Benjamin Couillard is a PhD candidate at the University of Toronto whose research looks at things like residential choice and housing supply. And in this recently published paper, he studies the causal effects of rising housing costs on fertility. Here's what he found when examining US Census Bureau data:

...rising [housing] costs since 1990 are responsible for 11% fewer children, 51% of the total fertility rate decline between the 2000s and 2010s, and 7 percentage points fewer young families in the 2010s. Policy counterfactuals indicate that a supply shift for large units generates 2.3 times more births than an equal-cost shift for small units. This analysis concludes that the supply of housing suitable for families can meaningfully contribute to demographic sustainability.

Intuitively, it makes sense that rational adults might consider where they would put a child if they had one, or had one more, and consider the cost of this incremental space. Housing is expensive in major urban centers. Perhaps it's no surprise that Canada, which is known for its broadly unaffordable housing, has fallen into the "ultra-low fertility" category.

But I think this fertility-housing relationship is an important one to call out when considering appropriate public policies. Housing is often viewed through the lens of what bad things will happen if we build it. That's why we do shadow studies, force stepbacks, charge development charges (impact fees), and the list goes on.

What is harder to grasp is what happens when we don't build new housing. Most — or at least many — seem to agree that not building enough housing hurts overall affordability. But what this study also demonstrates is that not building enough family-sized housing is bad for making babies!

This has all sorts of socio-economic repercussions, one of which is that a country now has to rely more heavily on immigration in order to offset a shrinking population base. It becomes a larger economic problem. When framed this way, it makes me wonder: why do we tax new family-sized homes the way we do?

An alternative approach to encourage more infill family housing might be to eliminate development charges, building permit fees, parkland fees, and as many other government fees as possible on all three-bedroom or larger homes. And the reason you would do this is because the economic and demographic cost of not building is even greater.

Based on the work of Couillard, we know at least one of the outcomes: more babies.

Cover photo by Lotus Design N Print on Unsplash

Benjamin Couillard is a PhD candidate at the University of Toronto whose research looks at things like residential choice and housing supply. And in this recently published paper, he studies the causal effects of rising housing costs on fertility. Here's what he found when examining US Census Bureau data:

...rising [housing] costs since 1990 are responsible for 11% fewer children, 51% of the total fertility rate decline between the 2000s and 2010s, and 7 percentage points fewer young families in the 2010s. Policy counterfactuals indicate that a supply shift for large units generates 2.3 times more births than an equal-cost shift for small units. This analysis concludes that the supply of housing suitable for families can meaningfully contribute to demographic sustainability.

Intuitively, it makes sense that rational adults might consider where they would put a child if they had one, or had one more, and consider the cost of this incremental space. Housing is expensive in major urban centers. Perhaps it's no surprise that Canada, which is known for its broadly unaffordable housing, has fallen into the "ultra-low fertility" category.

But I think this fertility-housing relationship is an important one to call out when considering appropriate public policies. Housing is often viewed through the lens of what bad things will happen if we build it. That's why we do shadow studies, force stepbacks, charge development charges (impact fees), and the list goes on.

What is harder to grasp is what happens when we don't build new housing. Most — or at least many — seem to agree that not building enough housing hurts overall affordability. But what this study also demonstrates is that not building enough family-sized housing is bad for making babies!

This has all sorts of socio-economic repercussions, one of which is that a country now has to rely more heavily on immigration in order to offset a shrinking population base. It becomes a larger economic problem. When framed this way, it makes me wonder: why do we tax new family-sized homes the way we do?

An alternative approach to encourage more infill family housing might be to eliminate development charges, building permit fees, parkland fees, and as many other government fees as possible on all three-bedroom or larger homes. And the reason you would do this is because the economic and demographic cost of not building is even greater.

Based on the work of Couillard, we know at least one of the outcomes: more babies.

Cover photo by Lotus Design N Print on Unsplash