Unintended consequences often make the difference between good policies and bad ones. Of all the harmful ideas governments have enacted throughout human history, very few were ever intended to cause harm. But good intentions do not guarantee that policymakers understand human nature, the incentives, or the economic conditions that their policies create. Good policies avoid bad side effects — either unintentionally or by design — or create good ones; bad policies are those which, however well-intentioned, inflict untold human suffering that they never intended.

Few Americans, besides those with partisan obligations to a losing cause, would contest the claim that the Biden administration’s experiment in open borders was an unqualified disaster. In less than four years, America welcomed in somewhere around eight million immigrants over the normal (legal) amount, with effectively no vetting. Alongside families fleeing economic hardship and those with legitimate asylum claims, the Biden administration left the door open for criminals, gangs, and foreign operatives, without even a glance at the terrorist watch list. Needless to say, chaos and crime reigned.

Granted, President Biden acted upon what he believed to be good intentions. In general, the open borders policy put into practice his belief that there should be no nations or borders, only one global community. In particular, the open border policy advantaged underprivileged, predominantly non-white immigrants over privileged, predominantly white Americans, thereby implementing a misguided, Marxist conception of social justice based on skin color and economic status.

But those “good” intentions did not prevent the ill effects of open borders. So, in 2024, the American voters elected President Donald Trump to fix the problem (for a second time). The second Trump administration has addressed the illegal immigration crisis wrought by open borders in many ways — most of them dramatic — and has already removed millions of illegal immigrants less than halfway into his term.

Housing Costs

Of interest here is the Trump administration’s underreported attention to one particular ill effect of open borders: housing costs. Eight million people entering the country need places to live. But the Biden administration did nothing to boost the housing supply to compensate for this increase in housing demand. The obvious result was an increase in the price of housing.

This much was always obvious to anyone who took half a second to think about the problem — which no one in the Biden administration ever seemed to do.

The Trump administration has pointed this fact out since last year. “When we talk about housing and why costs are so high, we don’t talk enough about demand, and one of the drivers of increased housing demand is that we’ve got a lot of people over the last four years who have come into the country illegally,” argued Vice President J.D. Vance. Just this week, Housing and Urban Development (HUD) Secretary Scott Turner made the same point again, declaring, “Here in America, we prioritize American people and American people only. American houses are for American people.”

But the argument was only so strong while it was just that, an argument. Most American voters are not experts in economic theory, and they prefer to believe politicians who can provide statistics to reinforce their claims.

Putting Numbers to the Argument

That time has now come. What before was an obvious but unmeasured phenomenon has now been verified, thanks to a pair of number crunchers at the Federal Reserve Bank of Dallas. Their paper “provides the first systematic empirical assessment” of the effect of illegal immigration on the housing market.

According to a working paper from Daniel Wilson and Xiaoqing Zhou released this March, “unauthorized immigrant worker flows” (UIWF) “can explain approximately 30% of the total increase in house prices and 20% of the total increase in rents” for the average commuting zone (CZ) “from early 2021 to early 2024.” (CZs divide America up into “598 distinct labor markets,” or slightly smaller on average than the nation’s 435 congressional districts.)

More precisely, their data showed that “an increase in UIWF equal to 1% of initial employment raises local house prices by 2.2% and market rents by 1.4%.” This presents the data in a usable format; simply multiply the 1% increase in UIWF by the actual rate, and the model should predict the actual effect on local house prices and rents.

The researchers explained, “The weighted mean of UIWF as a share of initial employment during the boom period was 3.1%.” When multiplied, this “yields an implied effect of UIWF on house prices of 6.6% and on rents of 4.3%.”

They then compared this number to the total change in housing prices. “The total weighted-mean increases in house prices and rents over this period were 22.4% and 22.6%, respectively.” This then becomes roughly 30% of the house price increases and 20% of the rental increase.

Keep in mind that these percentage increases in house prices are not the total increase, but merely the proportion of the increase directly tied to “unauthorized immigrant worker flows,” according to the data. This is simply the jump in housing prices caused by many people who should not be in the country competing with native residents for the stock of housing units. The researchers found this accounted for only a third of the total increase in home prices, which were influenced by other factors such as the post-COVID preference among Americans for more living space, Bidenflation, and rising interest rates.

Illustration: Springfield, Ohio

If this still seems confusing, it may be helpful to apply the numbers to an actual community. Take, for example, the highly publicized case of Springfield, Ohio. The 2020 census registered the city’s population at approximately 58,000, whereas Clark County as a whole had 138,000 inhabitants. In the ensuing years, the Biden administration relocated “between 12,000-15,000 Haitians” to the town.

