Housing ‘Shortages’: The Immigration Dimension

By Carl F. Horowitz

[Recently by Carl Horowitz: As Vermont Goes…So Might Have Gone The Nation]

Steve Sailer pointed out last week that fast-increasing house prices seem to provoke Americans to vote Democratic. But why are house prices increasing?

Part of the answer: Loudoun County, Virginia, no longer just the rural fringe of the Washington, D.C. metropolitan area. Population-wise, since 2000 it’s been the fastest-growing county in the U.S.—and one of its most prosperous, too, with a mean household income in 2003 of $112,448.

But lately it has been undergoing a housing crisis that reveals some dark consequences of mass immigration.

Late this summer the County Board of Supervisors voted unanimously to adopt a section of the Virginia building code designed to limit overcrowding in single-family dwellings. The rule requires that a housing unit must contain at least 50 square feet of interior space for each occupant.

It's a milquetoast measure almost guaranteed not to result in evictions. The county, in effect, is saying that no more than 40 people may live in a 2,000-square-foot house. So what? Some of the wildest fraternity parties on America’s college campuses don't meet this threshold.

But context here is everything. The occupants of these homes are overwhelmingly Hispanic immigrant renters.

The area’s County Board representative, Eugene Delgaudio, had introduced the housing code proposal after receiving a flood of complaints from constituents. Residents had told him that some neighboring homes contain 20 or more renters who sleep on floors on townhouses, urinate in yards due to overcrowded conditions inside, and park more than a dozen cars on the street and/or in the yard.

The landlords who lease these premises have done more than tolerate these conditions; they’ve promoted them. They often partition each room into two or more smaller ones, thus increasing the potential number of occupants, and with it, rental income. The new ordinance provides funds to hire two inspectors to investigate such cases. Preliminary cost to taxpayers: $149,415.

A local black civil-rights activist, Albert Bland, is up in arms, accusing the county of practicing anti-Hispanic apartheid. "You introduced a bill directed at one race of people, at Hispanic citizens," he huffed to the county board at a public meeting. "That is one of the worst discrimination bills in all my years in Loudoun County."  Limits on residents adopted by Board, By David Bradley, Loudoun Easterner, September 8, 2004,

The splenetic Mr. Bland complains too much.

First of all, it is unsafe to assume the squatters are citizens, or for that matter, even legal residents (a good number, in fact, are suspected members of the notorious nationwide gang, MS-13).

Second, a county or municipal government can hardly be said to be "racist" in promulgating basic health and safety standards for housing.

Third, and most importantly, this sort of moral grandstanding misses the extent to which population growth drives housing markets.

The term "high-growth" doesn’t do justice to Loudoun County. Its Census population of a little over 86,000 in 1990 had nearly doubled to just about 170,000 in 2000. As of July 1, 2003 its population stood at 221,746. The 30.7 percent increase over the latter three-year period was the highest for any county in the U.S. Not unrelated to this, about 5.7 percent of the county’s residents were foreign-born in 1990. By 2000 the immigrant share had doubled to 11.3 percent.

It's not as if builders haven't accommodated the crush of house seekers, whatever their geographic origins. The housing stock has increased at a galloping pace. In 2003 the county contained 78,982 dwelling units, up from 62,160 in 2000, and there has been a corresponding proliferation of shopping malls, office parks and restaurants.

It is nearly impossible to drive along any county road anywhere east of Leesburg without encountering evidence of ongoing or recent construction, so stunning has been the transformation of the countryside.

Yet in the face of this, housing has gotten impossibly expensive for first-time homebuyers of modest means. The average price for a home sold back in 1993—the year I moved to Ashburn, in the eastern, more densely populated portion of the county—was $178,894. By 2003 this figure had more than doubled to $372,558.

Whereas a dozen years ago a new four-bedroom luxury single-family detached home could be had for $250,000, that same unit today would be a steal at $500,000.

