Mass Immigration and Soaring Prices: Lessons from Mexico City for Australia, By Brian Simpson and Chris Knight (Florida)
In a rare departure from its usual stance, The New York Times has acknowledged a harsh reality: mass immigration can drive up housing costs, pricing locals out of their own communities. The article, "As a Tourist Influx Makes Prices Soar, Hundreds Protest in Mexico City," published on July 5, 2025, details how an influx of affluent Western "digital nomads" has transformed Mexico City, sparking protests over skyrocketing rents and cultural displacement. This admission, amplified by Breitbart's coverage, challenges the uncritical embrace of mass immigration as an unalloyed good, revealing its potential to exacerbate economic inequality and social unrest. For Australia, grappling with its own housing affordability crisis and concerns about foreign influence, particularly from Chinese investment, the Mexico City case offers critical lessons. This post explores the economic and social impacts of mass immigration on housing, draws parallels with Chinese investment risks in the U.S. and Australia, and proposes actionable strategies for Australia to combat immigration to achieve national stability.
The New York Times reports that Mexico City's appeal as a hub for Western immigrants since 2016 has triggered a severe housing crisis. Neighbourhoods like Roma and Condesa, once affordable, have seen rents surge from $1,610 to $2,250 monthly between 2020 and 2025, driven by remote workers earning in stronger currencies like the U.S. dollar. A 2024 study cited in the article reveals that housing prices quadrupled from 2000 to 2022, with gentrified areas experiencing eightfold increases, displacing over 23,000 low-income families annually. The proliferation of short-term rentals, with over 35,000 Airbnb listings, has tightened the rental market, making it nearly impossible for locals earning an average of $220 monthly to afford housing.
This economic strain fuelled violent protests on July 4, 2025, with Mexico City residents defacing businesses and displaying signs reading "Gringo go home." The unrest reflects not only financial hardship but also cultural erosion, as historic neighbourhoods become "swanky developments" catering to foreigners. Mayor Clara Brugada has pledged to build affordable housing, but her criticism of the protests' xenophobic tone echoes former mayor Claudia Sheinbaum's openness to foreigners, highlighting the tension between economic realities and pro-immigration ideals. Mexico City's experience underscores a global truth: rapid, unchecked immigration can destabilise communities when housing supply fails to meet demand, regardless of race.
The Times' admission is not an isolated observation. Breitbart cites similar trends in Canada, where the Wall Street Journal reported in 2022 that mass immigration rendered middle-class neighbourhoods unaffordable, even for upper-middle-class residents. In the U.S., Axios noted in 2023 that the Biden administration's influx of over 210,000 migrants since 2022 worsened the housing crisis, with New York City alone spending $4 billion on shelters in 2024. New York Magazine bluntly stated that mass immigration is "bad for housing prices," while the Cato Institute's 2024 analysis confirmed that increased immigrant demand raises housing costs due to basic supply-and-demand dynamics. Steven Camarota of the Center for Immigration Studies testified that a 5% increase in a metro area's immigrant population correlates with a 12% rise in rent relative to income, with 2023 marking the largest rent increase in a decade.
Yet, a 2024 New York Times article offers a counterpoint, arguing that immigration's role in U.S. housing costs is overstated. Economists cited suggest that the affordability crisis began in 2020–2021, driven by native-born demand and zoning restrictions, before the 2022–2023 migrant surge. Susan Pozo's study, referenced by J.D. Vance, found correlation but not causation between immigration and rent increases from 2000–2012. While regulatory and inflationary factors contribute, the Mexico City case demonstrates that concentrated inflows of wealthier migrants, like digital nomads or foreign investors, can disproportionately disrupt local markets, a scenario Australia must heed.
