Middle Class

New Report: The Rise of Latino America

Joel Kotkin and Jennifer Hernandez — Fri, 28 Nov 2025 19:18:28 -0500

Executive Summary

In The Rise of Latino America, we argue that Latinos, who are projected to become America’s largest ethnic group, are a dynamic force shaping the nation’s demographic, economic, and cultural future. Far from being a marginalized group defined by oppression, Latinos are integral to America’s story. They drive economic growth, cultural evolution, and workforce vitality. Challenges, however, including poverty, educational disparities, and restrictive policies, threaten their upward mobility. Policymakers who wish to harness Latino potential to ensure national prosperity and resilience should adopt policies that prioritize affordability, safety, and economic opportunity over ideological constraints.

We urge policymakers to reject ideologically driven policies that hinder Latino progress, such as restrictive land use, costly climate mandates, and reduced personal mobility. Embracing policies that align with Latino aspirations rooted in work, family, and opportunity will not only empower this vital population but also strengthen America’s economic and demographic future in a competitive global landscape.

Introduction

Migration has shaped America’s history. The earliest migrants, the ancestors of the American Indians, arrived from far east Asia. Migration from the British Isles in the seventeenth and eighteenth centuries was voluntary but thousands of enslaved people also arrived here from Africa at the same time. The nineteenth and twentieth centuries saw waves of Germans, Italians, Russians, East Asians, Indians, and Jews.

Each group has faced sometimes brutal discrimination from the dominant majority. Many on the left see such racial prejudice as the American experience’s defining characteristic. From this perspective, Latinos are simply the latest group to live under an oppressive regime and whose lands “settlers” stole.

Yet the Latino experience is unique and far more uplifting. Latinos differ from Europeans: notably, they migrated to a country whose territory Anglo immigrants had conquered—in Texas initially and later across the entire Southwest—and taken from them.

But contrary to the narrative of “settler colonialism,” very few of today’s Latino residents can trace themselves to earlier settlers; the vast majority are recent arrivals. Indeed, the Southwest’s entire Mexican population in 1848 was barely 48,000. Yet the dominant academic and progressive narrative remains one of unending oppression and seizure of land. Latinos, writes one leftist writer, have “been forgotten by the nation” and have “nothing but their angers and their hungers.” Like the Anglos who settled areas seized from Mexico, they too want a piece of the pie, someplace safe and prosperous for their families to live and where they can acquire wealth.

At the same time there are some on the political right who fear America’s ongoing Latinization. Some influential right-wing theorists continue to hold the notion that Latinos are intrinsically inferior to whites and Asians. Others fear that the Latinos blend of Catholic and Indio culture makes them less digestible than earlier immigrants.

This report disputes both perspectives, and focuses instead on the progress, as well as the very real challenges Latinos face in America. The rise of Latinos does not constitute a departure from the American story; it is both wrong and dangerous to speak about them as if they were. Latinos, soon to be America’s largest ethnic group, are in a prime position to shape America’s future. Although the bulk are from Mexico, a large contingent comes from the Caribbean, Central and South America.

Read the rest of this report at: Civitas Institute.

Download the full paper

Authors

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Jennifer Hernandez has practiced land use and environmental law for more than 30 years, and leads Holland & Knight's West Coast Land Use and Environmental Group. She is a former longtime co-chair of the firm's national Land Use and Government Team. Ms. Hernandez divides her time between the firm's San Francisco and Los Angeles offices.

Researchers

Wendell Cox is a leading proponent of adopting land use and transport policies based on their effectiveness in improving the standard of living and alleviating poverty. He is principal of Demographia (Wendell Cox Consultancy) in the St. Louis metropolitan area. He specializes in urban policy, transport and demographics and is author of Demographia World Urban Areas and co-author of Demographia International Housing Affordability Survey. He is also author of Toward More Prosperous Cities, a framing essay on urban areas, urban planning, urban transport and sustainability.

Marshall Toplansky is an award-winning Innovation Professor of Management Science at the Argyros School of Business and Economics at Chapman University. He is a widely published and award-winning marketing professional and successful entrepreneur. Marshall co-founded KPMG's data & analytics center of excellence and now teaches and consults corporations on their analytics strategies.

Erika Ozuna is a senior consultant at Chapman University’s Center for Demographics and Policy. She currently works on multifamily and senior housing analysis and market studies throughout the country. Ozuna has over ten years of experience in the commercial real estate industry, including experience in all types of senior housing appraisals. Prior to her multifamily housing experience, Erika worked for seven years in the banking and investments fields, has conducted quantitative and qualitative research and analysis for numerous projects and entities, and was a high school teacher. Erika holds a M.P.P. in international relations and economics from Pepperdine University and a B.S. in business administration from the University of Texas RGV.

Photo: report cover and pages from the report, Civitas Institute.

The Rise of Latino America

Joel Kotkin and Jennifer Hernandez — Wed, 12 Nov 2025 19:18:28 -0500

In a recent focus group we held with 11 U.S. and foreign-born Latinos in Riverside, California, most of the participants expressed grave concerns about the breakup of hard-working and law-abiding families in what one participant called ICE’s “war” against Latinos. And yet, when asked if they were optimistic about the future, all 11 enthusiastically said “yes.”

Their responses reflected the broader patterns of progress and severe challenges we uncovered in an analysis of national data and on-the-ground reporting for our new report, “The Rise Of Latino America.” Even as President Trump reduces immigration flows, the country’s demographic and economic fate will be shaped increasingly by people with ties to Mexico, Central, and South America, who became the nation’s largest minority group in 2019. The key findings of our report, published by the Civitas Institute at the University of Texas, include:

Demographic Surge: Latinos have grown from 5% of the U.S. population in 1970 to 20% in 2023, accounting for 56.3% of population growth from 2010 to 2023. By 2060, they will drive nearly all net population growth.
Economic Powerhouse: The U.S. Latino G.D.P. reached $3.7 trillion in 2022, the world’s fifth-largest, growing at 4.6% annually and outpacing the national average. States like Texas and Florida see significant Latino economic contributions.
Geographic Dispersion: Latino populations are spreading beyond the Southwest to the Midwest, Southeast, and smaller metros like Pittsburgh and Nashville, reflecting economic opportunity-seeking migration.
Optimism Amid Challenges: Despite poverty rates (e.g., 29.6% for illegal Latino immigrants in California) and educational gaps, 75% of Latinos remain optimistic about achieving their “dream home” and the American Dream. They also value hard work (94% cite it as key to success).
Educational Progress and Gaps: Latino college enrollment has surged 372% since 1990, but only 16% earn bachelor’s degrees compared to 43% of whites, with lags in high-demand fields like technology.
Entrepreneurial Growth: Latino-owned businesses, especially in construction and food services, are the fastest-growing, employing 2.9 million workers with $620 billion in sales in 2019.
Policy Barriers: High-cost housing policies, climate-driven regulations, and anti-car mandates in states like California increase living costs and limit job access, disproportionately harming Latinos.
Policy Recommendations: We advocate for affordable single-family housing, lower regulatory barriers, sensible energy policies, and accessible transportation to support Latino priorities like homeownership, safety, and economic mobility.

