Legitimizing the Lie: Migrants Cause Housing Crisis

A recent article from Newsweek highlights how hateful and racist lies are manufactured and later legitimized for corporate profits

Photo by Blake Wheeler on Unsplash

Last week, Newsweek published an article titled, “Migrants May Be Causing U.S. Housing Shortage: J.P. Morgan.” The article, by Newsweek’s senior editor Robert Thorpe, argues that the racist lie about migrants causing the housing crisis might be true. While the J.P. Morgan report briefly mentioned the possibility that migrants “could be” causing the housing crisis, and even though most economists have shown they aren’t, you’d think a senior editor at Newsweek would not be legitimizing it with such an inflammatory headline.

Before Newsweek, Thorpe was employed at Bankrate, a consumer financial services company. So it seems his bias is ‘on the nose,’ so to speak. But to participate in perpetuating a lie because it’s good for your portfolio embodies precisely everything that ever ailed this country with pinpoint precision. But let’s face it, the truth never stopped anyone from putting their money behind a lie. Hate is big business after all.

From the genocide of Indigenous people and slavery to Jim Crow, redlining, and the mass incarceration of Black people and Latinos, lies have always been perpetuated for profit in the U.S. Thorpe’s article highlights how these falsehoods are exploited to create new industries that exploit people and extract their wealth. It’s a blatantly racist narrative that Trump’s team added to the many other lies to justify mass deportations. Now, it's being legitimized for profit.

While Thorpe talked about the “complex dynamics” of the housing market, he ignored arguably the biggest contributor to the shortage in affordable housing in favor of wrongly blaming immigrants. Thorpe did not offer solutions. Instead, he relegated the real driving factors behind rising housing costs – corporations and residential home investors – to a single paragraph making it appear as though the truth wasn’t worth much to the Newsweek senior editor.

"While immigration and a lack of new construction are often cited, the bigger issue stems from cheap capital and low interest rates,” Kevin Thompson, founder and CEO of 9i Capital Group, told Newsweek. “This mirrors the Great Financial Crisis in many ways. The housing market is seen as part of the American Dream—offering sustainable cash flow opportunities—which has incentivized institutions, corporations, and individuals to buy properties across the country."

Interestingly, J.P. Morgan’s report which Thorpe was adamant about citing, didn’t suggest immigration was as big of an issue as he claims it is. The report debunks him many times after rarely mentioning immigration. The only mention in the report of migrants potentially creating the situation said migrants “could be” ramping up housing demand and a shortage of stock.

“It’s estimated that there are 11.2 million undocumented immigrants in the U.S., and that number may be higher,” reads a bullet point in the report. This could be ramping up housing demand more than figures suggest, resulting in a shortage of stock.”

But then, the next paragraph provides quite a clarification.

“People are staying put for longer due to high interest rates, so housing stock is not being freed up. The lack of supply is primarily a lock-in issue,” said John Sim, head of Securitized Products Research at J.P. Morgan. “More than 80% of borrowers are 100 basis points (bps) or more out-of-the-money. These are borrowers who have a significant disincentive to sell their home, and this is creating the dearth in supply.”

The only other mention of immigration was when also criticizing and debunking Trump’s own propaganda about migrants and the housing crisis.

“On the demand side, Trump has been less vocal about solutions. However, he has consistently emphasized the effects of immigration on housing market demand,” said Sim. “By reducing immigration and lessening demand, Trump argues that housing costs can be reduced. It’s not that simple, though — approximately 30% of construction workers are immigrants, so there could be complex implications,” Sim continued. “Cutting immigration would mean cutting labor supply in the construction industry, which could end up exacerbating the lack of affordable housing.”

That was it. How Thorpe came to the “Migrants May Be Causing the Housing Crisis” narrative from that is beyond me but I have a pretty good idea. The same reason we’ve been hearing this lie for the last year from the far-right: Latinophobic-centered xenophobia. It’s a prime example of how the media plays into racist narratives for the benefit of corporate interests and profit. It also shows how companies like J.P. Morgan mentioning it are welcoming it.

Then, as if it was coordinated with the release of the report cited by Thorpe, just two days after the Newsweek article, J.P. Morgan Asset Management issued a press release about launching another “Build-To-Rent” (BTR) community under a joint-development group called Laseter Development Group. According to the press release, in addition to J.P. Morgan, the group includes the principals of Atlanta-based residential investment and development firm, Georgia Capital, and Paran Homes, its affiliated production homebuilding company.

“Since 2020, J.P. Morgan Asset Management has been a leader in the single-family rental space and currently owns a nearly $2 billion portfolio totaling 65 communities and more than 6,000 homes throughout the United States on behalf of institutional investors.”

On the same day, many bloggers and various industry-related websites started running articles about J.P. Morgan’s newest venture into the build-to-rent industry. The running themes mostly discussed how J.P. Morgan was prepared to exploit the current housing crisis not by offering solutions, but by creating an industry to profit from. And like so many of his counterparts, John McManus at The Builders Daily said the quiet part out loud, seemingly unintentionally.

