It’s something millennials hear again, and again, and again: Their delay in starting families, and their inability to afford a home, represent their collective failures as a generation.
We’re slowly starting to understand that this may not be their fault (it might be capitalism’s). And a team of economists have now crunched the data proving that zoning and restrictive land-use regulations–forces that contribute to making housing so expensive in cities like San Francisco and New York–are actually driving fertility rates downward.
In a recent paper co-authored with Harvard Kennedy School PhD candidate Lauren Russell, Daniel Shoag, a Kennedy School and Case Western Reserve professor, found “a significant relationship between land-use restrictions and fertility rates across all measures and geographies.” Shoag and Russell determined the relative restrictiveness of a city’s land-use policies by the number of cases brought to court around housing issues; they crossed that data with listings like the Wharton Residential Land Use Index to arrive at a complete picture of a city’s zoning codes and housing stock. When overlayed with fertility data from the CDC, they found that the cities and towns that actively stifle or restrict development are seeing fertility rates, especially among young women, plummet.
We know this instinctively. Stories abound about young tech workers in major cities living in tiny apartments that could never accommodate a family. Even for the relatively well-off in these cities, the costs of relocating to a larger home are prohibitive enough that they often just forgo, or delay, starting a family until much later in life: Birth rates among women aged 20 to 24 (once, the most likely time to start having a family) declined by 4% from 2006 to 2016. In that same time frame, fertility rates among women aged 35 to 39 rose slightly.
These findings, Shoag tells Fast Company, fall within “a larger shift in the U.S. economic landscape away from two trends that had held true for a very long time.” One trend was that for 100 years, incomes per capita in historically poorer states had grown more rapidly than incomes in wealthier states, and the gap between the two was slowly closing. And the other, Shoag says, was that people from poorer states would often move to richer places in search of higher wages. Over the last 30 or so years, though, both trends have abruptly disappeared.
“The disappearance is intuitive,” Shoag says. “If you think of places in the country that are growing fastest in terms of population, you think of places like Texas, Central Florida, Utah. You don’t think San Francisco.” That’s because, Shoag says, cities like San Francisco, which is notorious for a stagnant housing stock, aren’t building enough to accommodate growth. The population in places like San Francisco and New York moves, to be sure, but it’s more a matter of turnover–wealthier, more educated people moving in and displacing lower-income, less skilled workers–than it is a matter of growth. And contrary to the previous trend, which held that places like Alabama and Mississippi were where wages were growing the fastest, we’re now seeing the steepest climbs in income in those same cities–San Francisco, New York, Seattle–that aren’t building enough to accommodate growth.
So in a sense, the wealthiest cities, by restricting their housing supply, are driving rents upward, concentrating their populations down to the people who can afford them, and making it increasingly harder for people with fewer resources to move there and stay there.
Essentially, moving to places like San Francisco or Seattle requires a series of requirements that you be well-educated enough to work in industries, increasingly concentrated in those areas, that demand it; that you be willing to shell out a large portion of your income on housing; and that as a result, you minimize your external expenses and obligations to others.
And that, of course, precludes introducing the massive expense that is having a child.
Which brings us back to the decline in fertility rates. This is a trend that’s largely concentrated in major cities, but the wage stagnation in other parts of the country also creates a barrier for new parents. Economists like Shoag are particularly concerned about this reduction in fertility. Fewer children being born now–especially in the wealthiest cities–means there will be fewer people to prop up the economy in the years to come, and fewer people to support the population aging now. We’ve essentially created a system that makes reproduction such a burden on people that the system will soon no longer be able to reproduce itself (again, this is a problem with capitalism).
Cities, Shoag says, could do more to support fertility rates, population growth, and opportunities for lower-income people to move there and thrive by building more and affordable housing, and alleviating some of those land-use regulations that have made those three conditions so difficult to maintain over the past several decades. Even measures like increasing the minimum wage, which San Francisco, New York, and Seattle have championed in recent years, will accomplish little if those cities don’t also build housing. “There’s only room for X number of people,” Shoag says. “If a city creates 50,000 new jobs at a good wage but doesn’t update zoning codes or add more housing, that’s 50,000 people that’ll be pushed out.” With conditions this restricted, it’s no wonder that the thought of introducing new babies into the mix is being pushed further and further down the line.