Embracing policies that align with Latino aspirations rooted in work, family, and opportunity will not only empower this vital population but also strengthen America’s economic and demographic future in a competitive global environment.

The fate of Latinos will only grow more important to the American story as their impact is felt throughout the country. Until fairly recently, Latino influence was felt primarily in the Southwest, with those from the Caribbean concentrating in cities like New York, Chicago, and Miami. Today, the fastest-growing Latino populations are now in the country’s interior, from the mid-South to the Great Lakes, where hard work makes homeownership affordable in communities without the usual public disorder and underperforming public schools that are common in those governed by progressives and their allies.

Read the rest of this piece at: Real Clear Investigations.

Download the full paper

Authors

Photo: courtesy Civitas Institute.

Mamdani Heralds the Radical American City

Joel Kotkin — Fri, 07 Nov 2025 19:18:28 -0500

The greatest threat to the United States is self-created and centered in urban areas. Having survived the pandemic and the 2020 “summer of love”, America’s cities — most critically, New York — are adopting politics that seem designed to make the much-feared “urban doom loop” a reality.

Instead of facing up to their fundamental challenges in liveability and economic viability, the Big Apple and other cities such as Portland, Seattle, San Francisco, Los Angeles, Minneapolis, and Chicago are falling for full-spectrum progressives. In Tuesday’s local elections, Zohran Mamdani, a socialist running as a Democrat, handily defeated former Gov. Andrew Cuomo, who ran independently after failing to secure the Democratic nomination. Leftist have also scored recent victories in the smaller cities of Oakland, Cincinnati, Syracuse, Albany, and Buffalo.

It’s hard to see how politicians like Mamdani, following the Democratic Socialists’ platform, will abolish capitalism or implement the “social ownership” of all industry in a still profoundly capitalist country. People, at least outside the bluest cities, may not respond well to progressive ideas about taxing “white” areas, one of Mamdani’s proposals, or regarding the very existence of the NYPD as an obstacle to “queer liberation”.

His defenders insist Mamdani has disavowed such views since he aired them in the febrile Covid-and-BLM era. But his statements from back then, which wasn’t that long ago, give every impression of sincerity; Mamdani — unlike, say, his failed opponent Andrew Cuomo — comes across as an ideological true believer if ever there were one.

The bigger problem is that this abrupt Left turn comes as cities are losing their primacy. Today, core cities account for just 15% of the US population, down from a quarter in 1950. Meanwhile, the suburbs and exurbs have seen explosive growth — accounting for 86% of the metropolitan population, up from 13% at the outset of World War II. Suburban and, especially, exurban dominance of metropolitan growth has only accelerated in recent years.

More critical still, cities are losing their once-dominant economic role. In 2019, before the pandemic, office construction was a third of the rate of 1985 and half that of 2000. Even large multinational firms, historically anchored in cities like New York and Chicago, are rethinking their real-estate strategies. According to the Financial Times, many companies are planning to reduce their office footprints by 10% to 20%. A study from the University of Chicago found that as much as a third of the urban workforce could operate remotely.

It is precisely these conditions that have helped create a new urban demography favourable to far-Left city politicians like Mamdani. Between 1970 and 2000, notes the Brookings Institution, middle-income areas in core cities dropped 23%, down from nearly half, while the majority lived in low- or very-low-income areas. Job losses in manufacturing and middle management, notes MIT economist David Autor, were “overwhelmingly concentrated in urban labor markets”.

The Big Apple, for example, has lost some 76,000 middle-income jobs since 2020, while upper-income and low-income jobs have grown. This has paralleled the exodus of middle- and working-class ethnics — Italians, Irish, Jews, African Americans, Puerto Ricans — into the suburbs, particularly those with lower prices. Their departure is a blessing for the professional-class Left that backs Mamdani (while remaining middle- and working-class voters largely continued to back Cuomo to the bitter end).

Burdened with astronomical college debt, these high-education-but-low-wage voters constitute the vanguard of the far Left in many cities. They have largely adopted radical positions hostile to Israel and are seen as threatening to Jews, especially older ones, who once played a dominant role in the city politics.

Onetime rapper and Hollywood nepo baby Mamdani knows well how to appeal to this emergent class. His high-priced proposals for free childcare may seem family-friendly, but many of these voters are unliikely to have children (a majority of Manhattanites are single and have never been married). Socialist campaigners thrive in those places that have far fewer children — gentrified sectors of Queens and Brooklyn, Chicago’s near northside and trendy swaths of west LA. Those who march under the banner of LGBTQ also play an outsized role in these movements. Mamdani, despite his Muslim background and pro-Palestinian bona fides, romped in heavily gay-friendly parts of Manhattan, Brooklyn, and Queens

What disturbs the young professional class most appears to be high rents; Gotham takes the highest share of income for housing of any US big city. Mamdani’s programs — rent freezes, free buses, eviction restrictions, and the like — are designed to allow urbanites without the means to remain in the city, rather than join those moving to less costly cities to fulfill their dreams.

Some Leftist pundits see this class-based approach as the path to power, and even as the better substitute for the identity-based politics that dominated progressivism beginning a decade ago. High prices mean that coastal metropolises now suffer the lowest adjusted incomes, even as incomes in the less costly middle of the country remain above the national average. The thinking goes that, by running on “affordability” for this educated precariat, Democrats can regain their electoral footing after the thrashing they received in 2024.

Other economic pressures are radicalising the hipsters. They face a job market that is getting tougher — barely half of workers under 30 have full time jobs — even for those with expensive advanced degrees. Their jobs are increasingly threatened by the rise of artificial intelligence, including in finance, business services, and even “creative” professions that historically have clustered in cities.

Cities, of course, can fight back against these trends by developing policies that encourage urban economic growth, something barely mentioned in the DSA and other Leftist forums. Through reasonable taxation, less regulation, and the nurturing of local high-wage industries, from light manufacturing to video production, an early generation of practically minded urbanists helped restore order and growth. Mayors Rudy Giuliani and Michael Bloomberg in New York, Bob Lanier and Bill White in Houston, Richard Riordan in Los Angeles, Ed Rendell in Philadelphia and Steve Goldsmith in Indianapolis showed how cities can come back.

“High-education-but-low-wage voters constitute the vanguard of the far Left in many cities.”

