The Housing Crisis May Be Costing America Millions of Births

Conservatives have long warned about America’s demographic cliff. The United States, like much of the West, is not having enough children to replace its population. And while the right has been quick to blame declining religious faith, new research points to a more concrete obstacle: housing.

A working paper by Benjamin K. Couillard of the University of Toronto’s Department of Economics estimates that rising housing costs account for 51 percent of the decline in U.S. fertility. Had rents remained at their 1990 levels, the paper predicts that the United States would have seen an additional 13 million births between 1990 and 2020.

NIMBYism is a civilizational suicide cult.

To examine the relationship, Couillard built a detailed computer model of how people decide where to live, how much space they need, whether to live alone or with roommates or parents, and whether, and when, to start a family. He then fed the model U.S. Census Bureau data going back to 1990 and tested how those decisions changed as housing costs rose. And sure enough, the higher housing costs rose, the fewer babies Americans had.

The key finding was not simply building more housing, but building homes large enough for families. More small apartments encouraged people to move out of their parents’ homes, but did little to increase the birth rate. Homes with three or more bedrooms were far more effective at encouraging people to have children. The reason is straightforward: larger families need more bedrooms and more square footage. When those spaces become unaffordable, couples are more likely to stop at one or two children, or forgo having children altogether.

The same economic lens can help explain problems conservatives often describe as “ cultural” or “moral,” issues and continually cite as evidence of America’s deteriorating moral fabric.

Rent control and public housing rewards people for staying in smaller units rather than moving into a home with a spouse and starting a family. Overly generous welfare policies make dependency more attractive than work, undermining self-reliance and personal responsibility while encouraging the belief that the world owes people a living. Meanwhile, inflation and rising costs erode purchasing power, giving Americans, from struggling households to corporate CEOs, more incentive to cling to every dollar they can. Add a government bureaucracy constantly looking for another way to tax, regulate, and take a cut of someone else’s productivity, and holding on to what you earn becomes the default. That leaves less room for philanthropy and more room for the very greed conservatives condemn.

Before blaming declining religious faith for falling birth rates, conservatives should apply that same scrutiny to the economic conditions working against family formation. Faith can encourage marriage and family formation, but it is competing against economic conditions that make both harder to pursue. Pointing to higher birth rates among religious married couples does not settle the question. Rather, it tells us who is more likely to have children, not why others aren't having children they otherwise would.

The free market gives people choices, including the choice between virtue and its opposite. Government shapes the incentives behind those choices, and too often warps them through the laws and regulations it imposes. How can conservatives expect people to make better choices while ignoring policies that make those choices harder?

Conservatives can urge Americans to embrace family life, but they cannot, and must not, ignore policies that make it harder to afford. If they want people to choose marriage, children, and responsibility, they should fight the policies that turn those choices into financial penalties.

If conservatives want Americans to have more children, actually tackling affordability with the free market, seems like a good place to start.

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