Are illegal immigration and deportations truly driving forces behind housing supply, demand, and affordability issues, or are they being overstated by the media and both sides of the political divide? Or put another way, is immigration being used as a scapegoat for deeper systemic issues within the multi housing industry?
Immigration – a political football
Despite intense political debate over immigration enforcement, deportation policies have remained largely unchanged across the past three presidential administrations. Deportation numbers have also remained relatively consistent, showing no clear link between enforcement levels and housing trends.
Approximately 3 million deportations were carried out under Obama, earning him the moniker “Deporter-in-Chief.”
Trump’s administration oversaw 1.5 million deportations during its first term.
Biden has overseen approximately 1.1 million deportations since the beginning of 2021, according to the Migration Policy Institute. In 2024 alone, U.S. Immigration and Customs Enforcement deported over 271,000 unauthorized immigrants, marking the highest annual figure since 2014, according to CNN.
So, the real challenges lie elsewhere: financing, zoning, and a shrinking skilled labor pool, but these headwinds to addressing the affordable rental housing crisis are rarely being addressed in the broader immigration debate.
It’s also why immigration is not a focus in apartment REIT earnings calls or high on the radar of industry experts like RealPage Analytics.
Conflicting Arguments on Immigration and Rents
Liberal think tanks like the Urban Institute and the Economic Policy Institute have expressed concerns that immigration enforcement could reduce the construction workforce, making it harder to meet rental housing demand and potentially driving up rents. The logic behind this claim is that fewer workers in construction could lead to slower development, keeping supply constrained.
At the same time, others like the Federation for American Immigration Reform argue that increased immigration—especially illegal immigration—drives up rents by increasing demand for rental housing in markets already facing supply shortages.
These two arguments seem contradictory—one side claims deportations increase rents by reducing the construction workforce, while the other says illegal immigration increases rents by driving up demand.
Missed by both sides is that housing supply, not just labor or demand, is the real driver of affordability.
Balancing act
The current surge of illegal immigration is unprecedented. The House Judiciary reported in October 2024 that 5.6 million illegals had been released into the country since January 2021. Over the same period, Census Bureau data shows that the number of immigrant-headed households rose by 2.4 million, with perhaps 1.4 million of the increase due to illegal immigration.
Eric Finnigan, VP of demographics research at John Burns Research and Consulting, noted that this recent immigration surge will have a long-term effect on the rental housing market.
“Without better housing incentives and supply expansion, immigration-driven demand will continue to strain affordability,” said Steven A. Camarota, director of the Research
Center for Immigration Studies, during a U.S. House Oversight and Accountability Committee hearing on September 25, 2024.
Housing supply isn’t keeping up with population growth. Rents rise when there aren’t enough homes being built to meet demand. The recent apartment construction tsunami over the past few years has put downward pressure on rents, even though demand has remained high.
These insights highlight the urgent need for policies that balance the demand from incoming populations with strategies to expand housing supply for all residents.
Labor, Skills, and Policy Solutions
While the availability of skilled labor is an ongoing concern in construction, attributing housing slowdowns to deportations is a stretch. From 2020 to 2024, deportations remained high, yet apartment construction surged to a 50-year high, driven by demand and accessible financing. See chart below:
As interest rates rose and financing tightened, new starts slowed—but not due to labor shortages. If mass deportations directly impacted development, the industry would have seen signs of it earlier.
This raises a larger issue: a stable labor force is not just about numbers—it’s about skills.
“I don’t talk about worker shortages so much because I don’t think it’s really about a worker shortage. It’s about a skills shortage, a skilled worker shortage,” said Anirban Basu, chief economist for Associated Builders and Contractors, emphasizing that while there may be an influx of undocumented workers, many lack the specialized skills required by the U.S. construction industry.
These skills are also essential to meet financing and insurance requirements. Hiring unlicensed contractors without the necessary skills can result in subpar workmanship and project abandonment. And, companies caught knowingly employing undocumented workers can face federal fines of up to $10,000 per violation, according to U.S. Immigration Services.
An Aging Workforce & the Need for Trades
Another major factor affecting housing availability beyond immigration and policy challenges is America’s aging workforce.
• Fewer young professionals are entering the trades, leading to a skills gap that impacts construction timelines and costs.
• Older workers are retiring, further shrinking the labor pool at a time when housing demand remains high.
The National Association of Home Builders acknowledges that expanding training programs and promoting careers in the skilled trades is essential to stabilizing the workforce and ensuring long-term housing development capacity. Housing solutions should focus on supply, incentives, and workforce stability rather than political debates that shift focus away from real policy solutions.
Bottom line: The real solution isn’t found in immigration debates alone—it’s in a long-term strategy to expand rental housing supply, train more skilled workers, and enact policies that ensure immigration levels align with market capacity.
