During the early 2020s, a surge in immigration coincided with rising rents. Is the relationship causal? This study uses an area-based two-period difference model comparing 2014 and 2023. The unit of analysis is the public-use microdata area (PUMA). Because rents in one PUMA tend to affect rents in surrounding PUMAs, a spatial autoregressive model helps to distinguish local effects of immigration from cross-PUMA spillovers. In the most detailed specification, taking all spillover effects into account, a simultaneous 1 percentage-point increase in immigration in all PUMAs is associated with an average increase in native rent of 1.46 percent, along with a 0.65 percentage-point increase in the share of natives who are burdened by a high rent/income ratio. Immigration over this period may have accounted for a large proportion of the average real rent increase, but the precise figure depends heavily on modeled spillover effects.
[Full article forthcoming this fall in the peer-reviewed journal Cityscape.]