effects. In 2016, British Columbia introduced a tax that applied to foreign buyers only. Prices in neighborhoods with many foreign buyers declined around 6% relative to neighborhoods with few. This is larger than the effect from immigration, but still relatively small.

Are Increased House Prices Bad?

It is worth taking a moment to pause on the distributional effects of increased house prices. As a renter in a major city, clearly increased housing prices are bad for me.14 Rising house prices are bad for anyone who does not yet own a house and desires to do so in the future.

But in many countries,15 owner-occupiers are the norm, and housing is a significant proportion of wealth. One could make an argument that increasing house prices are good.16 Indeed, one could make the argument that rising house prices benefit homeowners (particularly likely to be natives) and hurt recent arrivals (more likely to be immigrants). Home-owning residents of Odessa, Texas haven’t been hurt by increasing house prices; indeed, they’ve gained wealth specifically due to immigrants.17

Does this outweigh the negative impacts on renters? I don’t think so, because excessive planning restrictions likely reduce aggregate economic growth. But if you are not generally a YIMBY / pro-additional housing supply, perhaps you should be thanking immigrants for increasing the wealth of your native-born countrymen.

• has reopened pitches! Pitch us all your development hot takes.

And now:

• Samuel Hughes argues in that you can use zoning to lock down your enemies and prevent war (and indeed, Tokugawa Japan did).

• There’s a paper suggesting you should cool your data centers with living spiders.

• The UK has a tax on a financial instrument that no longer exists.

• 19% of mortgages in Poland are denominated in… Swiss francs? (ht Karol Karpinski)

• OK, I lied, this is a development story. A booming drug market in Mexico led more people to study chemistry in university. Breaking Bad is causal.

• Until WWII, the majority of renters in NYC all moved at 9 AM on May 1.

• Dan Sullivan has filed to run against Dan Sullivan in the Alaska Senate race. Note that neither of these Dans Sullivan is the Dan Sullivan who is the mayor of Anchorage.

• This week in ,1 writes on emigration - and how it can be used to support growth in sending countries.

  • I wasn’t going to cover migration in the first issue of , so it didn’t become just Lauren’s Pet Topics, but is one of my development heroes, so of course I published this.

• There’s a new website that autotranslates Chinese preprints into English, to increase Chinese-Western scientific collaboration.

• The population of Africans living in refugee camps has tripled in the last 15 years.

• has a list of pieces they’d like to commission.

• is serializing his new book on biology. Self-recommending.

• Chloe East and Elizabeth Cox find that ICE activities this year have… hurt US-born workers.

• GiveWell is hiring a senior livelihoods researcher.

• reminds us of the variation in incomes in developing countries. It would take Malawi 21 years of 7% growth to reach the GDP/capita of Kenya.

• The war in Iran has caused a Diet Coke shortage in India. I know of several people that would simply Cease To Function without Diet Coke; thoughts and prayers to their Indian equivalents.

argues that more young people (from rich countries) who care about development should consider starting a business rather than working in the Aid Industrial Complex.

Daniel speaks from experience - he founded Wasoko, Africa’s largest B2B e-commerce company when he was 19. His company grew to employ 2,000 people and serve 100,000 businesses across the continent.

Read the piece here, and subscribe here.

We’ve just posted our first story. It is by Paul Niehaus, on cash transfers, evidence, and what empowerment really means.

It also contains the line “In 2005 my co-founders and I finagled invitations to a kickoff event for the International Year of Microcredit at the United Nations. The mixed drinks were, as I recall, stronger than the evidence.”

Below, I discuss what we’ve learned in the past year about topics previously covered in this living lit review.

US Immigration Updates

Updating Undocumented People In The United States

2025 and 2026 have seen increased immigration enforcement, with many more ICE arrests and interior deportations increasing 4.6x. This has resulted in a significant slowdown of migration to the United States, including of legal migration. Brookings estimates that for the first time in at least half a century, more people left the United States in 2025 than entered it.

Perhaps unsurprisingly, this does not look great for the American economy. The Dallas Fed estimates that declining immigration will knock a point off GDP growth, and the Penn Wharton Budget Model has produced a model of the effects of deporting 10% of undocumented people per year.

Over four years, Penn estimates this will increase the deficit by $350 billion and decrease overall GDP. The effects on GDP/capita are more ambiguous; there is a short-term increase (particularly for the remaining undocumented workers who manage not to be deported), followed by a longer-term decline.

They find that most of the high-skill population will net lose out under mass deportations. This includes both authorized immigrants and the native-born. Older high-skill workers are the exception, as their working lifetimes will not include the longer-term decline. The picture for low-skill authorized immigrants is more mixed, with most having net gains (particularly older workers or those with high wages), but younger workers ending up worse off.

Updating H-1B Visas and the American Economy

In September 2025, the US introduced a new $100,000 fee on H-1B visas. I wrote at the time that I did not think this was a good idea.

This fee was the brainchild of George Borjas, who served in the Trump administration. In a 2026 paper, he argued that H-1B visa holders earn 16% less than similarly credentialed Americans, suggesting firms might be willing to pay an additional fee to continue hiring these low-wage workers. He calculated the revenue-maximizing fee would be between $118,000 and $264,000, and would have no impact on the number of H-1B visas issued.

