Urban Renaissance Institute

Lawrence Solomon
National Post
September 25, 2004

If Canada’s politicians want to protect the homes and property of Canadian citizens, Job No. 1 is opening Canada’s doors to immigrants.

Population growth is by far the largest driver of real estate appreciation – several times as important as interest rates and other economic fundamentals, reports the IMF in a release this week. Yet most Western countries, Canada included, have birth rates too low to sustain their existing population, and depend on immigration to prevent population decline. Without past immigration, our properties – typically our most important assets – would today be worth much less. With more open immigration, our properties would appreciate faster still.

The IMF’s findings, contained in its forthcoming World Economic Outlook, analyzed prices in an 18-country study covering more than three decades. It found that for every 0.25% increase in population growth, house prices appreciate by 1%. For Canada, which increases its population through one of the world’s highest immigration targets– the government aims to bring in about 300,000 immigrants a year, or 1% of our population – immigration alone could represent a hefty 4% appreciation in the value of our homes.

If the government were to aim higher and bring in 600,000 immigrants a year, our real estate values could be up by 8% a year due to immigration. Other factors that boost real estate – growing affluence and growth in credit – could appreciate our property further.

The benefits to Canadians’ property values from immigration are not felt evenly across the country, however. Most immigrants to Canada– about 75% of them – settle in just three cities, Montreal, Toronto, and Vancouver, giving homeowners there a real estate windfall.

Not so in many smaller cities, which have trouble attracting fresh blood and are in danger of stagnating. And not so in most small towns and rural areas, which don’t just stagnate – with their young leaving for larger centres, their old no longer reproducing, and outsiders no longer coming in, farmers often can’t find the help they need, communities are often in severe decline, and properties are often entirely unmarketable.

The federal immigration target is based on bureaucratic estimates of how many immigrants Canada can comfortably integrate into our economy. This target, because it is an average that in practice applies nowhere in Canada, is irrelevant. Some cities easily exceed the 1% target – the Toronto metropolitan area receives twice the national target – while most cities receive a small fraction of Canada’s immigrants and most towns and rural areas none at all. To add to the target’s irrelevancy, the cities that exceed the immigrant targets thrive while many that fall short suffer.

The government tells us that immigrants to Canada favour our cities because cities have more jobs, cities have more services, and cities have other immigrants to whom newcomers can relate. All this is true, but this explanation ignores the overriding reason immigrants to Canada avoid rural regions: Our government through its immigration point system discriminates in favour of affluent, well-educated immigrants who would tend to settle in urban areas.

The point system effectively bans rural workers – poor, uneducated farmers from Africa and Asia, for example – from entry to Canada. If Ottawa didn’t exclude those who would naturally seek out farm employment, Canada’s rural areas could be bolstered with immigrant workers for farmers who have seen their children leave, and can’t find affordable help.

Those poor, uneducated immigrant farm hands would soon acquire their own patch of land, build their own homes and become the next generation of farm owners, just as past generations of farmers helped build this country. In the process of looking after themselves, rural immigrants would benefit their neighbours by creating a market for rural land – raising rural land values just as urban immigrants raise urban land values.

By opening the door to immigrants of all occupational backgrounds, low skilled and high skilled alike, the federal government would be doing more than providing a boost to property values coast to coast. It would also be providing us with an insurance policy.

The IMF, in its recent report, found that some 40% of house-price movements stem from global factors, such as interest rates and changes in stock market values. If real estate is now overpriced, as the IMF warns, and a global correction takes place, Canada’s real estate, and the Canadian economy, would take a hit.

The hit would be cushioned, however, and perhaps entirely negated, if the government allowed more open immigration to protect our home and property.

BACKGROUND SOURCES

A reader responds

Poor, uneducated immigrants can’t take on our farms

October 1, 2004

Re: Lawrence Solomon, “Thank immigrants for real estate gains,” Sept. 25. Mr. Solomon’s notion of allowing poor, uneducated farmers from Africa and Asia to immigrate to Canada in order to work on farms is a clear example of how little he understands the farming industry.

Modern farming requires both education and access to financial resources in order to maintain the operation, the two criteria Solomon is willing to waive. The small family farm has in many cases ceased to be a viable economic unit, hence the exodus of the sons and daughters from these farms. It hardly seems possible, then, that they could now support an immigrant family, as Solomon suggests.

