From California to Krakow, young voters who are losing faith in democracy have been spurred in part by a surprising cause: high rents and rising property prices.
The scarcity of affordable housing has triggered protests across European cities, from London to Lisbon, and on both coasts of the United States , where home prices have surged 54 percent since 2019. In California recently, hundreds of people, mostly renters, marched on the state capitol to decry the scarcity of reasonably priced rentals. In San Francisco, which has been so slow to approve new housing that a state law is forcing it to bypass some city regulations, the issue has fueled a rancorous debate in this year’s mayor’s race.
And across North America and Europe, the shortage is pushing voters, particularly younger ones, toward populist leaders who promise to address the problem by targeting an issue already key to their platforms — though not necessarily the main one driving the problem — increased immigration.
“If you can’t afford a place to live, you want to point fingers at someone, and incumbent politicians make an easy target — as do migrants,” Carbon Neutral Cities Alliance’s Michael Shank told POLITICO . “It’s a simple rhetorical flourish, but one that’s politically powerful and palatable to a public that’s understandably upset that they can’t find an affordable home.”
The link between housing and populism arises in large part because of the angst that can grow among those priced out of the market, research from David Adler and Ben Ansell suggests. While “some homeowners have gained massively” from rising house prices, they write, “housing market dynamics have created a map of winners and losers.”
Millennials and Gen Z are largely among the losers.
And for many of them, some centrist politicians worry the housing crunch is not only helping to nourish the rise of populism but also risks tarnishing the very idea of democracy. “If people think markets are rigged and a democracy isn't listening to them, then you get — and this is the worrying thing to me — an increasing number of young people saying, 'I don't believe in democracy, I don't believe in markets,’” Michael Gove, Britain’s housing minister, warned in February.
Indeed, opinion polls over the past few years have been consistently suggesting that millennials and Gen Z are much more disillusioned with democracy than Generation X or baby boomers were at the same life stage.
In some Western countries, the scarcity of affordable housing is fueling anger with high levels of migration. And populist politicians have been quick to capitalize on that, including Donald Trump, who says he wants to “stop the unstainable [sic] invasion of illegal aliens which is driving up housing costs.”
In Britain, where migration has been generally rising since the 1990s and reached record levels in 2022, only falling back marginally last year, Nigel Farage, the country’s populist agent provocateur and leader of Reform UK, has determinedly linked the two issues. “Immigration is the real reason for the housing crisis,” he argued in late June , claiming the country would have to “build a new house every two minutes” to accommodate the influx of people.
And in the Netherlands, populist firebrand Geert Wilders won last year’s election with a campaign that included promises to tackle the country’s acute affordable housing shortage . With the country facing a shortage of about 390,000 homes, affordable housing was the top concern of 18-to-34-year-olds in the run-up to the country’s November election , according to an Ipsos poll.
Wilders’ Freedom Party claimed that the Netherlands’ backlog in house-building “simply cannot match the open-border policy and the huge population growth” and that Dutch people “have to spend more and more time on the [social housing] waiting list, and are strongly discriminated against.”
“We’ve reached the breaking point of a situation that has been on a slow burn for years,” said Sorcha Edwards, secretary-general of Housing Europe, which represents public, cooperative and social housing providers. “For a long time, politicians were happy to ignore the issue because it affected low-income groups that vote with less force, but now it’s affecting people that take note: the offspring of the middle class and even the middle class itself,” she told POLITICO in June, ahead of the European Parliament elections that saw a surge of support for right-wing populists.
A problem built on many foundations
But reducing the housing crunch to just a problem caused by migration does a disservice to understanding the full complexity of the causes. Ultimately, it comes down to the rich world just not building enough housing. But there’s a stew of contributing factors for that, with the ingredients differing by country, according to Edwards and others working in the housing field. Yes, migration has exacerbated the problem; but so, too, has a spree of buying by well-heeled foreigners wanting second or vacation homes in some European cities and desirable semi-rural and coastal areas.
In Britain, much of the problem has to do with byzantine planning laws crimping house builders and so-called green belt rules protecting land from development. In the Netherlands, EU anti-pollution rules act as a deterrent on new construction, and tax policies have skewed the market away from social housing. And in the Czech Republic, the least affordable real estate market in Europe , real wages have just not kept up with house prices.
The soaring cost of housing has loomed over the presidential race in the U.S., where across-the-board inflation has been squeezing household budgets and has soured voters’ view on an otherwise booming economy. A yearslong construction slowdown has collided with high interest rates, which is making finding a place to live — to buy or to rent — more challenging than at any time in recent history .
The Federal Reserve hiked interest rates sharply to combat inflation after the pandemic — which, while helping to bring down inflation overall, has made it far more expensive to purchase a home.
A Gallup poll in May found the cost of owning or renting a home ranked as Americans’ second-most important financial problem, after the general high cost of living. It ranked third among young voters in a Harvard poll this spring, with 56 percent of those surveyed calling housing a top concern.
The issue has taken on increasing urgency within the Biden White House, which in recent months has rolled out a suite of proposals for making housing more available and affordable. But the most significant moves require legislation, and there’s no likelihood a rancorously divided Congress will move on them.
