Unsurprisingly, the cost of living deters in-migration, all other factors held equal.[80]
One significant driver of the cost of living is housing costs. Like anything else, housing prices are driven by supply and demand. More desirable locations will have higher housing demand and thus higher prices. However, prices are also driven by supply. It is especially hard to disentangle cause and effect in the data we observe.
All else equal, higher housing prices will deter in-migration, but places where lots of people want to live will have high demand and relatively higher prices. Localities that artificially restrict housing supply through regulations will have housing prices that do not reflect the desirability of living there. As a pair of researchers note, “[I]f housing prices are above this cost in a given area, then the housing market is not functioning well—and housing is too expensive for all households in the market, not just for poorer ones.”[81] A 2013 study concurs, emphasizing the role of land-use regulations in raising the cost of living, which deters in-migration.[82]