The Economic Innovation Group argues that Borjas’ paper has data errors, and the actual wage gap is much smaller, at around 5%. In this case, a $100,000 fee would be far more than an employer would be willing to pay for a H-1B visa.

Michael Clemens also argues that Borjas has made data errors, but he finds that H-1B visa recipients actually command a small wage premium relative to the native-born. In this case, it is extremely unlikely that an employer would wish to pay an additional fee.

I have not gone through the data in these papers in enough detail to litigate who is correct, though Ozimek and Clemens’ point that Borjas uses 2020-2023 salary data for immigrants and only 2023 for the native-born seems hard to argue with. Revealed preference also seems to suggest that the revenue-maximizing fee is considerably less than $100,000, because overall fees collected on H-1B visa applications have decreased substantially since the fee was introduced.

Brain Drain and Brain Gain Updates

Updating What happens when you send Ugandan students to Germany?

Malengo is a program that provides a loan for Ugandan students to attend university in Germany. The expectation is that many students will then get jobs in Germany, and earn perhaps 20-50x what they would in Uganda. Students that stay will also pay back some or all of that loan.

Last year, they updated their model. They now estimate that the program produces 28x the returns of a cash transfer program. The positive update largely comes from moving consumption gains forward in time - even while attending university, consumption is some 7x what it would be in Uganda.

That being said, I think the cost-effectiveness of Malengo remains fairly uncertain until their first couple of cohorts of students graduate. Since the goal is to increase income largely through students choosing to stay in Germany after graduation, we still need to know what their labor market placements will look like.

Updating Migration of Doctors and Nurses

I have previously posited that there are significantly diminishing returns to additional medical personnel in places that already have a reasonable supply of medical personnel. I still think this is true, but I was surprised to see that the effect of adding or subtracting physicians is still detectable even in high income countries.

For instance, Dodini, Lundborg, Løken and Willén 2025 estimates that losing a doctor in Sweden results in 0.21 deaths per year.1 Grabowski, Gruber and McGarry 2026 estimates that each additional immigrant health worker in the US prevents 0.07 deaths per year,2 though this may be higher than in other contexts because immigrant health workers appear to be of higher quality than US-trained physicians.3

There does not appear to be a saturation level at which point additional physicians are not helpful. This would seem to suggest that expanding the supply of health workers is important in almost all contexts.

This would seem to make the general equilibrium result found in Abarcar and Theoharides 2024 extremely important. Abarcar and Theoharides shows that you can end up with a net increase in the supply of health workers even in a country with significant emigration if the following two conditions are met:

1. High wages outside the country draw people into health professions.

2. Supply of health professionals is allowed to expand to meet demand.

Some of the newly-qualified health professionals will migrate, but not all will.

If supply is not allowed to expand, you will probably have a net brain drain effect.4 So: expanding supply is very important; without it, migration can be net negative.

UK Immigration

Updating Are recent immigrants a “ticking time bomb” for British public finances? / UK Immigration and Public Services

We have a couple new reports from the Migration Advisory Committee, focusing primarily on the 2022-2023 cohort of immigrant entries. (This is the peak of the “Boriswave”.)

This has an interesting analysis on the fiscal impacts of each visa type, with a deeper dive into care worker fiscal impacts here.

The average skilled worker main applicant will pay £689,000 more in taxes than they receive in benefits (in net present value terms). The average health and care worker main applicant will pay £54,000 more in taxes than they receive in benefits.5 Care workers are net negative (-£36,000) while higher-skilled professionals are net positive.

Dependents are somewhat less fiscally positive; the adult dependents of skilled workers (e.g. spouses) are just about break-even, while the adult dependents of health and care workers cost £67,000 more than they contribute in taxes.

People who enter on partner visas are the most fiscally negative, at NPV -£109,000. This is consistent with the low labor force participation rate for this group (<50%). It’s not overly surprising that a group that is only 50% in work is fiscally negative.6

However, when considering the types of visas that the MAC analyzes, the cohort as a whole (skilled workers, their dependents, health and care workers, partners) is highly fiscally positive. They estimate that the 2022-2023 cohort of these visas will contribute £44.4bn more in taxes than they receive in benefits.

This is not the overall fiscal effect of the 2022-2023 immigrants, though, as we don’t know the overall fiscal cost of those entering on humanitarian visas.7 2022 was the peak of the influx from Ukraine; about 40% of immigrants that year entered on a humanitarian visa.

Given how positive those who entered on work visas are, though, these entrants can be significantly fiscally negative and the whole cohort will be positive. All other visa entrants can have a fiscal impact of -£122,781 (that is, more negative than any other visa type) and the whole cohort would still be fiscally neutral.8

And to close: a tweet from Ava I’ve been thinking about:

my problem w the popular conception of agency is that most people are trapped not by an inability to act but rather by an inability to conceive of a wider range of things to use their free will on. their actions are constrained by the aperture of their desire

May the aperture of your desire be wide enough for you to use your free will to its fullest extent.