US Immigration Levels, Urban Housing Values, and Their Implications for Capital Share
In the densest urban areas of the United States, we find that 11.6 percent of the median contract rent prices are determined by the increased level of immigration relative to 1970. In extremes, most notably Queens County, NY, this number may be as high as 24 percent. In San Francisco, where the increase in housing prices attracts the most attention, we calculate that immigration since 1970 is responsible for 15 percent of the increase. However, these numbers are upper bound estimates, given the findings elsewhere by Sharpe (2015). Ultimately, increased levels of immigration have had a measurable but modest impact on urban housing market affordability throughout the United States. Immigration’s meaningful impact on property values in urban counties contributes to the increase in the net capital share of income if Rognlie (2015) is correct. The present magnitudes of immigration contribute about a third of the change in urban housing prices from 1970 to 2010 which maps to approximately thirteen percent of the overall increase in property values. We take this as an approximation of how much of the increase in capital share is attributable to increased levels of immigration via the housing sector.