The Mexico City crisis mirrors concerns about Chinese investment in the U.S. and Australia, as outlined in prior blog posts. The American Conservative warns of the CCP's acquisition of 384,000 acres of U.S. farmland, often near military bases, raising fears of espionage or sabotage. Breitbart details the USDA's National Farm Security Action Plan, which targets Chinese land grabs and bioterrorism risks, with states like Arkansas and Nebraska banning CCP-linked ownership. In Australia, Macrobusiness highlights the electoral influence of the Chinese diaspora and CCP efforts to sway policy through investments in real estate and agriculture. Both cases illustrate how foreign influxes, whether through immigration or investment, can strain resources and threaten sovereignty.
In Australia, the Department of Home Affairs reported 2,541,651 temporary visas (excluding tourists) in Q1 2025, with significant numbers from China and India, contributing to a 10% rent increase in cities like Sydney and Melbourne in 2024. Like Mexico City's digital nomads, foreign investors, particularly from China, have driven up property prices, with 13% of new homes in Sydney purchased by foreign buyers in 2024, according to the FIRB. This parallels the U.S., where Chinese control over supply chains like Smithfield Foods and Syngenta threatens food security, underscoring the need for Australia to address both immigration and investment pressures.
Australia can draw critical lessons from Mexico City's housing crisis and U.S. responses to Chinese investment to protect its economic stability and national interests:
1.Regulate Short-Term Rentals:
Mexico City Lesson: The explosion of Airbnb listings (35,000+) reduced housing availability, driving up rents. Mexico City's slow response exacerbated displacement.
Application for Australia: Impose caps on short-term rentals in high-demand cities like Sydney and Melbourne, where Airbnb listings exceeded 40,000 in 2024. Higher taxes on foreign-owned properties used for short-term rentals, as proposed in Victoria's 2025 budget, can preserve housing stock for locals.
2.Restrict Foreign Property Ownership:
U.S. Example: States like Arkansas and Nebraska have banned Chinese entities from owning farmland near strategic sites, with the USDA and CFIUS strengthening oversight.
Application for Australia: The Foreign Investment Review Board (FIRB) should tighten restrictions on foreign purchases of residential and agricultural land, prioritising affordability and security. Legislation modelled on the U.S.'s No American Land for Communist China Act could target CCP-linked buyers, preventing strategic acquisitions near bases like Pine Gap.
3.Boost Housing Supply:
Mexico City Lesson: Insufficient housing construction failed to keep pace with immigrant-driven demand, worsening affordability.
Application for Australia: Accelerate urban development by relaxing zoning laws for higher-density housing, as seen in U.S. projects like Pecan Square in Dallas. Federal and state incentives for developers, coupled with infrastructure investment, could add 50,000 homes annually, as proposed in Labor's 2025 housing plan.
4.Counter Foreign Influence:
U.S. Example: The American Conservative exposes CCP-funded groups like the Energy Foundation manipulating U.S. policy. Australia's Macrobusiness warns of similar risks in Chinese-Australian electorates.
Application for Australia: Strengthen the Foreign Influence Transparency Scheme to require disclosure of CCP-linked lobbying. Regulate platforms like WeChat to prevent censorship and data harvesting, ensuring diaspora communities are not exploited for foreign agendas.
5.Calibrate Immigration Policies:
Mexico City Lesson: Unchecked inflows of wealthier migrants fuelled inequality. The U.S. example of St. Louis shows immigration can revitalise communities when balanced with capacity.
Application for Australia: Align immigration levels with housing and infrastructure availability, prioritising skilled migrants who contribute to economic growth. A points-based system, tightened in 2025, could cap temporary visas at 1/2 million annually to ease urban pressure.
6.Promote Community Integration:
Mexico City Lesson: Xenophobic protests highlight the risks of social unrest when locals feel displaced.
Application for Australia: Expand civic education programs for Chinese-Australian and other migrant communities, emphasising democratic values and national loyalty, as suggested by Macrobusiness. Partnerships with community organisations can foster inclusion while countering CCP influence.
