Serfing the Future?

Land ownership has shaped civilizations from their beginnings, with a constant interplay between great powers—the aristocracy, the state, the Church, the emperor—and those below them. History has oscillated between periods of greater dispersion of ownership, and those that favored greater concentration.

Today, we live in an era of ever-greater consolidation, not from knights in armor, or Communist cadres, but from the forces of big capital and an ever-more intrusive regulatory state. The result has been record-high housing prices, well above the increase in incomes resulting in a systematic decline in the ability of people, particularly the young, to buy their own house as prices rise even in less expensive areas. Supply also faces great constraints, due in part to labor and supply-chain woes and the demand shock of the pandemic and remote work.

Unless reversed, young people will be forced into a lifetime of rental serfdom. The assets that drove middle-class stability, wider social benefit, and subsidized comfortable retirements, will likely not be available to them. Property remains key to financial security: Homeowners have a median net worth more than 40 times that of renters, according to the Census Bureau. Shoving prospective homeowners into the rental market not only depresses their ambitions, but it also forces up rents, which hurts poorer households and even solid minority neighborhoods.

But this impacts far more than just finances. Low affordability and high rents tend to depress the fertility rate, contributing to what is rapidly becoming a demographic implosion in many countries. More important still, dispersed property ownership has long been intimately tied to democracy while concentration tends to characterize autocracies, whether of the state-dominated variety or that of big capital.

How we reverted to a feudalistic state is a complex and infuriating story. Critical to this change has been a planning theology that holds density itself as intrinsically good and that purposely seeks to block housing on the periphery for societal, and environmental reasons. Where implemented, this approach has driven up prices, as evident in places like Sydney, Vancouver, San Francisco, London, and Paris. This has been a boon to speculators and well-heeled developers, but makes middle-class housing unaffordable to the middle class and intensifies the poverty of poorer residents.

The “pack and stack” planning “vision” has been widely adopted, even in land-rich countries like Australia. This ad from the New South Wales government promises an urban paradise of sorts:

This, as many Sydney-siders will tell you, is not exactly what happened. Instead of flocking to the city, research by the Massachusetts Institute of Technology/Queens University (Canada) estimates that nearly 80 percent of Australia’s metropolitan population lives in automobile-oriented suburbs or exurbs. Further, more than 75 percent of employment growth in Sydney and Melbourne occurred outside the central business districts between the 2011 and 2016 censuses. But due to planning restrictions, taxes, and fees, in the decades since these regulations have been imposed, Sydney has become one of the Anglosphere’s most expensive cities, with prices that have placed most prospective homeowners on the sides. Indeed, under these regulations, house prices have tripled relative to incomes creating conditions where two-thirds of Australians now believe that the next generation will never be able to afford a home.

These trends are distressingly common across the higher income countries. The Organization for Economic Cooperation and Development (OECD) reported in Under Pressure: The Squeezed Middle-Class that the future of the middle-class is threatened by house prices that have been growing “three times faster than household median income over the last two decades.”

This shift reflects, at least in part, the movement of big capital into housing, including foreign investors. In 2014, French economist Thomas Piketty produced a widely referenced analysis of world inequality. Soon after, Matthew Rognlie of Northwestern University found that virtually all of Piketty’s increased inequality was attributable to increased house values. In the United States over the past decade, the proportion of real-estate wealth held by middle-class and working owners fell substantially while that controlled by the wealthy grew from under 20 percent to over 28 percent.

This trend will be worsened by moves on Wall Street to buy up single family homes, further raising their price, and then rent them out, particularly to priced-out millennials, has reached record proportions. Rather than help middle-class families this supports the rentier class—which Piketty calls the “enemy of democracy”—assuring them of steady profits by collecting rents while the middle class loses its independence.

Some densifiers suggest that forced densification will lower prices. In reality, virtually all the regions of the world with the highest house prices have regulations designed to encourage development in the inner urban rings and discourage or even ban construction on the more affordable peripheries. Former World Bank principal urban planner Alain Bertaud describes the associated consequences, noting that urban growth boundaries and greenbelts put “arbitrary limits on city expansion” and that “the result is predictably higher prices.”