In theory, this should not be happening. A fast-growing supply of anything is supposed to keep prices low. But then again, in theory, the Virginia Department of Transportation's ambitious program of major road construction and improvement should have eased daytime congestion. Anyone who has lived and/or worked in Loudoun County as long as I have, however, can attest to the reality that local traffic jams are far worse, and for longer periods of time (even on weekends), than ever before.

Loudoun County, in other words, is learning the hard way the meaning of the term "carrying capacity." It is fast approaching limits to its ability to provide an environment so many people moved out here to enjoy in the first place.

Of course, job growth and low mortgage interest rates explain much of the building boom and attendant population increase. But mass immigration is the great unspoken reason.

To see where all of this might lead, cross the Potomac and look at Montgomery County, Md. Much more established than Loudoun County, but still highly affluent and educated, its 2000 population was 873,341, of which fully 26.7 percent were foreign-born. In January 2004 the estimated county population had grown to about 931,000.

Local officials in this Democratic stronghold admit that immigration has played a huge part in this. The county Department of Housing and Community Affairs, in its long-range housing policy document, published in 2001, concluded: "After taking into consideration out-migration, it is estimated that foreign immigration is responsible for 85 percent of Montgomery County’s population growth."

Immigrants and their offspring are sure to keep housing demand high for the D.C. area as a whole, even with a continuing building boom. George Mason University’s Stephen Fuller projects a deficit of 218,000 dwelling units for the metro region in 2025.

Housing shortages, in other words, can occur even when production is high, so long as demand cannot be satisfied.

And it is immigrant-driven demand that is escalating production to what yet may become unsustainable levels, in a national as well as a local context.

This notion is not especially popular among builders and mortgage lenders (including Fannie Mae and Freddie Mac), which have become prominent immigration enthusiasts in recent years. More immigration, after all, means more population, which in turn means more housing to build, sell, rent, appraise and maintain.

Housing starts during 1994-2003 averaged nearly 1.58 million a year, a jump of about 9 percent from the 1984-1993 annual average of 1.45 million. The 2003 figure of nearly 1.85 million was the highest since 1978, and its single-family portion, 1.5 million, was the highest in U.S. history.

My purist libertarian friends—by no means necessarily of the open-borders mentality either—point to regulation as the culprit for rising house prices and rents. Get rid of zoning ordinances, growth controls, occupancy codes and other government restrictions, they argue, and builders will be able to make their product more affordable. "Overcrowding" is a relative term anyway, an invention of misguided Puritan reformist impulses of a century ago. Etc. etc.

It’s a comfortable, and illusory, mantra. But such a strategy never can be more than marginally effective without lowering immigration ceilings and toughening border and interior enforcement. Anyone who thinks excessive land use regulation explains why certain portions of Sterling, Virginia have come to resemble a Hispanic squatter camp is not living in the real world.

On a crude level of self-interest, the local housing shortage has been beneficial. I bought my current townhouse back in 1993 for $140,000. Today I could get $300,000, even $325,000, in a snap.

But—it’s not likely I could afford anything better at the same mortgage payment level.

And even staying put has gotten more expensive, thanks to the rising cost of public service provision, most of all, education. The last few years have seen sizable property tax hikes. An encore is almost inevitable. Loudoun County officials are projecting a net influx of at least 25,000 additional students into the public school system over the next five years, a large portion of them the children of immigrants. Fully 21.7 percent of the county population in 2000, in fact, consisted of school-age children, while 9.7 percent were of preschool age.

Those already-high proportions likely have risen since, if the preponderance of baby strollers at the Dulles Town Center shopping mall has been any guide.

County Board of Supervisors Chairman Scott York explains the dilemma:

"Being number one [in growth] is nothing to brag about, unless you are thrilled to death about having to build 28 schools in the last eight years and 23 more schools over the course of the next six years." (Loudoun is Fastest Growing, By S. A. Miller, Washington Times, April 9, 2004).

A lot of suburbanizing counties in the U.S. are about find themselves in the same predicament.

Immigration restriction is the ultimate smart-growth tool.

It’s the responsibility of Congress to employ it.