Today’s urban politics, at least for now, make such a revival unlikely. Chicago’s Brandon Johnson, in office since 2023, was elected by a very Mamdani-like coalition of poor minorities, public employees, and hipster whites. Under Johnson’s steady misrule, schools deteriorate even as he pushes through big raises for teachers and other public employees, leaving the city with an extremely high pension debt.

Even where reformers have triumphed this decade, as in San Francisco and Seattle, radical forces appear to be once again ascendant. Long a favoured destination for college-educated migrants, Seattle during the 2020 riots shut down for weeks and even spawned something of a mini-Havana near its downtown. The city suffers from stubbornly high office-vacancy rates, large numbers of empty stores, and business flight. Crime is down, but hardly back to its pre-2020 levels. The George Floyd Plaza, meant to be some sort of public shrine, remains largely desolate and threatening.

In Portland, another city still reeling from the effects of 2020, socialists are also ascendant, having displaced Republicans as the city’s essential second party, and one with all the momentum. As in Seattle, the local progressives seemed reluctant to police even violence-prone groups like antifa.

Just recently, New York Times veteran Nicholas Kristoff blithely dismissed Trumpian assertions about Portland as a crime-cursed dystopia, suggesting that “hell does not serve Pinot Noir this good”. Of course, not everyone in these cities loves the helmeted kids in black, notably those who have suffered their attacks, including the Seattle police union.

Much the same process appears to be taking place in Minneapolis, which suffered massive disorder during the “summer of love”. There, Mayor Jacob Frey, after eight years, is deeply unpopular and could lose out to his socialist challenger, Omar Fateh. The race was too close to call as of this writing.

Radical realignment is also unfolding in San Francisco, where since 2020, the city had tacked to the center. Once united in opposition to the progressives, the moderates are now increasingly divided. Now the city’s Board of Supervisors may have a DSA majority within a year or two.

President Trump deserves some blame for the socialist tide. He may well have saved the career of Los Angeles Mayor Karen Bass, who impressed few during last year’s fires and continues to disappoint, as the city’s performance in rebuilding has been abysmal at best. Its economy may be largely moribund, losing companies at a rapid clip. But Bass’s fervent attacks on ICE agents have helped her galvanize progressive support.

Is this the denouement of great cities? Even under socialist rule, big cities like New York will continue to attract young professionals, globe-trotting elites, and cultural creators, as well as some immigrants. In New York, while the overall population has declined, ultra-wealthy residents, boosted by the stock market, continue to spend lavishly at the city’s often absurdly expensive restaurants. Similarly, tourists continue to flood in, gawking at the bright lights, street characters, and remarkable cultural assets built by earlier generations.

Yet over time, socialist rule may make it impossible for big cities to finance their current costs, much less elaborate schemes for redistribution. Trump and the congressional GOP are unlikely to give much help with mass transit or to fund new city services. And there remain definite limits to what the rich — notably, those who earn and not just inherit their wealth — will absorb in terms of taxes and public humiliation.

It’s hard to see how cities like New York can expand spending without keeping these people. Between 2011 and 2021, New Yorkers with more than $1 million in adjusted gross income averaged 0.7% of all tax filers, but paid 42.4% of municipal personal Income Tax. Between 2018 and 2022, the city lost some $10 billion in revenues just to south Florida. Even Andrew Cuomo vowed to head to the Sunshine State in case he lost, which, he did.

On the other hand, socialist wins could prove a boon for places like Palm Beach, Fla., which have become beacons for people leaving places like New York and Chicago. Dallas is developing a stock exchange to rival Wall Street and is eyeing a Mamdani mayoralty as an ideal marketing device.

Some conservatives might celebrate the radicalisation of cities and salivate at the prospect of hard-Left control of the Democratic Party. But they ignore the underlying forces boosting socialism, notably the cost of living and diminished employment prospects for the young, which could also spread beyond the radical cities. Rather than a boon to conservatives, the rise of the radical city constitutes a loss for the country, and can be reversed only by a rebirth of pragmatic reason.

This piece first appeared at: UnHerd.

Photo: Marco Verch via, Flickr, under CC 2.0 License.

The Catholic Model for a Post-Protestant America

Aaron M. Renn — Thu, 30 Oct 2025 17:40:58 -0400

In my book Life in the Negative World, I noted that unlike minority groups, American white Protestants had not found it necessary to create their own social institutions to sustain their religion and way of life because the mainstream institutions of society were de facto already designed around that.

As America has secularized, and these institutions have become explicitly de-Christianized or otherwise reoriented to other ends, it becomes incumbent on evangelicals to build their own infrastructure.

I suggested that one potential source of inspiration could be early 20th century Catholicism. America was basically an anti-Catholic country prior to World War II. Catholics of that era were also large in number and heterogeneous in origin. This makes them a better fit than looking at more niche minority groups.

I’ve been reading a new book called Crabgrass Catholicism by Stephen M. Koeth, which is about the suburbanization of Catholics in New York. I’ll be writing a full review of the book, but one thing it provides is a picture of what urban Catholic life looked like in early 20th century America. There’s nothing groundbreaking here, as it’s included mostly to provide the backstory to the author’s primary focus, but it can help us get a sense of what that was like.

Koeth writes:

It was European immigration from the 1820s to the 1850s that first made the US Catholic Church a highly urban and ethnic institution. In an era of rapid urbanization Catholic immigrants built American city life by fusing the neighborhood with the ethnic parish which was dominated by its priests and religious sisters, centered on the church and school, and bound together by its communal worship and devotions. At the same time, these immigrants built an entire parallel Catholic world - what John McGreevy has labeled as Catholic “milieu” - of educational, social, and service institutions to rival Protestant and secular peers….More than any other element of this parallel world, it was the parish school that became the “hallmark of American Catholicism.”

Here we see the creation of parallel institutions. These were fused with particular ethnicities. Catholicism was thus one factor that distinguished these communities as ethnic groups. While there were geographic parishes, there were also many “national” parishes designated for particular ethnic groups. Even within a geographic parish, practices might be heavily inflected by particular ethnic practices. For example, the Irish and Italians approached Catholicism very differently. Different ethnic groups might prefer to venerate their own saints. And so on.

The highly ethnicized nature of these Catholic parishes suggests that evangelical groups could not replicate them precisely. White evangelicals aren’t and do not think of themselves as an ethnic group, and despite what you might hear, evangelical churches are rarely monolithically white, even in the suburbs. Urban evangelical churches are often very diverse.

Read the rest of this piece at Aaron Renn Substack.

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker and writer on a mission to help America's cities and people thrive and find real success in the 21st century. He focuses on urban, economic development and infrastructure policy in the greater American Midwest. He also regularly contributes to and is cited by national and global media outlets, and his work has appeared in many publications, including the The Guardian, The New York Times and The Washington Post.