Research in Vancouver, Canada and other locations has shown an association between densification, on one hand, and higher land prices and diminished housing affordability on the other. Research on two decades of densification projects in Brisbane—Australia’s fastest growing city—found that housing costs rose even with little private development interest. In the US, meanwhile, higher density urban areas have substantially higher housing costs. Around the world, more severe housing and land-use regulation has been associated with losses. Both the OECD and Rognlie urged a review of such regulations which has been associated with severe losses in housing affordability.

Planners may not have lowered prices or lured people to cities, but they have managed to stomp on the aspirations of homeowners. Even before the pandemic, this hit the young in particular including in the United States, Canada, and Australia. Perhaps nowhere is this hostility to market demands more intense than in California, where oligarchic finance has allied itself with progressive planning. The general thrust of the state’s regulatory regime seeks to limit “sprawl” to reduce greenhouse gasses from cars and make our communities environmentally more sustainable.

The result? Coastal California’s housing prices relative to incomes have risen nearly three times the national average, and now the state suffers from the second lowest homeownership rate in the US after New York. Most impacted have been California millennials suffering homeownership rates that are diminishing more quickly than elsewhere in the country.

Nor does densification have any of the purported environmental benefits now being pushed by the permanent DC urban-centric establishment, such as the Brookings Institution and the Biden administration. The pro-density Terner Center projects that if California’s cities followed the density guidelines, the impact on emissions would be at best one percent. This at a time when we have better, less disruptive ways to address emissions. For example, promoting at-home and hybrid work reduces greenhouse gas emissions without embracing a density mantra which is widely unpopular in most communities.

Rather than impose a density agenda, it is now imperative to embrace the growing pace of suburbanization. Despite all the talk of “back to the city,” suburbs and exurbs account for more than 90 percent of all US major metropolitan growth since 2010. Between 2010 and 2021, the suburbs and exurbs of the major metropolitan areas gained two million net domestic migrants, while the urban core counties lost 2.7 million. Overall, according to a recent MIT study, roughly 80 percent of the nation’s metropolitan population lives in auto-oriented suburbs and exurbs, while barely eight percent live in the urban core, and another 13 percent live in traditional transit-oriented suburbs.

The increased move to the suburbs and smaller cities was evident even before the pandemic, and now it has accelerated. According to Census Bureau data, cited by Brookings’ Bill Frey, most large metros are shrinking. Redfin reports that roughly one-in-three moves by their readers was to another region, the highest level ever, and mostly to less expensive, and usually less dense, locales. This clearly makes the current planning religion particularly misplaced.

These trends can only be amplified by the shift to online work and the continued decline in the historic appeal of dense central business districts, which across the West account for roughly 13 percent of all jobs. Early in the pandemic, perhaps 42 percent of the 155 million-strong US labor force was working from home full-time, up from 5.7 percent in 2019, and had exceeded the share of workers commuting by transit. New research from Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis suggests that, when the pandemic ends, a “residual fear of proximity” and a preference for shorter commutes (or none at all) will mean that roughly 20 percent or more of all work will be done from home, almost four times the already-growing rate before the pandemic.

This is not an extravagant claim. Studies from the National Bureau of Economic Research and from the University of Chicago suggest this could grow to as much as one-third of the workforce, and as high as 50 percent in Silicon Valley, something reflected in the openness with which most tech firms accept new workstyles. Roughly 40 percent of all California jobs, including 70 percent of higher-paying ones, could be done at home, according to research by the Center of Jobs and the Economy. Moreover, advances in artificial intelligence and virtual reality are likely to improve the popularity and feasibility of remote working.

In the process, central business districts like New York, Chicago, Boston, and Washington have all suffered far more than surrounding suburban or sunbelt business districts, losing both residents and businesses. New York has been disappointing, largely due to a rise in crime, employee reluctance to give up a more home-centered lifestyle, and growing acceptance of at-home or hybrid work among employers.

Even San Francisco, with one of the nation’s strongest central business districts, has suffered rising office vacancies, now three times the pre-pandemic levels. This is enough to fill the Salesforce Tower, the city’s tallest building, 12 times. Things should improve, but most companies there, according to a Bay Area Council survey, expect employees to come to the office three days a week or fewer, with barely one-in-five seeing a return to a “normal” five-day work week.

