Few places in the world are more welcoming of immigrants than New York City. But in recent weeks, a vast and persistent inflow of asylum seekers has tested the Big Apple’s financial and political capacity to accommodate newcomers.
The problem derives in part from its (relatively) humane homelessness policies. A shelter bed is guaranteed to every unhoused person within the city limits. This obliges New York to find and pay for shelter space for all migrants who arrive there. Since a wave of migrant arrivals began last August, the homeless-shelter population has swelled by 56 percent, overwhelming the system’s capacity. This has forced New York to find alternative housing arrangements for the asylum seekers, including relatively high-cost ones such as rooms in commercial hotels. Altogether, sheltering migrants now costs the city $8 million a day, and that figure will continue to rise absent a sharp reduction in arrivals. If current trends continue, housing asylum seekers will cost the city more than $3 billion through the end of next year.
The inflow of migrants poses logistical challenges as well as financial ones. In recent days, Mayor Eric Adams sought to shelter them in public-school gymnasiums. This spurred a predictable backlash from parents. Protesters mobilized with signs sporting such messages as “We support asylum seekers but NOT at school.” The mayor’s office abandoned the policy and transferred the migrants to an as yet undisclosed location.
The challenge facing New York has many dimensions. Providing temporary shelter to a rapidly increasing population of needy people is inherently difficult and expensive. The federal government can and should help shoulder those financial costs.
But one key contributor to NYC’s migrant crisis is its preexisting housing shortage. The city would not have such difficulty finding accommodations for asylum seekers if it didn’t already have a large homeless population. And it would not have so large a homeless population if its housing stock had kept pace with household growth in recent decades.
The latter point is well illustrated by the divergent trajectories of homelessness in New York City and Houston over the past decade. Between 2010 and 2019, Houston added 58.2 housing units for every 1,000 residents. New York, by contrast, added just 25.3.
This was nowhere near enough to compensate for job growth here — and thus population growth. Between 2010 and 2017, the number of jobs in the city spiked by 18.1 percent while the number of housing units inched up by only 3.7 percent. Houston, by contrast, managed to expand housing at nearly the same pace as jobs, with the latter outgrowing the former by just 1.8 percentage points.
The cause of this discrepancy isn’t hard to discern: New York City’s zoning code places myriad restrictions on new housing development, but Houston’s laws impose unusually few.
Partly as a result, housing costs rose much faster in New York than in Houston over the past decade as demand for housing swamped the supply. And since housing unaffordability is the main driver of homelessness, the Big Apple’s unhoused population increased along with the prices. Houston, by contrast, cut its homelessness rate in half between 2011 and 2019.
The concerted efforts of Houston’s Coalition for the Homeless were indispensable for that achievement. But as Ned Resnikoff has documented, Houston’s relatively affordable housing prices made that success possible by preventing many financially precarious tenants from becoming homeless in the first place and by making it more affordable for the city to finance housing for those already on the streets.
If New York City were more tolerant of housing development, it would (1) have more shelter beds available to migrants today and (2) be able to finance more migrant accommodations per dollar since the cost of renting or purchasing housing units in the city would be lower.
New York’s struggle to reconcile housing scarcity with mass migrant arrivals is indicative of a broader reality: The capacity to expand housing supply in response to demand is a precondition for making mass immigration work both economically and politically.
Right-wing populists portray immigrants as a threat to the livelihood of the native born; as foreign-born workers saturate labor markets, jobs become scarce and wages fall, they say. But this is premised on a fallacy. Although prime-age immigrants do increase the labor supply, they also increase the labor demand: More people means more consumption of goods and services and thus more demand for the workers who provide them.
Yet one key sector in which immigrants drive higher demand is housing. People need homes. And while this is good for construction employment, it is bad for housing prices — if your zoning laws make it impossible for supply to increase in response to demand. In a world of restrictive zoning and housing scarcity, the nationalist right’s anti-immigrant narrative attains a modicum of plausibility: If the supply of housing units is largely fixed, then allowing immigrants to enter your city will reduce the housing security of the native born.
This insight should not lead us to abandon large-scale immigration, however, but to facilitate housing development. As a matter of ethics and economics, the United States must increase legal immigration. Since our nation’s population is aging, a shrinking share of prime-age workers will need to support a growing share of retirees in the coming decades. At the same time, the working-age population of sub-Saharan Africa is set to grow by 700 million by mid-century and that of Latin America and the Caribbean by 40 million.
Allowing prime-age workers from poorer countries to come to the U.S. would simultaneously reduce global poverty and increase American prosperity. By the same token, were the U.S. to bar immigrants from low-income regions adversely impacted by climate change, it would effectively be choosing to make itself poorer for the sake of condemning foreigners to penury.
But making mass immigration economically beneficial and politically palatable will require housing abundance. Leftists who support the principle of open borders but oppose market-rate housing construction — despite lacking anywhere near the political power necessary to expand social housing at a pace with population growth — are rendering the U.S. political economy less amenable to immigration. And suburban liberals whose lawn signs declare their love of immigrants but whose voting behavior evinces hostility to new multifamily housing in their towns are similarly undermining their supposed ideological commitments.
When housing construction fails to match population growth, massive immigration imposes burdens on ordinary people. As recent events in New York make clear, that will create political difficulties in even the most cosmopolitan of areas.
