At V.P. Debate, J.D. Vance and Tim Walz Scapegoat Immigrants, 'Corporate Speculators' for High Housing Costs

Both candidates mentioned the importance of new supply to bring down housing costs. But their focus was firmly on their chosen boogeymen.

Both candidates at tonight's vice-presidential debate agreed that housing costs are too high. And both Sen. J.D. Vance (R–Ohio) and Minnesota Gov. Tim Walz had their favorite scapegoats to blame the problem on.

For Vance, it was immigrants.

"You've got housing that is totally unaffordable because we brought in millions of illegal immigrants to compete with Americans for scarce homes," said the Republican vice-presidential nominee.

Instead of "blaming migrants for everything on housing, we could talk a little bit about Wall Street speculators buying up housing and making them less affordable," responded the Democrat.

Neither candidate's answer is particularly surprising. Vance has blamed immigrants for raising housing costs throughout the campaign. The GOP party platform claims that deportations will help bring housing costs down.

Meanwhile, the Democratic presidential nominee, Vice President Kamala Harris, has repeatedly blamed "corporate landlords" and "Wall Street" for rising rents and home prices. As a solution, she has endorsed capping rents at properties owned by larger corporate investors and using antitrust law to stop landlords from using rent-recommendation software. Walz was merely aping his running mate's rhetoric.

Vance, to be sure, has also repeatedly blamed institutional investors for raising Americans' housing costs.

There's a straightforward logic to both candidate's claims. Increased demand for housing, whether from immigrants or corporate investors, would be expected to increase prices.

But increased demand should also be expected to increase supply, bringing prices back down.

Corporate investors and immigrants also play an important, direct role in increasing housing supply. Investors supply capital to build new homes. Immigrants supply labor for the same.

At least one study has found that the labor shortages caused by immigration restrictions do more to raise the cost of housing than they do to lower it through reduced demand.

Higher demand fails to translate into supply when the government restricts homebuilding through regulations that limit where and how much housing developers can build.

California and New Jersey have the same percentage of foreign-born residents. California also has a lot more regulatory restrictions on home building than New Jersey. The median home price in New Jersey is 30 percent cheaper as a result.

Vance cited a Federal Reserve study showing that immigration increased housing costs, promising to share the paper later on social media. (The campaign has thus far shared remarks, not studies, from Fed officials, to the effect that immigration has increased demand for housing, which duh.)

Contra Walz, one study has found that restrictions on investor-owned rental housing raised rents and raised the incomes of residents in select neighborhoods by excluding lower-income renters. Studies on the effects of rent-recommendation software have found mixed effects on housing costs. In tight markets, such software raises rents. When supply is loose, it lowers them.

As always, the ability of builders to add new supply is what sets the price in the long term. Both candidates gestured at this in their own way, although Walz was more explicit about the relationship.

"We cut some of the red tape," he said, referencing Minneapolis' experience of liberalizing zoning laws and seeing housing costs fall. Walz's pro-supply remarks were nevertheless sandwiched between calls for spending more on affordable housing and down-payment assistance.

On the supply side of the equation, Vance referenced Trump's plan to open up federal lands for more development, saying the feds own lands "that aren't being used for anything. They're not being used for national parks. They're not being used and it could be places where we build a lot of housing. And I do think that we should be opening up building in this country."

In some Western states, the federal government is the largest landowner and its undeveloped lands act as a de facto urban growth boundary. Vance is right that opening up those lands for development would add supply and lower prices.

Unfortunately, his support for residential development on currently federal-owned land was immediately succeeded by a call to kick out the illegal immigrants who are competing for homes.

So there you have it. Both candidates recognized the role that home building and home supply plays in reducing housing costs. But both were also keen to single out scapegoats—immigrants for Vance, Wall Street for Walz—for increasing demand and prices.

Walz acknowledged tonight that there's not a lot the federal government can do to reduce locally set land use regulations. He's right. But the federal government does have a lot of other levers they can pull to make housing costs worse, from immigration restrictions to nationwide rent control.

And both candidates indicated that they'd pull those levers.