This shift is likely to be resisted by many managers who want to frogmarch people back to the office. Yet, some 60 percent of US teleworkers, according to Gallup, wish to keep working remotely. Attempts to reverse this situation may prove difficult, due to deep-seated labor shortages. “You see tons of bold statements. Companies saying, ‘No remote work.’ Some companies are saying, ‘We’re getting rid of all of our offices,’” says Bret Taylor, president and chief operating officer of Salesforce. “There’s like a free market of the future of work, and employees are choosing which path that they want to go on.”

These workplace trends suggest the suburbs and exurbs are the future. Nearly two-thirds of US millennials prefer this kind of location, which is historically tied to single family ownership. Where millennials go has implications for birthrates, which have fallen as housing prices have risen. Families overwhelmingly favor less dense housing and frequently decide to have children once they buy a house. A recent National Bureau of Economic Research study draws this conclusion, seeing a 10 percent increase in home prices leads to a one percent decrease in births among non-homeowners in an average metropolitan area. In China’s Yangtze River Delta (Hangzhou-Shanghai-Nanjing), research shows that fertility rates decline materially as house prices increase, with a similar finding regarding rents.

The prevalence of singledom and the culture of childlessness are often portrayed as matters of choice or even superior environmental enlightenment. But in America, at least, attitudes about family are not significantly different from prior generations, albeit with a greater emphasis on gender equality and later births. Among childless American women aged 40–44, barely six percent are “voluntarily childless.” The vast majority of millennials want to get married and have children.

High prices and density are poison to fecundity. Cities with the most expensive housing and the most density are becoming childless demographic graveyards. Rich Asian cities like Hong Kong, Taipei, Beijing, Shanghai, and Seoul suffer fertility rates often barely half of replacement. This also applies in the West in high-cost cities such as New York, Paris, London, Los Angeles, and San Francisco. In Manhattan, the ultimate high-cost elite urban core, the majority of households are not only childless, but nearly half are single, according to the latest American Community Survey (US Census Bureau) data.

Ultimately, as housing challenges reduce birthrates, we will likely face economic stagnation. In the United States, workforce growth has slowed to about one-third of the level in 1970 and seems destined to fall even more. These figures are even more catastrophic in very low-fertility countries like Japan, Germany, and most importantly, China. China’s working-age population (those between 15 and 64 years old) peaked in 2011 and is now projected to drop 23 percent by 2050, with 60 million fewer people under the age of 15—a loss approximately the size of Italy’s total population. The ratio of retirees to working people is expected to have more than tripled by then, which would be one of the most rapid demographic shifts in history. By 2100, reports the South China Morning Post, the country’s population could be halved.

Perhaps even more critical may be the political and social impacts of unaffordable housing. From its earliest days, democracy depended on a class of small property owners, whether in Greece or Rome, or modern Britain, America, Canada, and Australia. The earliest democracies in Athens and Rome rested on an assertive property-owning middle class. Aristotle warned about the dangers of an oligarchy that would control both the economy and the state; in fact, an ever-greater consolidation of wealth played a role in undermining Greek democracy and the citizen-led Roman Republic. By the end of the Republic, over 75 percent of all property was owned by roughly three percent of the population, while over four-fifths owned no property at all.

Self-government resurfaced largely where a property-owning middle class emerged to challenge the feudal order—first in Italy and the Low Countries, and later across western and northern Europe, and then in the “new worlds” of North America and Oceania. The idea of dispersed ownership was sharply opposed by aristocracies and later by communist planners who saw the appeal of owning for the masses but preferred to impose “a concrete spatial agenda for Marxism” in small apartments densely built near public transit, with close proximity to the workplace.

These objections to suburbs and homeownership have been picked up by density advocates from the tech-funded YIMBY movement in California. Home ownership, according to progressive mouthpiece Vox, “could be turning you into a bad person,” by making you concerned about living near slums and drug dealers. According to a Minnesota City Council Member, those who talk of “neighborhood character” and “historic preservation” may be “participating in structural white supremacy.”