Photo: Catholic parish school in Long Beach, New York via Wikimedia, under CC 4.0 License.

How to Create the New American Middle Class

Pete Saunders — Fri, 24 Oct 2025 20:18:38 -0400

Remember the term “social contract?” It’s a term that’s been slowly gaining stream in recent years, but one that’s always been at the front of my mind, especially when it comes to cities. Simply put, our nation has been operating without a social contract now for decades, and that has a lot to do with our political, social and cultural issues today.

The definition of “social contract” will vary, but it usually means there is an implicit agreement between government and institutions and the public. Government and institutions agree to provide certain policies and services that allow people to prosper, and the people agree to, well, not rebel. Seriously, the people will often agree to sacrifice some individual freedom for state and institutional services.

The prosperity that followed World War II in America represented a unique time in our history, in world history, and led to the establishment of a unique American social contract, especially in economic terms. Essentially, with Europe’s economic powers recovering from the Depression and a devastating war, America took on the role of being the world’s economic and political superpower. America helped rebuild Europe. Yet America also led the world in manufacturing and industrial production when other nations could not. That was at the heart of the social contract that was established.

There were many facets to the post-WWII social contract. The G.I. Bill enabled veterans to establish their post-war lives – go to college, get generous terms for mortgages. Federal support for unions, which would’ve been unheard of in the first half of the 20^th century, was especially strong as America became the world’s manufacturer. A happy and plentiful workforce, employed by booming industrial corporations, were supported by unions that ensured their gains. You could also include interstate highway development and the expansion of suburbia as elements of the social contract of the era.

That began to fray in the late ‘60s and early ‘70s. I won’t go into much detail here, but a period that saw political and social upheaval in the U.S., troubling economic issues due to rising energy prices and shortages, rampant inflation and the rise of other nations as they returned to the economic world stage, changed the American calculus.

By the 1980’s a split was becoming evident in the American social class structure. Upper-middle class people, the professional workforce I usually call the “salary class”, got a boost in the changing world. Improving technology heightened their production, and they were able to huge advances in computing technology, finance, medicine and health care, and more. Meanwhile, the lower-middle and middle classes, or what I’ve called the “wage class”, struggled with changes in the automation of manufacturing facilities, as businesses sought to reduce costs and lower prices on goods.

From my perspective, growing up in the 70’s and 80’s in the Midwest, I felt the loss of a social contract, without a new one replacing it.

So here we are today, after a tech boom and bust, a housing bubble that burst, continued economic growth without corresponding wage growth at all levels, and we have a societal dilemma now. Over the years I’ve viewed improving cities as one part of the reimagining of the middle class. I’ve written about this many times over. But now the moment seems to particularly demand it.

I wrote recently about the Economic Innovation Group’s proposed wage subsidy as a way to get our low-wage workforce on a course toward the middle class. But it turns out EIG has far more ideas than just a wage subsidy. They have a larger worker policy program. In EIG’s Agglomerations Substack, they rolled out a seven-point plan designed to strengthen and stabilize all segments of the American workforce.

Read the rest of this piece at The Corner Side Yard.

Pete Saunders is a writer and researcher whose work focuses on urbanism and public policy. Pete has been the editor/publisher of the Corner Side Yard, an urbanist blog, since 2012. Pete is also an urban affairs contributor to Forbes Magazine's online platform. Pete's writings have been published widely in traditional and internet media outlets, including the feature article in the December 2018 issue of Planning Magazine. Pete has more than twenty years' experience in planning, economic development, and community development, with stops in the public, private and non-profit sectors. He lives in Chicago.

Photo: Ken Mattison, composite of photos from album of People Working, via Flickr, under CC 4.0 License and CC 2.0 License.

The Masses and the Market

Joel Kotkin — Fri, 03 Oct 2025 20:28:38 -0400

Western liberalism is in decline, challenged by rising authoritarianism on the Right and the Left. Since January 2025, Trumpism is generally perceived as the greater threat by American liberals, but the political power of the progressive Left is moving beyond its traditional redoubts in the media and academe. And for the time being, liberals are struggling to mount a coherent response.

By “liberals,” I mean those—from the Reaganite Right to the social-democratic Left—who value the basic institutions of Western society: electoral government, a free press and academy, an independent judiciary, separation of church and state, private property, and a market-based economy with a safety net. The progressive Left, on the other hand, sees these institutions as obstacles to be overcome or destroyed in pursuit of a revolutionary agenda designed to completely reorder American society. As former The New York Times opinion writer Pamela Paul argued in 2023:

In an increasingly prominent version of the progressive vision, capitalism isn’t something to be regulated or balanced, but is itself the problem. White supremacy doesn’t describe an extremist fringe of racists and antisemites, but is instead the inherent character of the nation.

And once one gives up on capitalism and the virtues of liberal institutions, assaults on equality under the law, basic property rights, and free speech inevitably follow. As two German conservatives have noted, today’s progressives embrace a “political ideology that questions the foundations of pluralism and democracy,” and favour a post-national “politics of identity and minority entitlements.”

This assault on capitalism and markets may yet be critical to the ascendency of progressives as a growing share of popular opinion shifts in their favour. According to a 2020 Edelman report, “56 percent of respondents [in 28 countries surveyed] agreed that capitalism ‘is doing more harm than good in its current form.’” More than four-in-five worry about job loss, particularly from automation. Rising inequality and a more general fear of downward mobility have boosted US support for expanded government and greater income redistribution, with a majority under forty strongly in favour of limiting wealth.

This is no longer just a call for reforming the existing system. Even in the US, a majority of young people are embracing socialism as a superior economic model. A recent survey of Europe found that “fewer than six in ten young Europeans believe that democracy is the best form of government. One in five say they would support authoritarian rule under certain circumstances. And only 6% believe their political system functions well.” According to political scientist Yascha Mounk, “signs of democratic deconsolidation in the United States and many other liberal democracies are now similar to those in Venezuela before its crisis.”

The Old Left and Progressive Violence

The Democratic Socialists of America (DSA) favour a mass-mobilisation model of politics, inspired by historical examples like that of Chile’s Salvador Allende, and this approach seems to be bearing electoral fruit. In New York, DSA member Zohran Mamdani looks likely to win the race for New York City’s mayoralty in November. Mamdani is the latest in a line of likeminded figures to rise to power in cities like Los Angeles, Chicago, and Oakland (possibly soon to be joined by Minneapolis and Seattle). These politicians reject liberalism and capitalism in favour of a massive tax on the “aristocracy,” intrusive rent controls, city-owned grocery stores, free transit, and radically higher minimum wages, policies that are likely to deepen rather than alleviate America’s economic woes.

