Should migrants be “blamed” for rising house prices? Or should we set aside blame and acknowledge that population growth, whatever the source, has some negative impacts?
I recently had the good fortune of visiting Vancouver, a city where I used to live a long time ago. While still beautiful, it appeared to me almost unrecognisable: everywhere, high-rise buildings, each more futuristic and imposing than the next, were rapidly replacing the pretty wooden houses I remembered, and swallowing green spaces. In spite of this building frenzy, real estate prices in Vancouver have risen madly; houses now sell for about 1,000 Canadian dollars per square foot, making it one of the most expensive cities in the world to buy a property.
Looking at the data, it appears that the metropolitan area of Vancouver has gained over 650,000 more people compared to when I last was there two decades ago. It’s not just this particularly desirable city: the country itself gains hundreds of thousands of new residents every year. In Canada as in most other wealthy countries, after decades of below-replacement birth rates, the only reason the population is growing is international migration.
According to the law of supply and demand, migration-driven population growth creates more demand for houses and therefore leads to an increase in both building activity (supply) and prices. Except, according to the newspaper The Guardian, it does not.
Their case study is actually the Netherlands, where, the newspaper tells us, Migrants overpaying for substandard homes face blame for Netherlands housing crisis. That does sound doubly unfair. The inference is that, while both things are true – migrants are being ripped off and being blamed – the connection to higher housing costs doesn’t actually exist. According to The Guardian, it is an invention of the racist right-wing parties. It’s not because there are more people that rent costs more, it’s because… there aren’t enough houses. Except, “enough” is always relative to demand, and why is there so much demand for housing? Because the population keeps growing. And why does the population keep growing? Because of migration.
In the article, we are told that “the housing crisis is not a migration crisis … It is a crisis resulting from a series of poor policy choices, and overall, from a lack of enforceable legal recognition of the right to adequate housing.” Interesting. The “enforceable legal recognition of the right to adequate housing” doesn’t appear to have the same tangible usefulness, the life-saving materiality, of actual houses. Houses that cannot be willed into existence by a legal pronouncement: they need to actually be built, somewhere, by someone. The article itself suggests as much, as if it was an easy thing to do. However, the author does hint at environmental laws that might impede further building in the Netherlands, and that even some people on the political left argue to reduce migration. Meanwhile, we’re told that losing the cheap labour migrants provide would force Dutch people to work more and retire later (slightly lowering the standard of living and therefore consumption in one of the richest countries in the world isn’t even considered as an option).
Facing reality
So it is the migrants, after all? Let’s be real: where could new houses possibly be built in a country that already has – at over 500 people per square kilometre – one of the highest population densities in the world? A country that is chock full of humans and livestock, to the detriment of everything else. A flat, nearly treeless country that needs to import its building materials from abroad, because it can’t mine enough on its own soil. A country that already sits, for about a fourth of its area, below the sea level – and the sea level is rising.
The reason why the media struggle with what should be simple logic and basic economics might come down to the problems caused by the notion of “blame”. If it’s the migrants’ fault that something bad happens, it means that they have done something wrong. Therefore they are bad people, therefore they deserve to be the target of racism and xenophobia. Since this is to many people a very undesirable outcome, they consider it their responsibility to try and prevent it by writing things that make no sense, hoping that their readers will believe them.
It would be helpful in such cases to put morals aside and focus on policy instead. Of course, morals will always underpin politics. But a moral case could be made either way: that migrants must be allowed in because they are people in need who come with the intention of working hard and making a positive contribution, or that, when considering whether to move to a country that is already overcrowded and struggling with high prices, they should be expected not to put their selfish needs ahead of those of the native population. Morals aside, however, it is a fact that a shift in demand does lead to higher prices, and that unaffordable substandard housing constitutes a problem for most people, bar a few profiteers. Once we acknowledge that, and the implications of acting upon either supply or demand, or both, then we can make informed choices as a society.
Limiting migration does cause pain. But so does destroying the natural environment, the quality of life of residents, and potentially the fabric of society. A global redistribution of wealth is the best way to ensure people are able to enjoy a decent standard of living wherever they are, without needing to move to countries that cannot support any more humans, and should instead be striving to reduce their own populations. Wealth redistribution could also discourage speculation in real estate and the purchase of multiple homes per household, which also contribute to higher prices.
Whatever the moral case for migration, countries still need to make decisions about how many inhabitants they can support while protecting the environment, future generations, and whatever else they consider to be of value. If there is no affordable housing and nowhere left to build, it’s not racist to say: we are full.
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