Deportations and immigration enforcement remain central to the Trump administration’s agenda, and were among the popular policies that helped return the president to the White House in 2024. But supporting a policy does not require treating it as a cure-all.
Late last week, the Federal Reserve Bank of San Francisco published a study examining the housing effects of immigration between 2021 and 2024, during the Biden administration, when Census Bureau data showed a net population increase of 7 million from immigration. The study estimated that illegal immigration accounted for 30 percent of house-price growth and 20 percent of rent growth in the average metropolitan area over that period, with smaller shares in the median metro area. It also found a correlation between current immigration enforcement and lower rents.
But before jumping from correlation to causation, we need to consider the many other factors that influence rents. Blaming high rents solely on immigration risks leaving those underlying problems unresolved.
A San Francisco Federal Reserve paper recently found that the influx of unauthorized immigrants under the radical left accounted for 20% of rent growth during the 2021-2024 Bidenflation surge. By contrast, President Trump’s immigration enforcement policies are producing the opposite effect. State-level data show a strong association between increased immigration enforcement and more affordable rents. @POTUS will always put American families FIRST.
— Treasury Secretary Scott Bessent (@SecScottBessent) October 30, 2026
First, the Federal Reserve Bank of San Francisco establishes correlation, not causation. In other words, the finding is that states with stronger immigration enforcement have lower rents, not necessarily that enforcement caused those rents to be lower. There are other factors that could explain that relationship, particularly that states with stronger immigration enforcement tend to be Republican-led. Those states also tend to have stronger economies, build more housing, and have a lower cost of living. Those factors, combined with their cooperation with Immigration and Customs Enforcement, could help explain the strong correlation.
Second, reducing demand can ease pressure on prices, but it does not substitute for addressing the housing shortage. For decades, too much housing policy has focused on demand rather than removing the regulatory and zoning barriers that restrict supply. Estimates put the national housing shortfall at between 3.7 million and 4.7 million homes. By one estimate from the White House Council of Economic Advisers, just maintaining 2008 homebuilding levels through 2026 would have left the United States with roughly 10 million more homes. A substantially larger supply that would have eased today’s affordability pressures.
And still, people continue to focus almost exclusively on demand. The DSA wants to freeze rents in place, effectively lowering them relative to what they otherwise would be and increasing demand. Congress has subsidized rent several times over the last several years, and now Republicans seem to think that deporting illegal immigrants, and thereby lowering demand, will solve the problem.
But lowering demand, by itself, is not a lasting solution. Population growth will eventually catch up with the available housing supply in a matter of years, leaving us in exactly the same position. What very few people seem to be considering is that while decreasing demand can mean lower prices, it also means less rental income, and potentially lower property values. The lower the expected income, the harder it becomes to maintain existing properties or justify investing in new housing projects, the very thing we need to address the problem over the long term.
If this is true (forget causal identification here for a second), the falling prices are due to falling demand. Falling demand means less rental and housing income. That is not a good thing! Look, I want lower rents too. But you dont get a richer USA by depressing demand. You get it by increasing supply! And that means land use deregulation, construction deregulation, greater geographic mobility!
— Vincent Geloso (@VincentGeloso) October 30, 2026
Increasing supply, meanwhile, does not face the same problems as decreasing demand. Making housing cheaper and easier to build allows lower rents to remain profitable while creating more homes, jobs, and opportunities to build wealth, the kind of economic expansion conservatives credit capitalism for. Reducing demand, meanwhile, through deportation for example, lowers prices by leaving fewer people competing for existing housing. That is closer to the fixed-pie thinking conservatives criticize in left-wing progressives than to their own argument for growth.
Relying on deportation to make housing affordable is like trying to make groceries cheaper by forcing there to be fewer shoppers instead of putting more food on the shelves or building another grocery store. Yes, illegal immigrants have no right to be here. But removing people who are here illegally addresses an immigration problem; it does not fix the barriers behind America’s housing shortage.
Deportations are good. They were a major part of what put President Trump in office, and he has delivered and continues to do so. But do not confuse a sound immigration policy with a complete economic policy. We could push prices down by removing more and more demand, hell, by that logic, we should start deporting everyone. But shrinking a market is not capitalism, and it is not a free-market solution. Conservatives should be arguing for growth, not dressing up the same fixed-pie economics they criticize on the left as conservative policy. That thinking must come to an end.