The 1990 Immigration Act: A Structural Shift
For most of the 20th century, U.S. immigration policy operated within capacity constraints. The Immigration Act of 1924 established national quotas that kept annual admissions relatively low. From 1925 to 1965, legal immigration averaged fewer than 200,000 people per year.[1] Even after the Immigration and Nationality Act of 1965 eliminated the quota system, annual admissions rose gradually - averaging roughly 330,000 in the 1960s, 425,000 in the 1970s, and 735,000 in the 1980s (elevated by IRCA legalizations in 1989-1990).[1]
The Immigration Act of 1990 changed this fundamentally. Signed by President George H.W. Bush, the law raised the overall annual cap on legal immigration from approximately 530,000 to 675,000, created new visa categories including the H-1B program, and expanded family reunification provisions.[4] The practical effect was significant: annual admissions surged to over 1 million per year by the mid-1990s, where they have remained for three decades.[1]
Average Annual Legal Immigration by Period
Source: Migration Policy Institute[1], Department of Homeland Security[5]
The Supply-Demand Imbalance
Housing affordability is governed by a simple equation: when demand grows faster than supply, prices rise. The relevant question is whether the rate of population growth - driven substantially by immigration - has exceeded the rate at which new housing can be built.
The data is clear. In every decade since the 1990 Immigration Act, the ratio of population growth to housing starts has been worse than during the low-immigration decades that preceded it.[3][6]
| Decade | Population Growth | Housing Starts | People per Start | Context |
|---|---|---|---|---|
| 1950s | 28.0M | 15.1M | 1.86 | Post-war baby boom + building boom |
| 1960s | 23.9M | 14.9M | 1.60 | Continued expansion |
| 1970s | 22.2M | 17.7M | 1.25 | Peak construction decade |
| 1980s | 22.2M | 14.7M | 1.51 | Savings & loan era |
| 1990s | 32.7M | 14.5M | 2.26 | Immigration Act impact begins |
| 2000s | 27.3M | 15.1M | 1.81 | Includes housing bubble + crash |
| 2010s | 22.3M | 9.8M | 2.28 | Post-crisis underbuilding |
Sources: U.S. Census Bureau[3], Census Bureau Housing Starts[6]
Key Finding
The 1990s saw the worst population-to-housing ratio since tracking began: 32.7 million people added against only 14.5 million housing starts- a ratio of 2.26. This was the first full decade after the 1990 Immigration Act took effect, and the decade in which the structural housing shortage began to accelerate.
Not Just Total Numbers: Where Immigrants Settle
The national-level data understates the pressure in specific markets. Immigration is heavily concentrated in a handful of metropolitan areas where housing is already scarce and expensive.[7]
The six metropolitan areas that receive the most immigrants - New York, Los Angeles, Miami, Houston, Chicago, and the San Francisco Bay Area - are also among the least affordable housing markets in the country.[7] This is not a coincidence. High immigration flows into supply-constrained markets create bidirectional pressure: more people competing for fewer available units, driving up both rents and purchase prices.
New York Metro Area
Receives more immigrants than any other U.S. metro - approximately 200,000 per year.[7] Median home price: $680,000. The metro added 1.2 million people from 2010-2020 but permitted fewer than 400,000 new housing units.[6]
Los Angeles Metro Area
Second-highest immigrant destination. Median home price: $950,000. Between 2010 and 2020, the metro area issued permits for approximately 250,000 new housing units against population growth of over 500,000.[6]
The Price-to-Income Ratio: A Generation Locked Out
The clearest measure of housing affordability is the ratio of median home price to median household income. In the mid-1980s, the national ratio was approximately 3.5x - meaning a median home cost about three and a half times median annual income.[9] Today, that ratio has climbed to approximately 5.0-5.3x depending on the measure used.[9]
This deterioration tracks closely with the post-1990 immigration surge. The ratio remained between 3.0x and 3.8x from the 1960s through the mid-1990s. It began climbing in the late 1990s - the first decade of sustained million-plus annual immigration - and has not returned to pre-1990 levels since.[9]
Median Home Price-to-Income Ratio
Source: Federal Reserve Economic Data, National Association of Realtors[9]
The 1924-1965 Precedent: What Happened When Immigration Paused
The United States has implemented immigration pauses before. From 1924 to 1965 - a period of 41 years - annual immigration averaged fewer than 200,000 people.[1] During this period, the country experienced some of the most significant economic gains in its history.
