2006 April 09 Sunday
Immigration Lowers Home Ownership

Over at Audacious Epigone crush41 continues to crush thru numbers doing economic analyses of immigration. His attention has shifted toward patterns of home ownership. More foreigners means less home ownership.

It's been awhile since President Bush has touted his push for an Ownership Society. Given the intensity of the current immigration debate, it's prudent of him to keep his mouth shut. Why? Because the larger the foreign-born population, the lower the home ownership rate becomes.

Running a regression on the home ownership rate and foreign-born proportion of the population by state yields a significant factor of zero (it's definitely not random) and an r-squared of just over .42 (42% of the home ownership rate of a state can be explained by number of the foreign-born in that state). For each 1% increase in the foreign-born population as a portion of the state's entire population, the home ownership rate correspondingly decreases .65%.

Some parts of the country are filling up. Real estate prices rise because land prices rise. That phenomenon used to be restricted to fairly small areas. But as populations rise the land cost problem is hitting progressively larger areas of America. This is a situation that only a libertarian or an economist could see in a positive light.

But this trend holds appeal to anyone who likes a heavily class-oriented society with lots of social stratification. I guess that is why the Democrats like immigration. Can't have class warfare without a large lower class.

States with high foreign-born populations are beginning to look like manors. I'm going to look at metropolitan areas with high foreign-born populations to try and focus the effect. It seems reasonable that the inverse correlation between foreign-born and affordability will be even higher. Peasants come because the keeps have plenty of menial chores to be done. The peasants have work, but they can't afford to buy part of the manor. This situation is bad for the burghers, who leave because earning power is being pushed down while costs are going up. It's bad news for natives (future voters) that don't already own a home.

Existing home owners do fine but what about later generations?

The correlation between home ownership and house price is .41. Between home ownership and affordability (home price adjusted for income) it is .34 (both statistically significant; the former being higher at least in part due to folks with moderate incomes in high-priced areas taking their savings to plant roots in cheaper places). Land is becoming more expensive in real terms because of an increase in the foreign-born population. This is making home ownership increasingly difficult for those who do not already own a home.

Ever notice when watching 1950s and 1960s movies how much open space California had? The white population of LA from that era has mostly left for other states. The state continues to fill up. The whites continue to leave. Why should we support high levels of immigration? Time to buld a wall.

Large scale immigration is suicide for the Republican Party for a number of reasons. Housing prices are one of those reasons. See Steve Sailer's The GOP’s Third Electoral Secret: Marriage, Fertility…And Cheap Housing.

Share |      By Randall Parker at 2006 April 09 12:20 PM  Immigration Economics


Comments
Wolf-Dog said at April 9, 2006 2:10 PM:


Although immigration is certainly the main cause of the population increase in the United States, I must emphasize that I have read that the current housing boom is such that many of the buyers who have caused the prices to go higher, were the ones who were buying second or third, or fourth houses. This is due to the fact that wealth got concentrated. In 1980 the top 1 % owned only 20 % of the wealth in the United States, but right now, the top 1 % are close to owning more than 45 % of the wealth. Additionally, the top 10 % own more than 90 % of the wealth. Adjusting for inflation, the net worth of the median American household fell 10 percent between 1989 and 1997, declining from $54,600 to $49,900. But the lower 25 % have a net worth less than $10,000 per family. Immigration alone is not responsible for this change. But the Darwinian competition is the reason there is so much stratification. I agree that the immigration should be more skill and ability based (like New Zealand which has a point system), but despite this, the housing shortage is partly due to the fact that the top 10 % who own 90 % of the wealth, have the capability to buy everything in the market, effectively creating a shortage for the poor.

http://www.cooperativeindividualism.org/wealth_distribution1999.html

Ivan Kirigin said at April 9, 2006 5:34 PM:

Ever been to Bakersfield, CA? All the cheap land you could want. The weather isn't as nice as you'd like for the area, but I'm sure home ownership rates are extremely high because land is so cheap.

John S Bolton said at April 9, 2006 5:54 PM:

The relevant factor here is median personal income of foreign born. Immigration which rapidly degrades quality of population has all amnner of negative ramifications. The journalistic mentalities rejoice at the effect on house prices, in places where eco-monstrosities have created artificial scarcity; but piling more and worse foreigners into housing units drives forth the greater part of those who contribute to the maintenance of civilization.
Already the financial net worth of blacks and hispanics in America is less than 1% of that the majority.

Rick Darby said at April 10, 2006 6:04 AM:

And yet, many people who call themselves conservatives or libertarians believe that the problem is that whites, the "intelligentsia," or the affluent are having too few children. They look at flood levels of immigration and the high fertility rates of immigrants and say, gee, we'd better try to keep up in the procreation race.

