Billionaire entrepreneur Peter Thiel supports the view shared by President-elect Trump and Vice President-elect JD Vance that immigration plays a role in driving up housing costs, calling it a fundamental economic principle.
In a recent interview on Bari Weiss’ Honestly podcast, Thiel, an immigrant to the U.S. himself, discussed the economic imbalances caused by immigration. “Simultaneously, he emphasized the importance of addressing the substantial economic distortions it causes.”
The PayPal co-founder referred to the theories of 19th-century economist Henry George, who observed that soaring real estate prices primarily benefit property owners.
“Real estate is highly inelastic,” Thiel explained. “With strict zoning laws, adding 10% to a city’s population might cause housing prices to jump 50%. Salaries might increase slightly, but not by the same percentage. While GDP grows, it becomes a windfall for homeowners and landlords, while the lower middle class and younger generations face greater struggles to afford housing.”
Thiel pointed out that this trend isn’t unique to the U.S.; similar patterns have emerged in the U.K., Canada, and other nations, with housing costs being a significant driver of inflation.
“Thiel noted that Trump and JD Vance have successfully highlighted this issue in the real estate market.”
While immigration isn’t the sole factor, Thiel argued it’s a key contributor. “When more people move into cities but new housing isn’t built due to zoning restrictions or high costs, prices rise sharply. This results in a massive transfer of wealth from young people and the lower middle class to older homeowners and landlords,” he said.
“There are reasons why people might be in favor of this, but there are also reasons why they might be against it,” Thiel added. “We frequently avoid talking about this fundamental economic principle.”
Vance, a former mentee of Thiel, raised similar concerns during the vice-presidential debate, claiming that immigration under the Biden-Harris administration has significantly contributed to rising housing costs.
“Competition for limited housing is one of the main reasons for increasing home prices,” Vance said. Under Kamala Harris’ leadership, the increase in undocumented immigration has coincided with these price surges.”
When a debate moderator asked him to provide evidence, Vance pledged to share data afterward. He later cited two studies and highlighted a statement by Federal Reserve Governor Michelle Bowman, who noted in May, “The influx of new immigrants into certain regions may cause rents to rise due to the current shortage of affordable homes.”
