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I posted a while back about Canada, its housing crisis, and the political implications, but I want to talk a bit more about the biggest social/political trend in Canada recently: temporary residents.
In 2024Q2 Canada had 3 million temporary residents, amounting to 7% of our national population. Over half of this total arrived since 2020. I say it all the time, but it is hard to appreciate the speed and scale of this change. Canada was 73% white in 2016, 69% in 2021, and is about 61% now. The share of Canada's resident population from South Asia is only a few percentage points lower than the black share in the U.S. It was only 4% in 2006. Temporary resident inflows plus our normal immigration stream which is among the highest on earth had led to population growth of over 3% per year since the pandemic.
This has put huge strain on our housing market of course which is now among the least affordable on earth. However, one underappreciated implication of this migration is the impact on labour markets. The arrivals are disproportionately low skill and compete with young Canadians. Over the past year as economic growth has slowed significantly, unemployment has begun to rise (now 6.6%) but for 15-24 year olds its nearly 20%.
Housing unaffordability remains near all time highs. We now have 2023 crime statistics showing another increase and erasing all progress since the late 1990s. Canada's total fertility rate data for 2023 came out last week and shows a big drop to 1.26 -- the lowest ever recorded and well below peer countries.
Young Canadians are now 58th most happy in the world. Old Canadians are 8th.
The country continues to circle the drain.
North American housing crises are manufactured. There are no limiting resource constraints. Limited zoning limits the number of houses. Fewer houses means expensive houses. There are other factors at play, but zoning is the disproportionate cause for high prices across the continent.
Canada is facing the worst of it because of the immigration tsunami and a shoddy economy. But, that's like blaming the rain for leaks, when you've got a gaping hole in your roof. Any place in the world would be affected just as adversely, if housing policy was this hostile. Sydney & Honolulu are 2 such examples. It's tempting to think you can trudge along like coastal US cities. But, coastal USA gets around it through sheer brute force. The economies of coastal USA can sustain any level of dysfunction. Be it California's $100b HSR or NYC renting out the whole city's hotels as refugee shelters. Other places aren't so fortunate.
Canada needs to build a shit ton of housing ASAP. The country has practically infinite lumber and just imported a ton of low skill labor. Put up some 4+1s and this will be solved in under a year.
There is no mincing words. Canada's shambolic housing policy is a wealth transfer program from the young to the old. Canada's economy is not doing great, and you'd expect it to affect everyone's QOL equally. Through this (almost direct) wealth transfer, the liberal govt. has decided to let the young bear all the misery, while the geriatrics have the world's greatest retirement.
P.S: I'm Indian and Canada's current immigration policy is a joke even within India. To quote Trump, "They’re not sending their best. They’re sending people that have lots of problems, and they’re bringing those problems with us". India's best don't aspire to go to Canada. They go to the US, Urban India or Western Europe. The OP talks about housing costs and Canada's wider problems with productivity. I'll stick to that. Can always talk about immigration later.
YIMBY may be associated with the Left and all its social dysfunctions and annoyance these days, but the economic consensus on this one preceded the Left's adoption of YIMBY. Pretty much the only dissent you see, academically, is from the further Left, who ultimately wants only publicly owned housing and is offended by the sheer existence of market rate housing and, even then, their work sucks.
A century and a half ago, NYC had more than a million utterly impoverished immigrants dumped on it when the city and the immigrants were vastly poorer than they are today. This was no problem, from a housing perspective: They threw up a bunch of apartments and tenements and housing stayed under 15% of even the very low income of those immigrants.
A century and a half ago there wasn't welfare, was precious little in the way of building codes, and forget about occupancy codes -- the immigrants were crammed into those tenements.
Yep. It can be done, even when we were so much poorer 150 years ago. We could make something safer today, no doubt, for the vastly smaller numbers of people via our overall population and keep it affordable but we have, in addition to much greater wealth, much greater numbers of 'building codes'.
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In practice, it tends to be republicans who 'just build shit', though. They choose to screw over trees rather than existing homeowners in most cases, but build housing they do.
Some historically conservative states (mostly in the South) are pretty good about Just Building. Montana is probably the best example of a state which has recently reformed its laws to make it easier to Just Build, and they're pretty much a former red-tinged swing state.
So yeah, not wrong.
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