Idiots.

The sane answer is to reduce or even reverse overall population growth, not compete to see who can produce the most of it.

RueHaxo said at April 10, 2006 9:02 AM:

Amen to that Rick Darby. I'm not ordinarily a Lew Rockwell fan, but I'd like to quote something Gary North wrote at that website:
"In a society that has high land costs, labor is not paid well. Mobility is too costly. People stay put. Opportunities are few. In a society with cheap but productive land, labor is paid very well. Why? Because labor is mobile. A man can move somewhere else, where the cost of living space is lower. Local employers must bid against the opportunities that beckon. The grass is always greener on the other side of the river. Dreams lure productive men to distant locations, where their talents face less competition."
If we want American style capitalism, with small government and less redistributionism, low population densities are essential. Crowding all the arable land isn't. If we peacefully reduce our population to 200 or 150 million over the next century or century and a half, I wouldn't be a bit upset.
I doubt you'd find the public support for it now, but we need to look for practical ways to colonize space. As medical technology and SENS advance, the US and Earth will only get more crowded.

crush41 said at April 10, 2006 10:35 AM:

Wolf-dog,

But the question is why the inverse correlation between home ownership rates and immigrants. High concentrations of wealthy people who need cheap services? That attracts a large, mostly foreign underclass that cannot afford housing as is and then inflate prices further. So the middle class leaves. As John Bolton pointed out, the importation of foreigners that have incomes and net worths well below the national average contribute to the growing wealth disparity by making those uber-rich capital holders you mention even wealthier by comparison (and absolutely).

scottynx said at April 10, 2006 11:07 AM:

Rick Darby,
If net taxpayers have more children, won't that ease the burden on future generations of net taxpayers, and allow low-productivity net-tax eaters a more generous public subsidy? Highly productive people having children is not the problem. Some people can pay enough taxes to fund the infrastructure improvements to make it livable (which means that they *lowered* the crowding burden by existing), and some can not.

Rick Darby writes:
[The sane answer is to reduce or even reverse overall population growth, not compete to see who can produce the most of it.]

This used to be the position of leftists back when whites had high birthrates. But now since it's the hispanics with high birth-rates, it's no longer a PC position to take (it's still cool to dump on the few whites that still have large families though, especially if they are religious and/or rednecks). If there was a new anti-population growth indoctrination drive, who do you think it would mostly be directed to at by leftists, and who do you think might be inclined to listen to "reason" (though mistakenly)? Who even watches or reads the news to get the message? The productive.

Here is La griffe Du Lion:
[Mentor. ........ Tell me, what do the demographers see for the total US population at the end of the century?

Prodigy. Close to 600 million.

Mentor. Do you see that as a problem?

Prodigy. Not even close. We can comfortably sustain many times that number. The problem I see has not so much to do with quantity as with quality.]
"2048"
http://www.lagriffedulion.f2s.com/2048.htm

Here is the bottom line: If the US had 30 million people, but 90% of them were hispanic and black, we would be a third world hell-hole. If the US had 2 Billion people, but 70% of them were white/asian, we would still be a prosperous, booming, first world nation.

True, the environment would probably do better with a small, mostly third world population, rather than an enormous, mostly first world population, but the quality of living for all (but especially for the unproductive of all races) would be *horrendously worse* in the former. Would you choose to live in the former or the latter?

scottynx said at April 10, 2006 11:44 AM:

Ivan Kirigin writes:
[Ever been to Bakersfield, CA? All the cheap land you could want. The weather isn't as nice as you'd like for the area, but I'm sure home ownership rates are extremely high because land is so cheap.]

Here is mapquest on the drive from Bakersfield to LA, where most people in Bakersfield must work to make a decent living. I just typed in both city names, not a particular address:
Total Est. Time: 1 hour, 48 minutes Total Est. Distance: 111.81 miles

http://www.mapquest.com/directions/main.adp?go=1&cat=&1pn=&1a=&1c=Los%20Angeles&1s=Ca&1z=&1y=&1ffi=&1l=&1g=&1v=&2ffi=1&src=maps&ct=NA&2a=&2c=Bakersfield&2s=CA&2z=&2y=US&2pn=&2l=ELQFUldn8nk%3d&2g=qvktZ908XPHf9KW2BcZAuQ%3d%3d&2v=CITY&2pl=&r=f

If a young, working class man has to drive 20 hours a week (4 hours there and back X 5 days a week) to own a home, there is a big problem.

Rick Darby said at April 10, 2006 12:11 PM:

Scottynx,

I wouldn't choose either. Why should I have to? Those aren't the only possibilities. We should welcome and encourage lower fertility rates among all races and ethnic groups.

