Peter Thiel says Trump, Vance are right that immigration drives up housing costs

Billionaire entrepreneur Peter Thiel says President-elect Trump and Vice President-elect JD Vance were not wrong when they pointed to immigration as a driver of high housing costs on the campaign trail, suggesting the concept is basic economics.

During a recent interview on Bari Weiss’ “Honestly” podcast, Thiel noted that he is an immigrant to the U.S. himself, but said that “at the same time, I think one should somehow be able to talk about all the ways that it creates these incredible economic skews and distortions.”

The Paypal co-founder pointed to the theories of late 19th-century economist Henry George, who he said warned that when there are runaway real estate prices, the people who own real estate will make all the gains in a society.

“There’s something extremely inelastic about real estate,” Thiel explained. “Especially if you have strict zoning laws or things like this. The dynamic ends up being: you add 10% to the population in a city, and maybe the house prices go up 50% and maybe people’s salaries go up, but they don’t go up by 50% and so the GDP grows, but it’s a giant windfall to the boomer homeowners and to the landlords, and it’s a massive hit to the lower middle class and to young people who can never get on the housing ladder.”

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Thiel believes that is what has happened not only in the U.S., but in the U.K., Canada, and other countries. He pointed to how inflation has largely been driven by housing costs.

“I think in some ways, Trump and JD Vance did manage to shift the conversation a little bit to this real estate problem,” he continued.

“And again, I don’t want to blame it all on immigration, but if you just add more people to the mix, and you’re not allowed to build new houses because of zoning laws where it’s too expensive or it’s too regulated and restricted, then the prices go up a lot, and it’s this incredible wealth transfer from the young and the lower middle class to the upper middle class and the landlords and the old.”

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“There are reasons you might not want to do that. There are a lot of reasons you might want to do it,” Thiel told Weiss, adding, “This is just sort of a basic Econ 1 point we can’t even make.”

Vance, who was previously mentored by Thiel, was called out by a moderator during the vice presidential debate against Minnesota Gov. Tim Walz for saying that the surge in immigration during the Biden-Harris administration has been a major factor in rising housing prices in the country.

“Competing with Americans for scarce homes is one of the most significant drivers of home prices in the country,” Vance said. “It’s why we have massive increases in home prices that have happened right alongside massive increases in illegal aliens, alien populations under [Democratic nominee and Vice President] Kamala Harris’ leadership.”

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A moderator then asked Vance to cite the source of his claim, saying, “Senator, on that point, I’d like for you to clarify there are many contributing factors to high housing costs. What evidence do you have that migrants are part of this problem?”

Vance said he would provide the evidence on social media after the debate, and he followed through. The Ohio senator took to X, pointing to two studies supporting his claims.

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Vance also included a quote from Federal Reserve Governor Michelle Bowman, who said in a speech in May, “Given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents.’”