The Department of Homeland Security (DHS) has noted that the mass deportation of undocumented migrants during the Trump administration has been correlated with lower rental rates in various Sun Belt cities such as Austin, Nashville, and Phoenix. In a post on social media platform X, DHS claimed that cooperation with Immigration and Customs Enforcement (ICE) is influencing rent reduction. Texas was highlighted for its significant involvement, accounting for a quarter of ICE arrests in July and experiencing notable rent declines across major cities, including San Antonio, Austin, Dallas, and Houston.
DHS mentioned unspecified “research” indicating that illegal-worker inflows have historically driven up rents and home prices, which the department believes have been reversed due to strict immigration enforcement. However, critics have questioned the methodology and source of the rent figures cited in the DHS post, as these numbers do not align with several known rental indexes.
Moreover, the conclusions of a working paper by economists Daniel J. Wilson and Xiaoqing Zhou published earlier in the year suggested a surge in illegal immigration under President Joe Biden escalated U.S. housing costs. Despite criticisms from other housing experts regarding the paper’s methodology, DHS asserts mass deportations can contribute to a lower cost of living.
The metropolitan areas noted by DHS have been experiencing a price correction due to a wave of new apartment construction. For instance, Texas has seen extensive development in response to domestic migration. Austin, Dallas, and Houston feature prominently in new apartment construction rankings, with thousands of units since the pandemic.
Demand for rentals has significantly decreased, influenced by higher prices and return-to-office mandates on the West and Northeast coasts. This increased competition amidst a lower renter pool has led to substantial rent decreases across these metros. According to Zillow, several cities have seen various drops in average rent prices over the past year.
DHS has not provided specific data on renter exits due to immigration enforcement or how much of the rent declines can be directly credited to deportations versus shifts in housing supply and demand. It’s important to note the phenomenon isn’t isolated to Sun Belt cities; places like Las Vegas and San Diego have also experienced comparable rent declines.
Experts remain skeptical about whether mass deportations can effectively lower housing costs. While deportations might free up some housing, the construction sector heavily depends on undocumented workers. The American Business Immigration Coalition indicates that a significant portion of construction workers in the U.S. are immigrants, suggesting deportations could exacerbate labor shortages and push building costs higher.
The National Association of Home Builders (NAHB) concurs that fewer available workers can stall construction timelines, increase costs, and potentially lead to higher home prices. A Reuters investigation highlighted the impact of labor shortages on a project delay after a local ICE raid.
Overall, while DHS maintains that mass deportations influence rent prices, the situation is multifaceted, involving both supply and demand dynamics in housing.