Until recently, such collectivist views were unpopular across the political spectrum. The ideal of broadly dispersed property ownership was promoted by politicians on both the Right and Left in most high-income countries. “A nation of homeowners, of people who own a real share in their land, is unconquerable,” said President Franklin D. Roosevelt. He saw homeownership as critical not only to the economy but to democracy and the very idea of self-government.

Today, this faith in self-determination and the democratization of land ownership is being reversed, despite the wishes of the great majority in the United States, Europe, Australia, and Canada. We can either work to expand our communities, preferably in more sustainable ways, or we can accept that future generations will be ever-more dependent on subsidies or affordable unit set-asides.

An economy where most people, blocked from ownership, rely upon wealth transfers from the lucky few cannot easily coexist with a tradition of individual initiative and self-governance. Addressing the housing crisis is not only about homes and hearth but may determine the nature of our society for decades to come.

This is a companion discussion topic for the original entry at

I was lucky to enter the housing market just after it crashed. Got my nice starter home in the burbs. Paid it off, and then was able to build a custom house on some acreage outside of town. This whole essay rings true of my age group (first millennials) and the changes through later millennials into Gen Z. The market is nearly impossible and the rentals are going for greater and greater prices forcing them to stay in apartments.

As far as being out of town, I like going in to hang out but I just can’t imagine a lifestyle in the concrete jungle. When people from in town come out to visit they luxuriate in the openness, the space, the house, the freedom. But they can’t afford it now.

I do not like the aggregation of wealth and land to the oligarchs (Which we should start using that name more and more because as much as we don’t like those folks in Russia, we have them here just as much). They control the government and they control the land. It is becoming a serfdom. It can’t end well.


This extremely long essay really seems to be a topic in search of a problem.

Despite the overwrought claims of “serfdom”, ties to “autocracy”, and repeated references to the moneyed machinations of the “denisfiers”, I couldn’t help but think of how this state of affairs did not seem to in any way resemble the conditions in the large city where I live and work.

From my vantage point I have seen people flocking to the “periphery” which the author claims the devious denisifers keep stopping them from doing. In fact, the pandemic has only made this flight easier as more and more jobs are now done remotely. The suburbs near me are booming.

However, its possible where I live is the exception. Maybe this is a problem in most other places. So I read on and find…

How much higher than 90% do we need to go before we acknowledge that the cities are not in fact getting denser? Isn’t “most large metros are shrinking” the exact opposite of what this essay is claiming in the entire first half? Why are people destined to be “rental serfs” if they have the freedom to move to a place that has a low cost of living while still having access to a great remote job market?

Doesn’t this part just demolish the entire premise of the essay? :thinking:


My wife and I bought two properties in China back in the early 2000s. In those days, the values were on-par with what you’d see in some Western cities. Since we bought however, we have seen prices rise to astronomical heights. It makes no sense either. A flat in the city where I live once sold for about 120k (USD) and now, that same apartment would go for 500-650k (USD). Unreal. And the Chinese have overbuilt. In our neighborhood we have two buildings of about 25units each that have been “bought” by someone but no one has ever lived in any of the apartments. Both buildings just sit empty. Now, the housing prices are so high that a down payment costs about 10yrs of your pay just to save up for an average Chinese. And people on the lower rungs of the ladder will never own. My brother in law bought his house about 8years after we bought ours. Our first house cost RMB940k with 120k down payment… His down payment was RMB760,000 for a house that is smaller, and in a worse part of town. Total ripoff…

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Here in the UK, the Housing Crisis is now the single greatest national priority. The political party which seeks to directly address it a way which voters find plausible is likely to win power for over a decade, regardless of whatever other lunacies they seek to impose upon the populace. My aunt used to work in real estate. They are huge numbers of people seeking to migrate to a more rural style of life- but the problem most real estate agents are having to deal with is that the supply of houses is only a tiny fraction of the demand. Many of the pictures they now place in their windows are rental properties.