The late Michael Harrington, who was something of a personal mentor to me, co-founded the DSA. He embraced the reformist, fiercely anti-communist socialism pioneered in the last century by the likes of Karl Kautsky and Eduard Bernstein in Germany. In the US, this tradition informed the politics of men like Eugene Debs and Norman Thomas as well as a group of pragmatic mayors known as “sewer socialists,” most notably in Milwaukee. Mike’s true passion was helping the poor and the working class—a reflection of his early embrace of Catholic values (as a young man, he joined the Catholic Worker movement, although he later became an atheist).

But modern progressivism, the late historian Fred Siegel noted, is a more elitist movement, the roots of which can be traced to Bismarckian Germany and Wilsonian America. Progressives hope to see a “revolt against the masses,” and in the West, arguments justifying elite control have come naturally to radical intellectuals: “Who else but intellectuals,” asked sociologist C. Wright Mills, “are capable of discerning the role in history of explicit history-making decisions?” Such hierarchical notions would probably not have appealed to politicians of the postwar Left like Clement Attlee, Australia’s John Curtin, New York’s Fiorello LaGuardia, California’s Pat Brown, or Minnesota’s Hubert Humphrey.

Mamdani and the growing coterie of elected progressives are not looking to replicate the democratic socialism of Harrington and Debs. Nor are they looking to replicate the Swedish social-democratic model, which draws its wealth from a vibrant market economy. The models embraced by the DSA and other progressives celebrate the kind of Third World Marxist radicalism once epitomised by Kwame Nkrumah (from whom Mamdani got his middle name), Che Guevara, Fidel Castro, and Hugo Chavez. Today, this manifests in support for Palestinian terrorism and increasingly naked expressions of raw antisemitism that would have horrified Mike Harrington were he alive to see it.

As support for liberalism wanes, support for political violence is being normalised on the Left and the Right, particularly among the young. A recent report found that nearly a third of all Americans—and 56 percent of those left-of-centre—told pollsters that the assassination of President Donald Trump would be at least “somewhat justified.” Almost as many feel the same way about Elon Musk. A growing online culture has made a folk hero of Luigi Mangione, the man accused of assassinating healthcare executive Brian Thompson.

In this Bolshevik worldview, no compromise with the enemy is possible, a grave reversal of normal politics that is also increasingly evident on large parts of the MAGA Right. Remarkably, many progressives and even mainstream Democrats have been reluctant to denounce the violence of modern street-fighting groups like Antifa. NPR’s political correspondent Mara Liasson even compared them to the troops who stormed the Normandy beaches.

Radicalism and the Family

Many of today’s activists seem to be driven by their own cultural anxieties and psychological needs rather than by economic concerns, and a driver of their radicalisation may be the decline of the family. When Hubert Humphrey and Harold Wilson represented the Left during the 1960s, Western democracies were still overwhelmingly familial societies. Although Marx and—particularly—Engels denounced marriage and monogamy, most moderate socialists embraced policies that encouraged family formation. They certainly never adopted anything like the anti-family doctrines are now prevalent in many feminist, gay, and transgender activist circles.

Back then, the liberal and social-democratic goal was not to undermine the family, but to provide opportunities for advancement and security into old age. Without a strong family structure, individuals can feel adrift, which makes them susceptible to manipulation and more likely to turn to the state for aid and comfort. As traditional familialism has diminished, a generation has arisen that is isolated and disconnected. A new Institute for Family Studies analysis found that, in 2020, one-in-six women remained childless by the time they reached the end of their childbearing years, up from one-in-ten in 1980. The percentage of “child-free” women is expected to rise. It is now estimated that 45 percent of women aged between 25 and 44 will be childless by 2030.

There are around 44 million single women in the US today. This makes them a larger voting bloc than African-Americans (34.4 million), labour-union members (14.3 million), or college students (more than 19 million). Progressivism across the West—including in the UK—is led by a radical vanguard of single women and non-binary men. In Canada, according to a 2020 poll, women favoured the Liberals by two-to-one while men slightly went to the Conservatives.

This shift has occurred as growing numbers of people on the Left reject traditional notions of family and gender. A 2023 Gallup poll found that over 28 percent of Gen Z women identify as LGBTQ+, more than twice the rate for Millennials and almost three times the figure for Gen Z men. Progressive women are also increasingly unlikely to have offspring. According to a recent NBC poll, women aged 18–29 who voted for Kamala Harris in 2024 rank having children twelfth out of thirteen elements in their “personal definition of success.” Male Donald Trump voters in the same age cohort rank having children first. Unsurprisingly, the fertility gap between progressives and traditionalists, particularly religious traditionalists, has continued to widen since this trend began in the 1980s.

Economic Drivers

Cultural shifts may have propelled the progressive movement forward, but economics could prove to be its ticket to power. Growing pessimism, particularly among the young, provides opportunities for disruptive illiberal politics on both the Right and the Left.

A new Wall Street Journal-NORC poll found that the percentage of Americans who believe they have a good chance of improving their standard of living fell to 25 percent, a record low in surveys dating back to 1987. Nearly seventy percent of respondents said they no longer believe in the American Dream or never did—the highest level in nearly fifteen years of surveys. Negativity was particularly pronounced among Democrats, with ninety percent holding a negative view of the future, almost twice as much as Republicans.
Since the 1970s, disillusioned working-class voters have moved to the Right, and since the mid-2010s, they have increasingly embraced the populist New Right in the US and Europe. Their beef is not with property rights or markets but with firms that offshore jobs and import unskilled migrants. Remarkably, the Ohio Teamsters even endorsed Vivek Ramaswamy in that state’s gubernatorial race. As a result, the progressive base now mostly consists of educated professionals who have traditionally been protected from the economic dislocation produced by liberal trade and immigration policies.

But in the emerging AI-driven economy, many college graduates now face the prospect of a difficult future. Around forty percent of recent US graduates are underemployed and working in jobs where their college credentials are essentially worthless. Rates of homeownership among the young are far lower than in the past. Many younger workers face a world in which “good” jobs are disappearing, even as they try to cope with rising rents and exorbitant tuition fees. Artificial intelligence is likely to accelerate this trend, with educated workers making up a growing percentage of the long-term unemployed.

Eighty-two percent of Millennials fear that AI will reduce their wages. According to McKinsey, at least twelve million Americans will be forced to find new work by 2030.
Even the “geeks” are finding themselves vulnerable to what economists call “skills-based technological change.” Tech firms like Salesforce, Meta, Amazon, and Lyft have announced major cutbacks in their white-collar workforce, and these positions are unlikely to return. Within months of AI’s emergence, freelance work in software declined markedly, along with pay. And this displacement will not be restricted to Silicon Valley. Many skilled professionals, including those in finance and even in “creative jobs”—actors, writers, and journalists—could be threatened by AI. Over time, we may find that no power on Earth is more fearsome than what one Marxist scholar called “the swelling population of college graduates caught in a vise of low-paying jobs and obscene amounts of debt.”