The result is that current homeowners are now reluctant to trade up to a better home for fear of taking on a heftier mortgage. That, in turn, has limited the supply of starter homes available for first-time buyers, and left more people competing for rentals.
“Mortgage interest rates remain one of the last acutely abnormal things that suggest to people the economy is not all the way back to normal,” said Tobin Marcus, a former Biden adviser and current head of U.S. policy and politics at Wolfe Research. “The question is how much capacity the federal government has to do anything about that.”
After stalling at the start of the pandemic amid economic uncertainty, home sales and values quickly picked up. In the U.S., the median price for an existing home in March 2020 was just $280,700 — but by the first quarter of this year it was $420,800, according to data from the National Association of Realtors.
“The bottom line is we have to build, build, build,” Biden said in a speech to the National League of Cities. “That’s how we bring down housing costs for good.”
But that will take years.
Oh, no, Canada
Over the border in Canada, incumbent Prime Minister Justin Trudeau is also facing housing headwinds. His bleak reelection prospects, after nine years in power, have been battered by the issue, with young voters abandoning him in droves. High prices were already shutting out new buyers before the pandemic, but since then they’ve soared even more.
Observers blame a combination of inadequate homebuilding on top of an influx of temporary residents and immigrants, including hundreds of thousands of new international students. The number of non-permanent residents in Canada jumped 46 percent between July 2022 and July 2023, hitting approximately 2.2 million.
The perceived impact of newcomers appears to be moving the dial on domestic support for immigration. A Research Co. poll released in June found that 44 percent of respondents said immigration was "having a mostly negative impact in Canada," a 6-point increase in a year.
Immigration Minister Marc Miller insists the problem has far more complex causes than international students squeezing out renters and homebuyers.
“It'd be naive to pretend that volume wasn't impacting housing. But there's so many other factors," Miller told POLITICO, including a lack of new construction in growing cities. Miller acknowledged, though, that tough conversations about immigration and housing have seeped into Liberal caucus meetings. Those “can be quite heated,” he conceded.
Earlier this year, Miller capped the numbers of work and study visas, but Ben Rabidoux, a housing commentator and founder of North Cove Advisors and Edge Realty Analytics, said the damage among people’s perceptions of the problem was done. “I really strongly believe that a lot of the simmering anger that we have is directly or indirectly related to these just incredibly misguided immigration policies,” he adds.
Trudeau once enjoyed a massive advantage among younger voters. He scooped up 45 percent of them in 2015 on his way to a landslide win. A mid-June survey from Abacus Data pegged his party's support with the country's youngest voters, aged 18 to 29, at just 20 percent.
The prime minister acknowledged millennial and Gen-Z anxiety in a private town hall conversation with Generation Squeeze, an advocacy group that has pushed for pro-youth housing policies.
"There is something fundamentally different in this generation" compared to their parents and grandparents, Trudeau said at the June 25 event.
It's not clear his government's solutions — billions in homebuilding funding and incentives, as well as savings accounts for first-time buyers — will improve wobbly polls.
Shortages in the EU
From 2010 to the second quarter of 2023, the European Union witnessed a significant jump in property values, with housing prices surging by 46 percent and rents by 21 percent, outpacing overall inflation or wage increases.
Whatever the mix of local factors, the “ scarcity of affordable housing is a shared problem across Europe , despite fundamental differences between housing systems,” according to Maurice van Sante, senior economist at ING, a Dutch-based multinational banking and financial services company.
But as populists push a simple link between housing and migration, many of the young are hearing the message loud and clear. Recent polling suggests Gen Z and millennials are becoming more anti-immigration than older generations in some parts of Europe. In recent national elections in the Netherlands, Finland, Sweden and France, young people voted in unprecedented numbers for nationalist and Euro-skeptic parties.
In Huizen, a town of modest homes housing a population of 40,000 just half an hour from Amsterdam, local authorities set up 30 temporary housing units for Ukrainian refugees in December on a field in a residential area, despite protests by locals, who complain that it could bring down the value of their homes.
“When you look at the asylum policy, there are refugees who get a home within six months, and then young people who wait for years and save up to buy a home. How bizarre is that?” Angeline, a 37-year-old mother of two who works in the health sector, told POLITICO.
“Everything is being arranged too well for outsiders but when you look at some Dutch people,” her husband Niels added, they are in debt, “live on the streets and nothing is being done for them.”
Unsurprisingly, Wilders’ anti-migrant rhetoric resonated in Huizen, where his party secured the largest share of the vote in the European elections — 17.3 percent, compared to 3.1 percent of the vote in the 2019 EU elections.
Johan Vaarkamp, a 68-year-old agrarian worker, echoed Angeline’s sentiments, saying it was “time to sound the alarm.”
Many of his friends switched party affiliation in the previous election, he said, choosing to vote for Wilders’ nationalist populist Party for Freedom, or PVV. He voted for a populist party promoting farmers’ interests that is now in a coalition with Wilders.
While Vaarkamp’s generation is not among those looking for their first homes, their children are and they’ve felt the consequences.
“If you’re in your 30s and you want to get a home, then there’s no way,” he said. His 38-year-old daughter has a friend who still lives at home with her parents because of the shortage. “She’s been on the waiting list for social housing for 20 years. Nothing is freeing up.”
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