These figures measure the total population, whereas the model produced by Federal Reserve researchers measured employment data. However, let’s assume, for purposes of illustration, that the two different measures are proportionally equivalent (in other words, that native Springfielders and Haitian transplants had jobs in roughly the same proportion).

According to the numbers cited by Clark County itself, the influx of Haitian immigrants amounted to between 20.7% and 25.9% of Springfield’s population at the 2020 census, or between 8.7% and 10.9% of the entire county. Applying the researcher’s rate for house prices to immigrants (2.2% per 1%), this would cause house prices in Springfield to increase between 45.5% and 56.9%. Or, if measured against the entire county, house prices would rise between 19.1% and 23.9%.

It should also be noted that these calculations are themselves a “back-of-the envelope” illustration, not hard data, nor even an example taken from the working paper. The researchers measured housing prices by “commuting zone,” a geographical unit of analysis much larger than Springfield, Ohio or Clark County, Ohio. These government-identified “commuting zones” are a valid unit of analysis because, if housing costs in Springfield spiked so dramatically, a rational homebuyer could simply purchase property in the next county over for much cheaper in exchange for a slightly longer commute.

However, it remains true that Springfield suffered acutely from a phenomenon that occurred across America, and this illustration provides color to that. If Springfield received a relatively larger proportion of immigrants, compared to its small population, then those immigrants would have caused house prices to increase by a larger amount.

Answering an Objection

At this point, some readers may have a reasonable objection. Statistics can be made to say just about anything. Studies vary wildly in quality. And the Trump administration has not been shy about using the levers of government it controls to bolster its case with varying degrees of legitimacy. How can we be sure that this study provides legitimate support for an argument the Trump administration has made since last year? Could it not be a ruse, plant, or some other type of scheme to bolster President Trump’s deportation agenda?

The objection is reasonable because a seed of doubt naturally remains in our minds when asked to accept something we cannot assess for ourselves. Most Americans do not have the specialized training to assess the validity of a working paper on economic statistics (or the discipline of econometrics).

In this case, however, the working paper provides enough information to allay any fears Americans may harbor on that score. In addition to measuring the effect of illegal immigration on housing prices, the paper also measured its effect on local employment and average weekly wages.

First, it assessed “that an increase in UIWF equal to 1% of initial employment increases local employment by 0.96% — a nearly one-for-one effect. The effect is highly statistically significant.” Essentially, their data showed that any increase in a local workforce from illegal immigration also increased the number of jobs by effectively the same amount. In plain English, illegal immigrants were not taking jobs from Americans but working in new jobs, according to these data.

Second, the paper did not find a statistically significant value for a change in average weekly wages, leading the researchers to discuss “countervailing effects could offset each other to leave average weekly wages unchanged.”

On both points, the paper undermined the administration’s preferred talking points that illegal immigrants are taking jobs from Americans and driving down wages.

One could quibble with these conclusions. One could call into question whether these data captured the full picture. But what these points show is that the researchers handled their data responsibly. They drew honest conclusions based on the data, instead of attaining a predetermined partisan outcome. Some points might favor the administration, while others do not. That only heightens the argument for the researchers’ independence.

Conclusions

These results lead us to draw two conclusions, one more specific and one more general in nature.

The first conclusion is almost too obvious to state. Massive amounts of illegal immigration affect the U.S. housing market and increase prices by driving up demand. If a future administration wanted to encourage illegal immigration (heaven forbid that it would, but if it does), it must also plan to increase the housing supply by an equivalent amount.

The Biden administration released border-crossers into the country whenever they ran out of holding space for new arrivals (which was almost immediately). If they did not have enough room to house all the immigrants at the border, how did they expect the rest of America to have enough room to house them either?

The second conclusion undercuts the Biden administration’s ideological reasons for wanting an open border. The effects on housing illustrate that there are reasons for immigration laws that have nothing to do with discrimination against foreign nationals based on skin color, ethnicity, or national origin.

One reason to oppose unchecked migration is simply that we don’t have enough space to accommodate everybody at once. Immigration laws provide ways for foreigners to arrive in America in an orderly, restrained fashion that does not outrun the growth in the housing supply. On this point, it does not matter whether the foreigners are coming from Mexico, Haiti, China, Serbia, or Germany. It is simply a matter of counting heads and beds and making sure the equation balances.

This principle can be distilled down further still: immigration laws are not racist. They are orderly.