Immigrant locations and native residential preferences: Emerging ghettos or new communities?

Strong political movements voicing opposition to immigration are on the upswing. Does such potential antagonism translate into residential dynamics? We study whether natives fled from immigrant areas in reaction to the largest and fastest migration shock in the OECD. The inflow–causing the population of Spain to grow by 10% between 1998 and 2008–represented a largely new phenomenon, the size of which had not been factored into previous expectations, thereby providing quasi-experimental sources of variance. Our results show that immigrant inflows caused mild native displacement from denser, established neighborhoods, but also more real estate development in these areas. In parallel, both natives and immigrants were collocating in booming suburban communities, resulting in no changes to overall measures of ethnic segregation. In light of the results, we argue that whenever ethnic-minority arrivals spur the creation of new neighborhoods, conventional empirical methods overstate the degree of native flight.