How NIMBYs are helping to turn the public against immigrants

Overly simplistic as factors influencing housing prices not merely NIMBY-driven. But useful comparison between Canadian and American situations:

…The problem arises when governments effectively prohibit the supply of housing from rising in line with demand. Between 2012 and 2022, Americans formed 15.6 million new households but built only 11.9 million new housing units. As a result, even before the post-lockdown surge in migration, there were more aspiring households than homes in America’s thriving metro areas.

This was largely a consequence of zoning restrictions. Municipal governments have collectively made it illegal to erect an apartment building on about 75 percent of our country’s residential land. In large swaths of the country, there are households eager to rent or buy a modest apartment, and developers eager to provide them, but zoning restrictions have blocked such transactions from taking place.

This creates a housing shortage. You can house 32 families much more quickly and cheaply by building a single apartment building than by erecting 32 separate houses. To require all of your community’s housing units to be single-family homes isn’t all that different from prohibiting the manufacture of all non-luxury cars. In both cases, you end up with artificial scarcity and unaffordability.

If private builders were allowed to respond to rising demand — while the government ensured the provision of housing to those unable to pay market rents — we could have large increases in immigration without any uptick in housing insecurity. In our current reality, the rise in asylum seekers has coincided with a record spike in homelessness and persistently high housing costs. 

It is hard enough to sustain popular support for large-scale immigration when there aren’t major economic downsides to that policy. Add legitimate concerns about housing costs to perennial anxieties over cultural change, and it becomes difficult for even the most pro-immigration societies to avoid a nativist backlash. Or at least, this is what recent events in Canada suggest.

Why Canada is getting colder on immigration

Canada has long been considered an exceptionally pro-immigrant country. Yet it has struggled to sustain popular support for liberal immigration policies amid its deepening housing shortage. Canada’s experience therefore serves as a cautionary tale for American progressives: If we allow municipalities to suppress housing construction, then ridding our nation’s mainstream politics of Trumpian xenophobia and electing a vigorously pro-immigrant administration will not be enough to avert popular demands for restricting immigration. 

Until recently, Canada’s immigration politics were the envy of US cosmopolitans. In 2016, while many other nations were trying to repel Syrian refugees, the Canadian government couldn’t find enough displaced families to meet the public’s demand for sponsoring them. Since 2019, the country has welcomed more refugees than any other nation, and done so with minimal public outcry. 

Prime Minister Justin Trudeau sought to capitalize on his country’s multicultural openness by putting immigration expansion at the center of his vision of economic growth. Canada welcomed 471,550 new permanent residents in 2023, up from 300,000 in 2015.

And that figure does not include foreign students, temporary workers, and refugees, who together constitute an even larger group of new arrivals. In 2025 and 2026, the government aims to admit 500,000 new permanent residents each year.

But in recent months, the political sustainability of Trudeau’s plan has come into question, in no small part because immigration’s impact on housing costs has come under scrutiny. 

Rents have soared across Canada in recent years. From 1990 to 2022, the average rent for a two-bedroom apartment in the country increased at an average annual rate of 2.8 percent. In 2023, it rose by 8 percent. The government estimates that it will need to add 3.5 million extra housing units by 2030 to make shelter affordable. But a recent report from the Canadian Imperial Bank of Commerce suggests that this underestimates the housing shortage by 1.5 million units, a shortfall driven by an undercount of nonpermanent immigrants, who have been entering the country in massive numbers.

Trudeau has sought to promote housing construction in various ways. But his administration’s efforts have yet to offset the impact of years of highly restrictive zoning in many of Canada’s largest population centers.

As Canadians bid against each other for an inadequate supply of housing units, they’ve soured on immigration. 

In a 2022 poll from the Environics Institute for Survey Research, Canadians disagreed with the statement that there was too much immigration in their country by a margin of 42 points. One year later, that margin had shrunk to 7 points, the largest single-year shift in the survey’s history. Among Canadians who said immigration levels were too high, the most commonly cited reason by far was that immigrants drive up housing prices. 

In response to these changing political winds, the Trudeau government has sought to restrict admissions of international students while imploring universities to provide dedicated housing for their enrollees. But this minor concession to the nation’s restrictionist mood appears insufficient. The prime minister’s approval rating has sunk in recent months, with 64 percent of Canadians now disapproving of his performance. Meanwhile, Canada’s Conservative Party has ridden the housing and immigration issues to a strong advantage over Trudeau’s Liberals in the polls. 

Abundance is possible, but scarcity seems popular 

There are many parallels between the politics of immigration reform and those of housing policy. In both cases, countries have the power to swiftly increase their collective prosperity by tolerating some short-term disruptions. When cities let developers build more housing, they not only reduce rent inflation but also increase their tax bases, which makes it easier to fund robust social services. When rich nations let prime-age immigrants settle within their borders, they increase their productive capacity, which makes it more affordable to support retirees. 

And yet, in both of these policy areas, we routinely opt to make ourselves poorer for the sake of avoiding change. 

America does not need to choose between expanding immigration and reducing housing costs. But there is a risk that we’ll choose to do neither.

Source: How NIMBYs are helping to turn the public against immigrants