The Impact of Climate Catastrophism

The progressive embrace of climate catastrophism reinforces the new class dynamic. As Ruy Teixeira and others have pointed out, many working- and middle-class people do not embrace a climate policy targeting the blue-collar “carbon economy.” In an article for the environmentalist magazine Breakthrough Journal, Ted Nordhaus and Alex Smith argue that climate policies have created “a class politics in which egalitarian elites, in the academy, NGOs, philanthropy, and the knowledge economy, wage economic war against the working classes.”

In places where the green regime has been ascendent—California, Canada, Australia, Greece, Germany, France, and the United Kingdom—climate policies tend to create high levels of “energy poverty.” They also raise the spectre of economic displacement. In Europe, these dynamics produced the 2019 gilets jaunes protests in France, and demonstrations by Dutch farmers and their Spanish, Polish, and Italian counterparts. Some beleaguered governments are now rethinking these policies as studies demonstrate a pattern of exaggeration on the issue in the media and academia.

But despite its negative economic impact, climate catastrophism does seem to appeal to a large youthful constituency. More than half of young people, terrified by erroneous predictions of a massive sea rise and future famines, believe that the planet is doomed. Many of them believe the solution to the climate issue lies in rapid deindustrialisation, which is already immiserating working-class communities in Europe, and in “degrowth,” a weird form of autarkic feudalism that requires people to live in small places, eat a meagre diet, and surrender any chance of upward mobility.

This kind of thing may win adherents in universities, college towns, and upper-income urban areas, but it is unlikely to be a political success elsewhere. The adherence to these draconian climate polices—along with an attachment to things like transgenderism, race quotas, and open borders—has prevented progressives from winning mass support so far, but that may be changing as those disenchanted with liberalism and MAGA look for a political alternative.

How Liberalism Can Return

The success of liberalism arose from a widespread belief that an imperfect system would nevertheless benefit most of the people most of the time. Today, however, Pew has found that the vast majority of parents—over seventy percent in the US—are pessimistic about the financial future of their offspring. Last year, less than ten percent of Americans under thirty thought that the country was headed in a good direction.

An economy where growth works for the affluent while everyone else sees rising inequality and downward mobility creates ideal conditions for a redistributive politics, particularly among the young at both ends of the political spectrum. Some Trumpists are now speaking about “MAGA communism” and even Trump is embracing state capitalism. For the time being, the rise of illiberal politics seems to be inexorable, and it is the illiberal wing of the Left that is best-placed to benefit if and when the illiberal Right falters in power. In the likely event of a Mamdani victory in New York, there are rumours that DSA-backed Alexandria Ocasio-Cortez may contest Senate minority leader Chuck Schumer’s Senate seat or even run for the White House. In a number of blue states, many Democrats in Congress and at the local level are being targeted for extinction by radicals in what could become a nasty internecine purge.

None of this is promising for the future of liberalism. The only way to slow or reverse this process lies in addressing the concerns of middle- and working-class citizens, who keep falling further behind even when the economy is strong. As in Weimar Germany, the key issue here is what historian Eric Weisz calls “the proletarianisation of the middle class.” Liberal institutions are unlikely to thrive when many people believe they are locked into a “postmodern subsistence economy.” Only the prospect of broad-base growth and greater opportunity can counter the authoritarian trend.

As Benjamin Friedman has argued, there’s a longstanding “connection between economic growth and social and political progress, not only financially but in terms of racial relations, family and support for environmental improvements.” The way to combat illiberalism is by creating conditions for a better future. We must make it easier for the young to rise, buy houses, start businesses, and raise families. If those avenues are all closed off, everyone will pay a heavy price, and the results won’t be pretty.

This piece first appeared at: Quillette.

Photo: Patrick Perkins, via Unsplash.

Carney's Canada Will Devolve into Feudalism

Joel Kotkin — Tue, 01 Jul 2025 20:28:38 -0400

Canada may have severed its feudal ties less violently, but like America, it experienced far less sustained aristocratic domination than either of its two mother countries, France and Great Britain. But now, particularly with the rise of the ultimate establishmentarian, Mark Carney, as prime minister, Canada’s feudal future seems increasingly assured.

Carney’s election places power in the hands of the “ultimate Davos man,” a habitue and beneficiary of the elite financial and real estate. He is a reliable advocate for the kinds of strenuous climate, tax and regulatory policies undermining Canada’s middle class.

Canadians like to boast that their country is more egalitarian — in terms of distribution of wealth — than the United States. And to be sure, America’s more ruthless capitalism tends to create both a great many winners and a lot of losers, with the middle classes struggling in between. Yet, despite the aspirations of Trumpian fascism, it has been Canada, and notably the Liberals, who allow the clerisy — the modern-day Church — and the bureaucracy, to limit free speech, a classic fascist tactic.

But the essence of feudalism lies in the marginalization of the middle and working classes. Here, Canada is failing; its per capita income relative to the United States has been slipping for years, and is now at the lowest level on record. Nor is it living up to its oft-repeated egalitarian image. Rather, today, Canada is well on its way to feudalism, having its highest income inequality ever recorded, with the top 20 per cent of households holding more than two-thirds of all wealth, while the bottom 40 per cent holds only 2.8 per cent. At the bottom, notes the left-leaning Policy Options magazine, up to one-in-four Canadians suffer from “a poverty level standard of living.”

Canada not only lacks corporate headquarters, but it is also hardly an entrepreneurial hotbed like the United States. Canadian small businesses, notes one recent analysis, are less productive than those in the U.S., one reason why few, particularly in manufacturing, become large. A paper by the Business Council of Alberta identifies trade, financing, institutional, regulatory, or taxation constraints. Overall poor productivity, particularly among high end workers, also contributes to Canada’s mediocre performance.

Not surprisingly, job creation outside government employment has been meagre. Overall, as the bureaucracy has thrived under the Liberals, the people, in general have not. In 2002, Canada’s GDP per capita was about 80 per cent of the U.S.’s, but has dropped by 2022, to 72 per cent of that of its neighbour to the south.

But perhaps nothing so reflects Canada’s feudal dilemma than housing. Despite being a country with enormous reserves of land, even in British Columbia, Ontario and Quebec, Canadian climate and regulatory policies, coupled with high levels of immigration, have made building new homes extraordinarily expensive by putting more pressure on an already inadequate supply. Although immigration levels may now be reducing, a surge of migrants, including those fleeing the Trump immigration policies, is already overwhelming border cities like Niagara Falls.

