Mayor Zohran Mamdani won New York City’s mayoral race on the issue of affordability — an issue Democrats have spent years insisting they alone can solve. But the party’s policies helped create the very conditions that pushed housing costs higher, according to a new working paper from the Federal Reserve Bank of Dallas.
According to the research, America’s rising housing costs were driven in part by a massive wave of unauthorized immigration during the Biden administration from 2021 to 2024.
The surge, which the paper estimates at around 7 million entrants during that period, “acted simultaneously as a demand shock to local housing markets, boosting rents given relatively inelastic short-run housing supply.
While the authors note this is part of a preliminary draft and does not necessarily reflect the views of the Federal Reserve System, their findings suggest the influx is responsible for 30% of home price growth and 20% of rent increases.
In other words: When there is more demand but supply stays constant, costs go up.
While that may sound obvious to anyone with even the most tenuous grasp of basic economics, it is an important data point — albeit one that can get you labeled as xenophobic and anti-immigrant.
Back in 2024, when Donald Trump told a rally that, “Immigration is driving housing costs through the roof,” and JD Vance noted, “You have got housing that is totally unaffordable because we brought in millions of illegal immigrants to compete with Americans for scarce homes,” they were mercilessly fact-checked and accused of scapegoating immigrants.
The Washington Post reported in October 2024, “Vance says immigrants caused a housing shortage. Economists disagree.” The New York Times reported the same month that Trump and Vance were “blaming immigrants for the housing crisis” but “most economists disagree.”
Democrats have refused to acknowledge reality and instead pushed policies that make the problem worse: more immigration (increasing demand) and more red tape (limiting supply).
Here in New York City, where Mamdani won his bid for mayor in large part because of a promise to make NYC more affordable, his agenda undermines that vow: He has embraced New York’s sanctuary-city status, pushed for hundreds of millions more dollars in immigrant legal defense funding and vowed that the city will “always welcome immigrants.”
But his solutions, like freezing the rent doesn’t actually address the housing affordability problem for most New Yorkers.
Similarly, under Biden, the Federal Housing Finance Agency expanded eligibility for non-permanent residents to get inexpensive mortgages at a time when more Americans were struggling. HUD expanded access to federally backed mortgages to non-permanent residents, including DACA recipients and immigrants with H-1Bs and green cards. Those programs allowed buyers with lower credit scores and smaller down payments (as little as 3.5% down) access to mortgages.
All of this is a crushing reality for young Americans in particular. Among those in Gen Z, 67% are struggling with housing costs and 84% are delaying marriage, children or other major life milestones because of it.
It’s no coincidence that a growing percentage of that generation is toying with socialism (62% have a favorable view).
While I’m sympathetic to their plight, the very policies they’re embracing will only exacerbate the problem. Democrats have learned how to talk about the affordability crisis, but they don’t have solutions actually grounded in economics.
