What is the value of building a barrier between countries? While President Trump is fond of the refrain, “A country without borders is not a country at all,” the reality is more complex. The United States prospered dramatically from 1776-1990, a two century stretch during which it essentially had no physical barrier along its borders. Indeed, it’s not clear that a border wall does much at all to stop immigration. Unless a border is fully militarized, migrants will circumvent physical barriers with tunnels, ladders, or simply cutting holes in the fence (which currently happens roughly twice a day along the nearly 650 miles of fencing that exists along the southern border).
So is a border wall of no value?
Not so fast. I have long suspected that a border wall is ineffective at stopping illegal immigration, but that it is effective at deterring drug trafficking and property crime. Having lived in San Diego for seven years during the late 1990s and 2000s, the construction of border fencing was part of the daily news. I vividly remember seeing new housing developments sprout up in the South County, particularly nice new homes in Chula Vista, during the boom years. Real estate agents said that after the local border fence had been constructed, property crime had gone down, allowing the development of safe, new neighborhoods. Was it true?
Using data from Zillow.com, I compared the property values in four different regions of San Diego County. Zillow has median property values for 87 distinct zip codes throughout the county which I allocated into North County, Central County, South Coastal (Chula Vista), and Border (for the four zip codes in the dataset that include the US-Mexico border). All other factors that affect property values should be roughly equal among the four regions, which gives us a fair assessment of how growth rates in real estate values changed before, during, and after construction of the border fence.
The history is relatively simple. Before the year 1995, border fencing was being put up sporadically. Only after President Clinton established Operation Gatekeeper in 1995 did the construction of a major barrier, backed by enforcement agents, begin. And it wasn’t until 2006 that the Congress fully funded a larger border wall via the Secure Fences Act. Since it took time in both instances for funding and construction (and a change in perception of conditions), I used the years 2000 and 2008 as critical points in the time series data.
Zillow data begins with observations in April 1996, so I was unable to assess real estate values prior. Nonetheless, I was able to crunch the numbers for two series across three time periods: Pre-2001 (4/1996-1/2001), 2001-2008 (1/2001-12/2008), and Post-2008 (12/2008-11/2018). The two time series are (a) median value per square foot across all home types and (b) the Zillow Index for Single Family Residences. Here are the results in terms of average annual growth rates.
This is a straightforward result. Compared to Central San Diego neighborhoods, the border areas experienced much slower growth rates in property values before 2001. They equalized in terms of the Zillow Index and the median value per square foot ($) in the latter two periods. In fact, after 2008, there is a clear growth boost of 1/3rd of a percentage point in Border and South Coastal neighborhoods attributable to the border barrier.
Did immigration patterns change between the neighborhoods? Not at all. Did patterns of casual trespass change? Absolutely. It is difficult to see these results without appreciating that the value of a wall is in its deterrent effect on property crime or some other value-reducing transient behavior.