The One Thing MAGA Nativists Get Right

A recent study from the Dallas Federal Reserve has shed new light on the economic effects of large-scale migration. While some have hailed it as proof that immigrants drain America’s resources, closer examination reveals a more nuanced reality: immigration can drive up housing costs in local areas where migrants arrive all at once.

This phenomenon is not unique to immigration; it’s a symptom of a deeper problem – the failure of US cities to keep pace with population growth when building new homes. Restrictive land-use rules governing many urban areas are a significant contributor to this shortage. For example, Austin, Texas, has managed to build its way out of the housing affordability crisis through smart planning and zoning regulations that allow for flexible development.

Between 2021 and 2025, rents in Austin fell by 4 percent – even as the city’s population continued to grow rapidly. This success story highlights the importance of addressing the root cause of the problem: a housing market unable to keep up with demand. Policymakers should focus on streamlining zoning regulations, investing in affordable housing initiatives, and encouraging innovative construction techniques.

The benefits of immigration often get lost in the debate over its economic effects. Immigrant workers do not simply take jobs from native-born Americans; they create new ones. By acknowledging this complex interplay between immigration, housing markets, and local economies, policymakers can develop a more effective response to these challenges.

Rather than demonizing immigrants or trying to turn back the clock on demographic changes already underway, policymakers should focus on building an inclusive and adaptable economic system that takes into account the needs of both new arrivals and long-time residents. This requires a multi-faceted approach, including measures to address housing shortages and promote economic growth.

The increasing reliance on restrictive zoning regulations as a means of controlling population growth and maintaining property values is exacerbating housing shortages – particularly in areas where land is scarce. Cities across the country are grappling with soaring rents, gentrification, and displacement, which threaten social cohesion and economic mobility.

Some might argue that the Dallas Fed study confirms the worst fears of nativists: immigrants are draining America’s resources and driving down wages. However, this reading ignores the study’s more nuanced findings – including the fact that immigration can create new jobs, stimulate economic growth, and boost tax revenues.

The relationship between immigration and the economy is complex, with both benefits and challenges associated with large-scale migration. Policymakers should weigh these benefits against the costs rather than dismissing them as a “problem” to be solved.

Many cities are pricing out their own residents due to restrictive zoning regulations, highlighting the fundamental tension between economic growth and social equity in urban areas. By acknowledging the role that zoning regulations play in driving up prices – rather than simply blaming immigrants or trying to turn back the clock on demographic changes – policymakers can begin to develop a more effective response to these challenges.

Ultimately, the fate of America’s cities hangs in the balance. Policymakers should focus on building an inclusive and adaptable economic system that takes into account the needs of both new arrivals and long-time residents. By working together to address the complex challenges of immigration, housing affordability, and local economies, we can build a brighter future for generations to come.