In this shift towards oligarchy, homeownership and investment profits play a major role. This is particularly true in terms of housing, where the Liberal party has long championed “urban containment,” a policy that seeks to limit suburban and exurban development while promoting dense urban growth. The result, notes a new study by demographer Wendell Cox, has been housing prices that, in terms of the relationship between median home prices and household income, are increasingly out of reach for the average Canadian.

Immigration, key to Canada’s population surge, has contributed to this shortage. While the country’s working population swelled by a record 3.7 per cent at the start of this year, housing starts remained essentially flat. At one housing start for every 4.9 people entering the working-age population, “there is no precedent for a housing supply deficit of this magnitude,” notes National Bank of Canada economist Stéfane Marion. The biggest losers have been people under 40, for whom the homeownership rate has dropped to around 50 per cent, almost 10 per cent less than a decade before. It also helps to have wealthy parents who own a home; children of homeowners are twice as likely to acquire a home themselves.

If you wish to live in Canada’s two great international cities, and are not of aristocratic stock, it’s getting tough to get shelter. Four of the six major markets in Canada have a median multiple — a ratio of the median house price by the median gross (before tax) annual household income — of 5.4, considerably higher than the U.S.’s 4.8. Vancouver now ranks fourth among all anglophone markets at 11.8, behind Hong Kong, Sydney, and San Jose. Toronto, at 8.4, stands as the second-least affordable market in Canada and ranks 84th out of 95 markets in international affordability, with a severely unaffordable median multiple of 8.4. As late as about 1990, national price-to-income ratios were “affordable,” at 3.0 or less in Australia, Canada, Ireland, New Zealand, the United Kingdom, and the United States.

This pattern severely restricts homeownership, which has been declining since 2021. Not surprisingly, rates are lower in both Vancouver and Toronto than in much of the country. Clearly densification, the preferred growth option of the elites, does not help a housing shortage or reduce prices as Patrick Condon of the University of British Columbia has shown. Indeed, now Vancouver is now producing less-than-half the housing units needed to meet demand, one reason for the high prices even in a weak economy. Condon, an eloquent advocate of densification, cites the “indisputable” evidence that “upzoning” increases the value of land (by increasing the development value).

Concentrations of property and wealth are likely to worsen under the renewed Liberal regime. Planners and climate activists, as in California, a place which almost rivals Toronto and Vancouver in their progressive domination, will likely get even stronger with “net zero” devotee Carney in charge. Similarly, industries that tend to create high-wage jobs, notably in oil and gas, will find themselves constrained, leaving the big money to financial institutions and those firms who rely on protectionism to shield themselves from both Chinese and American competition.

It may comfort the current ruling elites in Canada to bloviate over Trumpian idiocy, but none of this will slow the country’s growing shift to feudalism. Blaming Trump may deflect the suffering public from identifying the real culprits, the property and financial elites, and their political operatives like Carney, whose preferred policies threaten to stymie the progress of most Canadians.

This piece first appeared at National Post.

Photo: National Post.

Musk Outbursts Reveal a Deeper Rift in MAGA

Joel Kotkin — Thu, 05 Jun 2025 12:20:36 -0400

The deepening split between Elon Musk and the Trump administration speaks to broader divisions within an increasingly shell-shocked GOP. Musk, who left the White House only last week, has since denounced Donald Trump’s hodgepodge budget bill – the so-called Big Beautiful Bill – as a ‘disgusting abomination’, as it will add almost $4 trillion to the federal deficit. He had previously called Trump’s pro-tariff chief trade adviser, Peter Navarro, a ‘moron’, reflecting the gulf between the populists and the oligarchs in the MAGA coalition. Oligarchs, whatever their party, do not favour tariffs, curbing immigration or raising taxes on themselves.

It turns out that this incoherence, married to one-man rule under Trump, has consequences. MAGA is a coalition based largely on a shared detestation of the ‘progressive’ agenda, but it has little else in common. It includes people concerned about free speech and anti-Semitism, as well as Christian humanists. And it also contains deeply troubling elements that appeal to a stew of authoritarian, nativist, racist and anti-Semitic ideas – tropes long peddled and platformed by Trump supporters such as the pro-monarchist Curtis Yarvin and the ubiquitous, ever-ugly Tucker Carlson.

Not surprisingly, the broader base that elected Trump is now fracturing into its constituent parts. This is not to say that there has been a shift to the self-righteous and rightfully ignored ‘Never Trumpers’ in the GOP. Nor have Republicans suddenly embraced the leftist meme that Trump is a ‘fascist’ with a plan. He is nothing of the sort: lacking any real ideology or disciplined movement capable of advancing a particular programme.

In essence, Trump is a grifting narcissist with a keen sense of how to take advantage of the sustained imbecility of his opponents. But there is no fixed core to Trumpism – only impulses more expected from a toddler with ADHD than a presidential administration. He may have been a builder in his past career, but he appears clueless when it comes to constructing a clear policy agenda beyond revanchism and grift.

This incoherence is now undermining his own coalition. The tariff blitzkrieg, for instance, could be seen as justified in response to the undoubted mercantilism of Canada, the EU and, above all, China. Yet instead of leading to concessions from other countries, the chaotic rollout of the tariffs has the potential to paralyse large swathes of the US economy, including the all-important auto industry – winning few allies beyond a handful of labour-union leaders, many of whom will probably never support him anyway.

One can feel the wheels coming off, as many of the key constituencies that elected both Trump and the GOP Congress resist his impetuosity and persistent dishonesty. Like most political movements, MAGA is a fragile alliance of groups that often have little in common – and in some cases, loathe each other. This is already evident in the widening chasm between Trump’s tech bros, who favour cutting government spending and care chiefly about personal enrichment, and the working- and middle-class voters who twice put him in the White House.

Beyond the loss of Musk, whose support was crucial to his 2024 electoral success, Trump is slowly dissolving one key alliance after another. One critical rupture has occurred with traditional, small-government conservatives, epitomised by the Federalist Society, which played a pivotal role in judicial appointments in Trump’s first term. As strict constitutionalists, they are naturally sceptical of Trump’s federal power grabs. In the future, he is more likely to appoint not principled conservatives but the kind of partisan hacks found in the district courts of blue states – or worse, the judges of the People’s Courts in socialist regimes.

Read the rest of this piece at: Spiked.

Photo: Elon Musk speaks at 2025 CPAC, by Gage Skidmore, via Flickr, under CC 2.0 License.

Building the Future: Fixing the Global Housing Crisis

Joel Kotkin and Wendell Cox — Sat, 31 May 2025 20:28:38 -0400

This is the second of a two-part series on the global housing crisis. Read the first part here.

The affordable housing crisis in America and many other advanced countries keeps getting worse because it is largely dominated by the wrong voices talking about the wrong places.