Home building has finally begun to recover- the most recent figures I could find were 2019- 2020 at or around 180,000, and although the trend has generally been upward, this is still well shy of the roughly 220,000 that are needed each year to simply fulfil housing replacement stock. This is a mess with around 30 years of undersupply, and we could massively ramp up production for two decades and still be nowhere near existing demand.

I would have liked more on the capital side of the equation- there is an Iron Triangle of Interest at the heart of this artificial undersupply aimed at unprecedented levels of price gouging. On the one had their are the bankers who simply refuse to lend to smaller firms with twenty years experience, perfect credit histories, proven track records and against secured appreciating assets- they want to see the price-to-value ratio of housing increase as a means of creating more mortgage debt as an asset class. Also included in this category are private equity firms who are playing a increasing role, both in the inflation of the price of building land, and in the housing market itself- to the extent that McKinsey recently wrote a report on ‘pricing’ as the new frontier of private equity. The second and third points of the triangle of interest are, of course, government and existing homeowners.

Of course, the libertarian land use side of the argument is true, and government, especially local, has been a complete ass on this subject almost anywhere one cares to look. They simply cannot seem to get it through their thick skulls demand doesn’t create supply, but rather that supply creates demand- Say’s Law- and this especially true of housing, where increased demand increases scarcity costs to the point that the profit margins from actually building homes are tightened.

So I sympathise with the libertarian side of the argument, I really do. But we also need to acknowledge the extent to which the printing of fiat money invariably results in capital surpluses which far exceed the capacity of productive economics to absorb. I if were a Middle Eastern Sovereign Wealth Fund (increasingly the key customers of private equity), and given the choice between lending money to governments at negative interest rates and investing in housing assets, I would naturally choose the latter- especially with the prospect of government debt defaults on the not-too-distant horizon.

I actually wrote about this subject in my recent Substack, although you wouldn’t know it from the title:

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I agree. Housing is far too expensive in some urban areas, partly because of excess demand and partly because of restrictive zoning, excessive regulation and NIMBYism that prevents the construction of high-occupancy residences. So, people are relocating to areas with more affordable rents and home prices. Isn’t that how the system is supposed to work?

House prices where I live are currently very high (20% above what they were a year ago) due to pent-up demand and construction delays caused by the pandemic, but this is a bubble that will inevitably deflate. Portraying the situation as a crisis is an invitation to government intervention, which will almost certainly make the problem worse.

Are the authors suggesting that millennials will refrain from having kids because housing is too expensive? I don’t think that tracks. They’re confusing correlation with causation: wealthy people tend to have smaller families, and they also live in the “most expensive cities.”


For younger families, home-ownership does not convey wealth. The reality is that for years (decades) the bank owns the house, not the “owner”. Wealth for the owner comes much later in the form of equity and appreciation.

What home-ownership provides is a more livable space and, in most cases, a backyard.

So I do suspect that the thought of raising kids in an urban apartment with no yard would be a disincentive to having a family.


Historically, lending criteria were stable at between 3.5 to 4 times annual primary earning, plus 1.5 times the second income. Any lending at over 6 times your annual earnings is just plain wrong, with foreclosures, property seizure and heartbreak the inevitable consequence for many. Under these circumstances, if you were a country, you would have serious grounds for writing off the debt as odious debt- but then again, America has a terrible mortgage system anyway- in other countries, property owners own the home outright, and the bank only owns the debt.


And even still, rarely does appreciation net you as much as the total cost of ownership did over all those years. Home ownership builds wealth primarily because it is an excellent form of forced savings.


Unless you live in an environment where idiotic government policies promote scarcity and drive up values. I am “fortunate” to have lived in Seattle, which absolutely has those kinds of policies (aka the King County Growth Management Act).

We bought our first house 30 years ago for $100K. When we bought our second house we held on the to first, turning it into a rental. Over time our renters paid off the mortgage. The house is listed today on Zillow at $1.15 million, and is currently income property.

We keep the rent pretty low because we have a great renter. Seattles tenant protection laws scare the hell out of me, so when the current renter moves we’ll probably sell. The house will likely be torn down and replaced with a stack of cracker box apartments.