This is not to suggest that reduced immigration was the sole cause of these gains - the post-WWII economic boom, the GI Bill, unionization, and other factors all contributed. But the data demonstrates that reduced immigration correlated with a period of extraordinary improvement in housing access and economic mobility for working Americans.[10]
| Metric | Before Pause | After Pause | Change |
|---|---|---|---|
| Homeownership Rate | 45.6% (1920) | 61.9% (1960) | +16.3 pts |
| Real Median Income | $3,300 (1929) | $6,900 (1965) | +109% |
| Income Inequality (Gini) | 0.49 (1929) | 0.39 (1968) | -20% |
| Middle-Class Share (est.) | ~30% (1920s) | ~60% (1960s) | Doubled |
Sources: U.S. Census Bureau[3], Bureau of Economic Analysis[10]
The Post-War Building Boom
With immigration low and demand manageable, the United States built housing at an unprecedented rate after World War II. Levittown, completed in 1951, delivered 17,447 homes in just four years.[11] The combination of federal support (VA loans, FHA insurance), streamlined processes, and a labor market underpinned by tight immigration policy enabled homeownership to reach levels never before seen in American history.
Wage Effects: Competition in the Labor Market
Housing affordability is a function of both prices and wages. High immigration levels affect both sides of this equation: they increase housing demand (raising prices) and increase labor supply (suppressing wages).
Research by George Borjas of Harvard University found that a 10% increase in labor supply from immigration reduces wages for competing workers by 3-4%.[12] The effect is largest for workers without college degrees - the same demographic most affected by the housing affordability crisis.
The Congressional Budget Office estimated in 2024 that the recent immigration surge would slightly reduce average compensation per hour over the following decade, with larger effects in sectors with high immigrant labor concentration: construction, food service, and agriculture.[13]
Double Impact
High immigration simultaneously raises housing costs (through increased demand) and suppresses wages (through increased labor supply). The combined effect is a deterioration in housing affordability that is greater than either factor alone. A worker whose wages are suppressed by 3-4% while home prices rise 20-30% faces a compounding affordability crisis.
What Other Countries Have Done
Several countries with housing affordability challenges similar to the United States have adjusted immigration policies as part of their response:
Canada
After record immigration drove housing prices to crisis levels, Canada reduced its immigration targets by 21% for 2025 and signaled further reductions.[14] Prime Minister Trudeau explicitly linked immigration levels to housing capacity.
Australia
Reduced its permanent migration cap from 190,000 to 185,000 in 2023 and tightened temporary visa programs after housing affordability became a leading political issue.[14] Both major parties acknowledged the connection between immigration levels and housing supply.
New Zealand
Tightened immigration requirements and reduced visa approvals by 30% between 2023 and 2025 as part of a broader housing affordability strategy that also included construction incentives.[14]
The Arithmetic Is Simple
The United States currently builds approximately 1.4 million housing units per year.[6] Annual immigration adds over 1 million people, who - along with their households - require an estimated 400,000-500,000 housing units.[15] That means roughly one-third of all new housing construction is absorbed by immigration-driven demand before a single existing resident's needs are addressed.
With a current shortage of 3.8 million homes[2] and construction rates that have not significantly increased in decades, reducing demand is not optional - it is mathematically necessary. Building alone cannot close the gap if population continues to grow at current rates.
Policy Response
The Affordability and Immigration Act of 2026 proposes a 90% reduction in all immigration categories for 10 years:
- •Temporary Pause: 90% reduction across all immigration categories for a defined 10-year period
- •Purpose: Allow housing supply to catch up with existing population - closing the 3.8 million unit shortage
- •Historical Precedent: A similar pause from 1924 to 1965 correlated with the greatest expansion of the American middle class in history
- •Reassessment: After 10 years, immigration levels would be reassessed based on housing availability, wage data, and infrastructure capacity
This is not a permanent change. It is a capacity-based recalibration - a pause to allow the country to build the housing, infrastructure, and economic conditions necessary to support population growth without pricing out the families already here.