The Trump administration’s favors to big business threaten America’s environment. But its immigration crackdown has sparked welcome debates about the costs and benefits of continued growth, including its impact on affordable housing.
by Henry Barbaro and Philip Cafaro
Last month, U.S. Vice President J.D. Vance argued that a surge in illegal immigration has pushed housing prices beyond reach for many Americans. An average of 2.4 million immigrants per year arrived in the U.S. between 2021 and 2024 — and they all needed somewhere to live. Vance noted that inadequate new home and rental construction also contributed to the problem.
“Under the Biden administration,” Vance said, “the price of a new home literally doubled in four years.” This is true if you combine the 33% increase in retail home prices during this period with a large rise in mortgage rates, doubling the ultimate cost for a new home.
Politicians across the political spectrum are talking about America’s “housing crisis.” Home prices and rents have surged beyond what many households can afford. Numerous factors appear to have played a role in driving up housing prices, including high interest rates and a focus on building luxury homes, the most lucrative part of the industry.
Still, housing prices are ultimately a matter of supply and demand, and demand is partly a matter of sheer human numbers, which continue to increase in the U.S. This population growth comes primarily from immigration, since American fertility rates have been well below replacement level since the 1970s.
Demand Outpacing Supply
While business journalists and housing experts focus almost exclusively on supply, the demand side of the equation is equally important in determining housing prices. When the number of families grows faster than the number of housing units, competition for existing housing increases and prices rise. This has happened in many parts of the United States over the past four years — and in Canada, Australia, and other developed countries where high immigration has driven rapid population growth.
The U.S. experienced a notable immigration surge under the Biden administration, with the foreign-born population reaching a record 53.3 million, the highest level ever, both in absolute numbers and as a percentage of the total population (currently 344 million). Millions of new arrivals required housing. Many located in the same metro areas where shortages were already most acute. This added demand tightened vacancies and drove rents up, while pushing actual homeownership even further out of reach for younger and lower-income families.
The Density Dilemma in Older Cities
Some argue that the solution to all this is simple: build more housing. But increasing supply comes with unavoidable trade-offs, depending on where construction occurs.
In older, land-constrained U.S. cities — such as Boston, Philadelphia, or New York — there is little open land left. Additional housing means greater density: taller buildings, smaller housing lots, fewer backyard spaces and shade trees, and infrastructure stretched beyond its capacity.
Residents lose sunlight, green space and neighborhood character. Urban life grows louder, more crowded and more stressful. Taxes go up to accommodate more growth.
Quality of life diminishes in denser cities. While more apartments implies more affordable housing in theory, the reality is “shrinkflation” where you get incrementally less for the same price. Density tends to feed on itself, increasing demand even more. Housing prices almost never decline as urban densities increase; instead, they go up, along with the number of people chasing housing vacancies.
The Sprawl Problem in Newer Metros
In newer, fast-growing U.S. metropolitan areas — Phoenix, Atlanta, Dallas, Las Vegas — a different problem emerges. There is land, but expanding housing produces sprawl. Subdivisions creep across deserts, farmland and forests. Traffic worsens and commute times lengthen. Natural ecosystems disappear under concrete; the remnants get smaller and disconnected from one another.
New housing developments create demand for new highways, commercial distribution centers and schools, new sewer pipes and power lines. Taxpayers carry the costs of building all this new infrastructure for decades. Communities gain homes but lose open space, while wildlife loses essential habitat. Metro area populations go up, while their residents’ quality of life declines. Urbanisation means that more people live further away from natural areas, alienating them from wild nature.
The Missing Ingredient: Demand Management
Whether sprawling or dense, in both cases, more housing solves one problem only by creating others. The missing ingredient in America’s housing debate is demand management. If the U.S. continues adding millions more residents each year, no amount of building will restore housing affordability. But by moderating immigration-driven population growth, the country can relieve pressure on housing markets without sacrificing the livability of existing communities or paving over open spaces and driving wildlife populations extinct.
Aligning immigration policy with housing capacity is necessary to maintain Americans’ quality of life — and to share the landscape fairly with other species. Going forward, reducing immigration will be key to affordability, sustainability and livability in U.S. communities.
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