We purchased our current residence 20 years ago for $230K, currently Zillow has it at $1.71 million. So, like a large number of two-professional-income folks, we’ve done very well. At the same time our kids are totally priced out of the market.

It never ceases to amaze me how bad policies can benefit the upper classes and clobber the lower classes. A feature, perhaps? Or just a toxic combination of good intentions and willful blindness?


Then I stand seriously corrected. Well done!!!

Mornin’ Pat:

I thought he said that the densifiers were trying to stop them but failing, at least partially for the reasons you mention.

Because those places are getting harder and harder to find, probably mostly for the very reasons you site.

In Vancouver ‘crisis’ is not too strong a word, and I’ll take intervention if intervention is what it takes. I sometimes wonder if the infinite growth paradigm currently orthodox is not mostly designed to make sure that rents and the now over 40 year old real estate bubble continue to inflate forever. Very nice if you’re a speculator or a rentier.

It sure tracks in my family. My nieces and nephews are quite unanimous on the subject.

Nice to hear this from a guy who’s vested interest is in the other direction.

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I think having kids reorients me a bit. I want them to succeed. But the fiscal environment that surrounds them makes success harder and harder.

The big problem they’re now going to face is inflation, with their wages never quite keeping up. Neither owns much in the way of hard assets, which are the best hedge there is against the wealth-destruction that inflation brings on.

But they’re adults, and they’re both smart. They’ll get there.


Agreed, but that was my point. If its true that 90% of all new growth over the last decade has happened outside the cities then they are not just “failing”, rather they are failing spectacularly. Which leads me back to wondering what the point of this essay is?

Can you elaborate? Places that are not big expensive cities are not hard to find. I presume I am mistaking your meaning?

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In the greater Vancouver area you now have to go about a day out before prices start to drop to the point where an average wage earner has any chance. I think that’s partly due to retirees moving out, and of course the ‘work from home’ thing has the same effect. And the endless immigration can only put upward pressure on everything, everywhere. Even in the sticks, prices are now ‘speculative’, not ‘real’ – if you know what I mean.


I could imagine that some of the biggest cities in the country could be expensive to purchase a home in. But that is a highly local effect which hardly dooms people to be rental serfs.

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My own observations on US housing-
9 years ago I bought a 10 year old, three bedroom, two bath, two car garage, nice yard, decent neighborhood in Greensboro, NC, for $120k. It had been on the market for almost a year.

Three years later, when I listed it, I had 15 showings and 5 offers on the first day, and accepted an offer the second day for $140k Seriously wish I’d kept it a few more years, houses in that neighborhood are going for $200+ today.

I moved back to Michigan, where my parents still live, with vague plans of building a house on a few acres of land I own next to the parents. This is rural farmland, zoned agricultural. The local zoning requires I build at least an 1,800 square foot house.

I could afford to do this, but it’s just me, and I’m not really a house person. I don’t want to keep up with a big house. In the last one, I had two bedrooms and a bathroom I only opened the doors to clean once a year. Why should I pay for extra space I don’t need? So the neighbor can claim his property values aren’t being damaged? My dream home is a one bedroom, nicely finished, with a deck, hot tub, and six car garage/workshop. Everything being built in my county right now is 2,500+ square feet, but no one can figure out why there is no affordable housing…

Local government is stepping in. Announced last week a project to build ten small homes (Not tiny homes) for homeless families… at $400k each. Somehow, this doesn’t seem like a workable solution.

I like the idea of tiny homes, but most everywhere I’ve checked it’s extremely hard to actually build one. Under current conditions, and given that I’m out of the country for work 200-300 days a year, a house just isn’t practical, so I live on a sailboat. 260 square feet, and I love it.


Last year I was considering a winter home in or near Fletcher, NC. Closest big city is Asheville, 20-30 minutes away.
Cheapest home I looked at was $150k. No heat, no air, no plumbing. Built in 1930’s. It had a literal outhouse. I also looked at a $250k doublewide trailer from the late 1980’s. Decided I’d stick with letting the company pay for hotels while I’m working there.

That’s just not how it is in Canada Pat. Dunno about the States, but if you live anywhere there’s likely to be a job, prices are quickly becoming out of reach everywhere.