Critics may argue that restricting immigration or foreign investment could harm Australia's economy, which relies on migrant labour and Chinese trade. However, Mexico City's crisis shows that unchecked inflows can disproportionately burden locals, with rising costs outweighing economic benefits for most. Diversifying trade partners, as Australia did post-2020 with India and ASEAN, and boosting domestic housing can mitigate risks.
Another concern is that targeting Chinese investment or diaspora influence risks xenophobia, as seen in Mexico City's "Gringo go home" protests. Policies must focus on CCP-linked entities, not individuals, and be paired with inclusive integration efforts to maintain social cohesion, as demonstrated by successful programs in Canada's multicultural cities.
Finally, some economists, per the 2024 Times article, argue that regulatory constraints and inflation, not immigration, drive housing costs. While these factors matter, Mexico City's concentrated influx of digital nomads proves that immigration can exacerbate local crises, a risk Australia faces in its urban centres with foreign-driven property demand.
The New York Times' admission that mass immigration "makes prices soar" in Mexico City is a rare critique of a sacred cow, exposing how unchecked demographic shifts can destabilise housing markets and communities. For Australia, facing similar pressures from immigration and Chinese investment, the lessons are clear: regulate short-term rentals, restrict strategic foreign ownership, boost housing supply, counter CCP influence, calibrate and reduce immigration, and promote integration. These steps, informed by U.S. efforts to curb Chinese land grabs and Mexico City's struggles, can protect affordability and sovereignty. Australia must act decisively to ensure its cities remain liveable for locals, learning from global warnings that unchecked immigration and investment can turn opportunity into crisis.
"Mass immigration "makes prices soar" for locals, the New York Times admits in a story covering anti-immigration protests in Mexico City, Mexico.
The Times piece, titled "As a Tourist Influx Makes Prices Soar, Hundreds Protest in Mexico City," chronicles anti-immigration protests in Mexico City, where locals began rioting and defacing businesses and buildings over the weekend.
Buried in the Times article, though, is an admission that mass immigration to any one place spurs a housing crisis and a cultural transformation — all of which is difficult to undo.
"The outrage reflects the growing difficulty of affording a city that has become a hot spot for Western immigrants," the Times piece states:
The demonstration reflected the growing frustrations of many of the capital's residents, who have watched rents skyrocket and old neighborhoods turn into swanky developments as the city has become a major tourist destination and a base for many so-called digital nomads. [Emphasis added]
The Times made a similar admission in 2022 while covering rising housing costs across Canada as a result of mass immigration. The Wall Street Journal, that same year, acknowledged that mass immigration to America's northern neighbor had made once middle-class communities totally unaffordable for even upper-middle-class locals.
In 2023, while then-President Joe Biden was welcoming millions of migrants to the United States, Axios admitted that the scheme "makes U.S. housing crisis worse," noting that "cities simply don't have enough affordable homes, enough shelters, or enough money to help everyone who needs it, straining scarce resources and leaving thousands of people out on the street."
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Perhaps the most glaring admissions have come from New York Magazine, which simply stated that mass immigration is "bad for housing prices," and the libertarian Cato Institute, which not only admits, but openly cheers on skyrocketing housing costs due to mass immigration.
"The intersection of supply and demand determines housing prices, like all prices," Cato Institute researchers wrote in 2024. "When housing supply curves are upward-sloping, increased demand from immigrants will increase housing prices. Immigrants are people who want roofs over their heads, after all."
Last year, during a congressional hearing, Center for Immigration Studies Director of Research Steven Camarota told Congress that "a 5-percentage-point increase in the recent immigrant share of a metro area's population is associated with a 12-percent increase in the average U.S.-born household's rent, relative to their income."
"Adding very large numbers of people to the country must significantly impact housing prices by driving up demand for rental properties … the Census Bureau reports that the increase in rents in 2023 was by far the largest in the past decade," Camarota said.
https://www.nytimes.com/2025/07/05/world/americas/mexico-city-protest-gentrification.html
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