For years the YIMBYs and NIMBYs have debated development in urban centers: While “Yes in My Back Yard” advocates seek to “build, build, build” ever more density in urban centers for environmental reasons, the “Not In My Back Yard” forces want to limit development often to preserve property values and the existing character of neighborhoods.

Meanwhile, housing prices have continued to rise to often unsustainable levels from San Francisco to Seoul, putting the dream of home ownership out of reach for many who are forced to pay much of their salaries in rent. Both YIMBYs and NIMBYs rely on heavy-handed regulation and other policies that discourage and complicate home ownership. Their effects have been particularly severe in California, Canada, Australia, Britain, and other places where policies aimed at funneling more people into dense urban areas by making it expensive to build in the suburbs and exurbs are negatively distorting the market.

There is now a growing pushback to this approach. Even some long-time advocates of forced densification and urban growth boundaries are recognizingthat “sprawl” is not only here to stay, but that it offers a cohesive and market-friendly way to spur greater construction and lower prices. Given enough freedom, the market can do much to address the housing problem.

In the future, the shift from urban centers to suburban and exurban growth will likely be accelerated through the rise of remote work and new transport systems such as autonomous vehicles. A recent study by the Federal Reserve Bank of Kansas City noted that demographic conditions, the rise of online work, and migration to less expensive regions create conditions for a family-friendly housing boom. The issue is how to meet this burgeoning demand and build a society where the opportunity for home ownership becomes ever greater.

Market-Based Solutions

Trying to force people to live in dense urban areas against their wishes contributes to the continued outflow of people to suburbs and exurbs, and from highly regulated to less regulated states. It is not enough to simply call for building more houses as a solution to the crisis when regulation-heavy “urban containment” policies have increased land-related costs and made housing affordability impossible in many regions.

Thanks to market forces, peripheral development has long been the way cities have grown virtually everywhere in the world. Contrary to the claim that density represents social and economic progress, wealthier countries are producing ever more decentralized cities. Even in places like Tokyo, London, Paris, and New York, the vast majority of population growth takes place in the periphery. As one report put it, “human settlement has always tended to sprawl out from key urban centres.”

Read the rest of this piece at: Real Clear Investigations.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a Senior Fellow with Unleash Prosperity in Washington and the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Photo: Deane Bayas via Pexels.

The Death of the Family Home is Killing the American Middle Class

Joel Kotkin — Wed, 28 May 2025 20:28:38 -0400

Once renowned for widespread homeownership, the key Anglosphere countries are reverting to a feudal past, where land is owned by increasingly few. In every major market in Canada and Australia, and in much of America and the UK, house prices have skyrocketed to record levels, with corresponding consequences for home ownership rates.

In a new report, demographer Wendell Cox traces this to the failure to build enough new housing units, particularly the single-family homes that consumers most desire. In the United States, homebuilders built about one million fewer homes (including rental units) in 2024 than in 1972 when there were 130 million fewer Americans. One estimate puts the US housing market short by about 4.5 million homes.

But the housing crisis is a global phenomenon that hits the middle and working classes hardest. In large part due to high housing prices, notes the “OECD in Under Pressure: The Squeezed Middle-Class”, the middle-class faces ever rising costs relative to incomes, so much so that its very survival is threatened. “The cost of essential parts of the middle-class lifestyle have increased faster than inflation,” it notes. Housing prices have been rising “three times faster than household median income over the last two decades.”

Even in prosperous and communitarian Switzerland, Zurich studios sell for well over $1 million, and small houses for considerably more than that. Even affluent people cannot afford down payments, despite the overwhelming financial advantages to homeowners.

This housing shortfall and high prices are seen throughout the Anglosphere. Australia’s historically high rates of homeownership have all but collapsed among those aged between 25 and 34 years old, plummeting from more than 60 per cent in 1981 to only 45 per cent in 2016. The proportion of owner-occupied housing has dropped by 10 per cent in the last 25 years. In the United Kingdom in 2022-23, 39 per cent of 25-34 year-olds owned their home, compared to 57 per cent of the same age cohort in 1995. A rising proportion of British millennials are likely to remain renters for life.

Similarly, US millennials were already less likely in 2015 to be homeowners than baby boomers and Gen-Xers. By 2021, home ownership among those aged 25-34 had dropped from 45.4 per cent in 2000 to 41.6 per cent. Record numbers of first-time buyers are stuck on the sidelines as housing affordability stands at the lowest level for which there are data series, while one in three pay over 30 per cent of their income in mortgage or rent.

Across the board, Wendell Cox’s new report lays the blame for this situation on the British-born idea of urban containment, with its roots in the UK’s 1947 Town and Country Planning Act. This policy sought to steer development towards higher density core cities and away from the lower density periphery, forcing people into “living smaller, living closer” – whether they like it or not.

The results have been dreadful. As early as the 1970s, British planner Peter Hall suggested that the “speculative value” of land with planning permission in the UK was five to 10 times higher than that of land without planning permission. Virtually all the most expensive markets in Cox’s new affordability study – outside number one Hong Kong – operate some form of urban containment, including such cities as Vancouver, Sydney, Melbourne, Adelaide, San Francisco, Los Angeles, San Diego and, of course, London.
All these areas now have prices that are nine times or more higher than median incomes, which is also three times the historic rate. Many of the markets closer to that historic norm – in Texas, the South and the Midwest US – do not have such policies.

Nor does focusing on higher density lower prices, as is sometimes argued. In fact, US data suggests a positive correlation between greater density and housing costs. Among 53 major metros, those with more single-family housing and larger lot sizes (key indicators of lower density) have substantially better housing affordability. One recent study found that the median family in San Jose would need 125 years (150 in Los Angeles) to save a down payment; in Atlanta or Houston the figure is 12 years.

Perhaps most damning, these policies are clearly not effective in creating more housing; Portland, a US pioneer in urban containment, embraces high density housing but high prices have driven multi-family construction to the lowest level in a decade. In California, which has experienced similar stagnation, notes a recent RAND study, policy-driven delays, strict architectural standards, green mandates and the requirement to pay union-level wages have pushed the cost of construction of subsidised apartments twice as high as in Texas.

How do we begin to solve this problem? It should not be too difficult, once urban containment and other policies are effectively scrapped. With relatively low population growth – particularly outside the migrant population – there is no huge spike in fundamental demand as occurred, for example, in the 1950s and 1960s. The rise of remote work, migration to smaller urban areas, as well as new technologies for building, including the use of 3D printers, actually offer the chance to build more affordable housing.

The bad news is that this crisis is largely self-inflicted. The good news is that it can be solved, if our political class can find the will to change and jettison policies that have led to this disastrous situation.

This piece first appeared at: Telegraph.