“At first glance, it’s yet another example of institutional capital flowing into the SFR [Single Family Residential] and BTR [Build-To-Rent] spaces. But a closer look reveals something more: a structural reset in the power dynamics of homebuilding, development, and investment. This isn’t just a deal; it’s a signal of a new balance of power in how capital, homebuilders, and land acquisition strategies intersect in today’s high-barrier housing market.”

Somehow, McManus’s statement is supposed to be positive and I guess if you’re in the real estate game with J.P. Morgan, it probably is. But to the people looking to one day purchase a home that they can call their own, it’s ominous news. Some of the inherent problems with housing development programs like this are obvious. But the most glaring comes from wealth extraction. From getting people to pay for a home that will never be theirs to putting that money in the pockets of billionaires. Rather than solve the problem, they plan to manipulate it for profit.

“This initiative underscores our strategic focus on the BTR asset class and reinforces our commitment to this high-conviction sector,” said Chad Tredway, Head of Real Estate Americas at J.P. Morgan Asset Management. “Demographic shifts and job growth in the Sunbelt are driving increased demand for single-family housing. With Millennials seeking more space and housing prices at record highs, many are turning to rentals, fueling the growth of this sector.”

Another intriguing portion of the Newsweek article speaks of the “deficit of around 1.5 million homes,” citing a blog post from the National Association of Homebuilders (NAHB) that blames “a decade of under-building that began in the year following the Great Recession” for the housing crisis. Yet, neither the article nor either of the reports mentioned the millions of vacant corporate-owned homes in the United States driving demand and prices up.

It doesn’t take an economist to know that manufactured scarcity will do that. In October, The Institute for Policy Research (IPR) issued a joint press release discussing a new report titled, “Billionaire Blowback on Housing.” The report goes into great detail about the underlying crisis caused by billionaires buying up residential properties and building an insurmountable wall that essentially cuts off what were once considered paths to home ownership.

“... Blackstone is the largest corporate landlord in the world … owns more than 300,000 residential units across the U.S., has $1 trillion in global assets … owns 149,000 multi-family apartment units; 63,000 single-family homes; 70 mobile home parks with 13,000 lots through their subsidiary Treehouse Communities; and student housing, through American Campus Communities (144,300 beds in 205 properties as of 2022). Blackstone recently acquired 95,000 units of subsidized housing.”

In 2022, an article from the National Association of Realtors cited a Lending Tree study that showed more than 16 million homes are sitting vacant in the U.S. – a number that has been largely unmoved since, according to more recent research such as that from the IPR. There is no question that this is a major, if not the biggest, contributor to the increased housing costs.

“Wealthy investors are acquiring property and holding units vacant so that in many communities the number of vacant units greatly exceeds the number of unhoused people. Nationwide there are 16 million vacant homes: that is, 28 vacant homes for every unhoused person.”

Yes, the housing market has “complex dynamics” as Thorpe said. But it's not just a disservice to leave out one of the biggest issues in those dynamics to blame immigrants, it’s a narrative that breeds outright hate not unlike this country has seen before. This same narrative was used against the Chinese more than 100 years ago, the Irish and Italian people 100 years ago, and Latinos throughout the 20th Century. Let’s not pretend it’s new. But let’s also not pretend we don’t know where it comes from. There’s a whole racist history there.

In the end, it appears the conclusion Rhodes was trying to reach was this:

“Policymakers will need to balance immigration reform with housing policy. While J.P. Morgan's report highlights migration as a factor in the housing shortage, solutions will require addressing broader issues such as zoning reforms and construction incentives.”

That sums up what feels like an article meant to drive sympathy toward the housing industry; to include provisions and subsidies in the next immigration bill (as if we don’t subsidize the J.P. Morgans of the world enough). This country needs to face the fact that the housing system, along with many other systems, is broken and the people behind it made it that way with purpose and malice driven by greed. The industrialization of everything is the problem.

If immigrants were truly the problem behind the housing shortage, people like Thorpe would all be screaming to prevent the mass deportations that would all but certainly crash the market. But he and his buddies aren't saying anything because everyone in his world seemingly knows that they are promoting a lie that they intend to profit from.

New industries like build-to-rent housing create profit funnels for the wealthy that are more profitable than fixing the problem for future generations. The build-to-rent industry will create a world of servitude to glorious corporate landlords while being designed to lock common people out. This way, only the wealthy can reap the financial reward of robbing the people of their wealth.

In closing, I'll leave you with this quote from Ben Greenho at the Center for American Progress that comes from a much more thoroughly researched article than Thorpe’s.

“Americans’ difficulty finding affordable housing is not attributable to immigration. If this difficulty was based on immigration, we would expect large increases in housing costs to be positively correlated with increases in the number of foreign-born workers in the labor force, since income is needed to pay for housing. That correlation does not exist. While the number of foreign-born workers has trended upward since 2014, it has not tracked with changes in housing costs. This is clear from data comparing house price growth to changes in the number of foreign-born workers in the labor force.”

Now, will someone remind Newsweek’s senior editor that we all know the housing crisis isn’t because of immigrants and that we know why it's happening? Oh, and before I forget, also remind him that pushing racist clickbait headlines won't change that. All he’s doing is creating an article that MAGA and racists will share as if it’s a legitimate claim when we know it isn’t.

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