You say: "This used to be the position of leftists back when whites had high birthrates. But now since it's the hispanics with high birth-rates, it's no longer a PC position to take (it's still cool to dump on the few whites that still have large families though, especially if they are religious and/or rednecks). If there was a new anti-population growth indoctrination drive, who do you think it would mostly be directed to at by leftists, and who do you think might be inclined to listen to "reason" (though mistakenly)?"

That's all too true. I was working for Zero Population Growth in the 1970s when Paul Ehrlich, who made a fool of himself and discredited the population-stabilization movement for decades through reckless and sensationalist predictions, went himself one worse by declaring that population limitation should only be advocated for whites, while blacks should be exempt. The scoundrel was trying to take the heat off himself because even then some radical leftists thought population stabilization was a plot against black people. Ehrlich's lack of principle, generally adopted by population and environmental organizations (notably the spineless Sierra Club), turned fecundity into a respectable weapon for irresponsible breeders to gain an advantage over those who had the brains to see what overpopulation would do to the environment.

We should end all pro-natalist policies, including classifying pregnancy as (in effect) an "illness" that others should have to subsidize through their health insurance premiums. And the social pressure to limit families to replacement size should apply equally to all races and ethnic groups.

And it seems to me that anyone who can describe a United States of two billion people as "prosperous, booming" must have no quality-of-life values. But even if economic issues are all that matter to you, may I point out that this country was quite prosperous and booming when it had 100 million fewer inhabitants, half the number of cars and a good deal more open space?

Rick Darby said at April 10, 2006 12:14 PM:

Scottynx,

I wouldn't choose either. Why should I have to? Those aren't the only possibilities. We should welcome and encourage lower fertility rates among all races and ethnic groups.

You say: "This used to be the position of leftists back when whites had high birthrates. But now since it's the hispanics with high birth-rates, it's no longer a PC position to take (it's still cool to dump on the few whites that still have large families though, especially if they are religious and/or rednecks). If there was a new anti-population growth indoctrination drive, who do you think it would mostly be directed to at by leftists, and who do you think might be inclined to listen to "reason" (though mistakenly)?"

That's all too true. I was working for Zero Population Growth in the 1970s when Paul Ehrlich, who made a fool of himself and discredited the population-stabilization movement for decades through reckless and sensationalist predictions, went himself one worse by declaring that population limitation should only be advocated for whites, while blacks should be exempt. The scoundrel was trying to take the heat off himself because even then some radical leftists thought population stabilization was a plot against black people. Ehrlich's lack of principle, generally adopted by population and environmental organizations (notably the spineless Sierra Club), turned fecundity into a respectable weapon for irresponsible breeders to gain an advantage over those who had the brains to see what overpopulation would do to the environment.

We should end all pro-natalist policies, including classifying pregnancy as (in effect) an "illness" that others should have to subsidize through their health insurance premiums. And the social pressure to limit families to replacement size should apply equally to all races and ethnic groups.

And it seems to me that anyone who can describe a United States of two billion people as "prosperous, booming" must have no quality-of-life values. But even if economic issues are all that matter to you, may I point out that this country was quite prosperous and booming when it had 100 million fewer inhabitants, half the number of cars and a good deal more open space?

scottynx said at April 10, 2006 12:54 PM:

Rick, thank you for explaining your position more. I whole-heartedly agree with you that the lower america's population (within reason), the more livable and enjoyable country it will be, if all else is held equal.

Ivan Kirigin said at April 10, 2006 8:02 PM:

Scottynx,

You obviously would answer "no" to my question, "Ever been to Bakersfield, CA?"

No one there commutes to LA.

Given the quantities of land, and ease of availability of areas with low crime and good schools, you don't have to move to LA to make a decent living.

The cost of my current house (in Boston) would fetch something comparable in LA. In Bakersfield, it would buy something 3-4 times the size.

The cost of living there is that it isn't a city (compared to LA or NYC or whatever) -- less culture and cosmopolitanism.

The benefit of living there is that is isn't a city.

scottynx said at April 10, 2006 10:42 PM:

Ivan, I'll admit that you are right and I'm wrong (and I haven't been to bakersfield). I ASSumed it was just a small desert community, a description far more befitting the town of Baker (pop. 914!). I found a source that mentions 6,000 Bakersfield to LA commuters, though it doesn't say how that was figured out, and I can't figure out the articles date:
http://www.telelavoro.rassegna.it/new1.txt

In a population of 307,471 [wikipedia, 2005 est], a mere 6,000 commuters may as well be nothing. But... though I didn't know this at the time of my ignorant last post, I have found a source that says Bakersfield is no longer the cheap housing city that it very recently was:

"Welcome to smoggy Bakersfield, face of housing bubble" from Investors Business Daily, 8/26/2005
http://www.investors.com/breakingnews.asp?journalid=31215270&brk=1

excerpts:
[....Bakersfield edged out Las Vegas as the hottest housing market during the first quarter, with average house prices jumping 34% between March 2004 and March 2005, according to the Office of Federal Housing Enterprise Oversight....]

