Room in the Kitchen for the Melting Pot: Immigration and Rental Prices

W01-7: This paper studies the response of the housing market to immigration shocks. I find a positive association between immigrant flows and changes in rents in the United States’ Metropolitan Areas. Following Card’s (1990) approach, I examine the changes in rental prices in Miami and three comparison groups of cities after the 1980 Mariel boatlift. This exogenous immigration shock added an extra 9% to the renter population in the Miami area in one year. I find that differential real rental prices increased from 8-11% between 1979 and 1981. By 1983 the rent hike differential was still 7%. Higher quality units were not affected by the immigration shock. Units in predominantly low-income Spanishspeaking areas experienced an extra 6% differential hike with respect to other lowincome units in the Miami MSA. Relative housing prices moved in the opposite direction from rents in the short run…