Federal Reserve Bank of Dallas white paper shows illegal immigration had an impact on employment, housing prices

A recent white paper by the Federal Reserve Bank of Dallas concludes that the record number of illegal immigrants during the Biden administration had a big impact on housing prices, rents, and employment growth.

The Federal Reserve Bank says its working papers are preliminary drafts and that the views expressed are those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of Dallas or the Federal Reserve System.

The working paper called "Impacts of Unauthorized Immigration on U.S. Labor and Housing Markets" was released in March.

The report said the large increase in unauthorized immigration into the U.S. from early 2021 to early 2024 added roughly "seven million people to the U.S. population, nearly double that of legal immigration." Authors based those statistics from the Congressional Budget Office. The white paper said illegal immigration is responsible for "roughly 30% of total employment growth over March 2021 to March 2024." 

It also found that "about 30 percent of the total growth in house prices" and "20 percent of the total growth in rents" is to blame on the large increases in illegal immigration. The authors of the white paper concluded, "We find that unauthorized immigrant worker flows increased local employment approximately one-for-one, without generating significant declines in local wages during the early 2021 to early 2024 boom period. At the same time, these inflows raised local house prices and rents, with little evidence of increases in housing supply. Thus, while the influx of these immigrant workers acted as a positive supply shock to local labor markets, it acted simultaneously as a demand shock to local housing markets, boosting rents given relatively inelastic short-run housing supply." The U.S. was also dealing with COVID-19 during much of this time period, which economists at the time said had an impact on employment and housing. 

U.S. Representative Beth Van Duyne, R-Irving, posted the report on her X account and spoke with CBS News Texas about it. "We've actually been saying this for a number of months now," said Van Duyne. "I don't think people sometimes understand the ramifications of having so many folks enter your country illegally in such a short period of time and the financial disaster that it causes. And I want to make sure that people you know heard those numbers, it caused an increase in housing [prices] by 30%."

"It caused an increase in rental rates by 20%, which, you know, when President Trump was running for this position for a second time, he was very clear to say we have got to focus on deportations," Van Duyne continued. "There's a reason why. Look at what's happened to the housing market. And as a direct result, by the way, what you're seeing now is prices coming down. You've had over 3.5 million people either self-deport or have been deported, you know, through this administration. And it's having an immediate reaction in the market on housing. We have to continue that."

State Representative Ramon Romero/D-Fort Worth, who also serves as the Chairman of the Mexican American Legislative Caucus, the oldest and largest Latino legislative caucus in the U.S., issued a statement. "People like Beth Van Duyne are using this white paper as an excuse to justify this administration's murderous immigration crackdown that is terrorizing communities all across our nation. Americans aren't buying it. A year and a half into President Trump's immigration crackdown, Texans still can't afford a home because we haven't built enough housing, construction costs remain high, interest rates continue to price families out of the market, and we're removing the very workforce that helps build the homes Texas needs. You can't deport your way out of a housing shortage. The facts remain, costs went up post COVID and somehow despite those high costs people felt confident enough to buy. Biden brought inflation down and people got back to work. It normalized costs and now over the last year and a half that sentiment is being lost. Homes that are for sale are sitting way longer and Americans are losing $$ on what has always been our most important investment." 

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