[......Joining them [scottynx: Regular Home-owners] have been speculative buyers, who by various estimates comprise roughly one-fourth of the market.
"I'm looking at other areas now. It's just outrageous."
Real estate broker Michael Mikhail
Combined, the two have pumped up prices with average listings nearly doubling to $329,484 from $166,400 since the beginning of 2004, according to local estimates.]

[Additionally, the area's weak job market is forcing a sizable number of residents to commute to Los Angeles, or even further to Ventura County on the coast, 120 miles away from Bakersfield.

No current census data on the number of Bakersfield residents making the trek [scottynx: Don't ask me where the source above got thier number of 6,000!], but anecdotal evidence suggests the number has grown significantly since 2000.

Peter Smith, senior planner for the Kern County Council of Governments in Bakersfield says the 5 a.m. traffic going south on Highway 99 toward L.A. now rates as a "B-minus" or "C-Plus" -- meaning motorists can't go top speed as much as they used to. As recently as five years ago, it was rated "A," meaning the road was wide open.]

[....Bakersfield is expanding westward as farmers are itching to sell their land to developers, attracted by the prospect of becoming instant millionaires.

Farmland now goes for roughly $130,000 an acre, up from $3,500 four years ago, Doremus said.]

This kind of reminds of Edmund Burke's speach to the English parliament on conciliation with America. Speaking of the exploding American colonial population, he says:
[There is no occasion to exaggerate, where plain truth is of so much weight and importance. But whether I put the present numbers too high or too low, is a matter of little moment. Such is the strength with which population shoots in that part of the world, that, state the numbers as high as we will, whilst the dispute continues, the exaggeration ends.]

Replace the exploding american colonial population with several of the problems facing America today, and the statement might just be applicable (don't think I'm excusing my ignorant last post though).


scottynx said at April 10, 2006 10:48 PM:

PS: Edmund Burkes speach on conciliation with America: http://www.econlib.org/LIBRARY/LFBooks/Burke/brkSWv1c3.html

John S Bolton said at April 11, 2006 2:55 AM:

What is overlooked in analyses of this correlation, is that adults can't learn a foreign language. America has a white-collar economy, but low-literates need a blue-collar one, to compete on equal terms. To form a ghetto, where language infacility has less negative effects; immigrants must pay a much higher rent, and accept a much lower wage, in order to drive the others out. The proportion of rental properties needs to be high; all single-family land use makes ghetto-formation most unlikely.
Richer jurisdictions can afford more welfare programs at higher payout levels; this attracts migrants who eventually drive the per cpaita income of such a jursdiction back to the national average, and sometimes even far below it. Immigrants with lower incomes, lower white collar job preparedness, and generally greater social service requirements, will move preferentially to the jurisdictions which accomodate them better.

Randall Parker said at April 11, 2006 6:04 AM:

Take away all the Hispanic immigration and the air in Bakersfield and LA would be a lot cleaner.

Ivan advocates moving somewhere that'll cause lung damage. Libertarians have a problem internalizing the notion of external costs...

crush41 said at April 11, 2006 8:10 AM:

Ivan,

Bakersfield's foreign-born population is half that of California, and a third that of LA. Consequently, the median home price there is half that of the rest of the state even though median income is 80% of the state. Bakersfield is an example of a city that hasn't yet been hit with the immigrant deluge. When it does--and it's my understanding that's happening now--housing will become less affordable, congestion/pollution will increase, affordability will plummet, wealth disparity will grow, and good schools will disappear.

You seem to try and repudiate the argument that a large foreign-born population is bad by pointing to a good place that has a small immigrant population. It is a non-sequitur.

Rick,

Your position strikes me as quixotic (and I say that with all due respect as I generally find your comments insightful and thoughtful). If you want peace but another nation wants war, not competing militarily will sink you. Well, third-worlders obviously have no concept of population control. Mexican women in the US have over three children on average and have them early. There is not a trace of population restrictionist sentiment in the Hispanic community that I am aware of. So as they grow in relative proportion, your position becomes more and more untenable. Low native birth rates only accentuate this.

Also, how to tackle the entitlement explosion of retiring baby-boomers? We need to restrict underclass importation and realize native replenishment.


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