In my part of eastern Ontario, hundred-acre farms and buildings typically sell for $300,000 plus. Dairy farms, if you can find them, can fetch a million and more. It would be interesting to know Solomon’s economic plan for a immigrant who would be working for minimum wage, and then magically they would, in Solomon’s words, “soon acquire their own patch of land.”

In the future Solomon might consider doing a little research before committing ideas to print.

Jeff Spooner, Kinburn, Ont.

Related articles and speeches:
Thank immigrants for real estate gains
The key to rural immigration in New Brunswick
Remitter revolution
Elitist immigration policy bars poor, unskilled workers
New immigrants enrich Canadian cities
Adding immigrants will improve the environment
Mongrel nations
The next great power
Give us your healthy, your wealthy, your wise

Lawrence Solomon

September 25, 2004

A Workshop at the 17th Annual Conference of the Association of Treasurers of Religious Institutes

“Hope In an Unfinished World”

Courtyard Marriott–Downtown Toronto

September 25, 2004

I’m delighted to be here today. Some of you will know the foundation I work for, Energy Probe Research Foundation, and particularly its international division, Probe International. Several Religious Institutes have very generously supported our foundation’s work over the last 25 years.

You’ve supported our work to protect the public from the dangers of radioactivity, which especially affect the very old and the very young, including the unborn. You’ve supported our work to protect people in the Third World from being flooded off their land by large hydro dams. You’ve supported our research showing that there is no problem of overpopulation, that the world has resources enough for all of us, and for future generations, too, if we only use our resources intelligently.

Today, the subject is immigration but in some ways the subject is no different from some of the ones I have just mentioned. It is still about denying rights to those most vulnerable in our society, rights that others enjoy. It is still about the fear that we have a shortage of natural resources, and a surplus of humans, and that the only way to protect resources from humans is to limit the number of humans.

We’re here to discuss how immigrants improve the environment and the economy. I will often discuss these together, because the environment and the economy work hand in hand.

I’d like to start by discussing how immigrants affect the environment, and the environmental arguments against immigration. It helps, in understanding some of these arguments, to keep in mind that many environmentalists view humans as somehow apart from the environment, or as having no special status on this earth. They see humans as just another animal, to be managed for their own good. In some countries, for example, western environmental organizations work with the World Bank and the national government to establish conservation reserves that will protect an ecosystem from undue exploitation. The plans sometimes involve forcibly relocating the region’s indigenous tribes, in order to protect the local flora and fauna. These environmentalists reason that the rights of humans shouldn’t trump the rights of animals, and that the tribes will be better off elsewhere, but not the animals. If you view humans as not being special, as just another animal, and an inherently rapacious animal at that, it is easy to think this way.

One of the chief environmental arguments against increased immigration to Canada is that immigration will lead to the loss of our wilderness. This is a plausible sounding argument. The more that people will come here, the more land will be taken up by housing developments, the more pressure there will be to expand our settlements further and further out, the more pressure there will be to exploit our forests, minerals and other natural resources.

This sounds plausible but it flies in the face of reality. Almost all immigrants to Canada settle in cities, and predominantly to just three cities. Almost half of immigrants settle in the Toronto area, and another 25% settle in Montreal and Vancouver. In smaller numbers, they go to Edmonton, Calgary and Winnipeg.

Immigrants settle in cities because the cities have jobs, the cities have services, and the cities have other immigrants with whom they can relate. Cities are highly efficient – the most resource efficient type of settlement. People consume less fuel per capita in cities than in either suburbs or rural areas, for example, because distances are relatively short. People can walk to neighbourhood shops, children don’t need to be bussed, public transit is available. City industries are also resource efficient. People make their living by providing services, high-tech as well as low-tech services, not by clear-cutting forests or open-pit mining.

The more people settle in cities, the greater the service economy becomes, the fewer raw resources we need per capita to earn our living. Cities have become so efficient, in fact, that most of the rural resource industries have become redundant, and uneconomic. We chop down most of British Columbia’s coastal forests at a loss, for example. We keep chopping it down only to keep forest industries alive, so that forest towns don’t become ghost towns.

Immigrants don’t cause the exploitation of our wilderness. The wilderness would be exploited at the same rate, with or without immigrants, because they are exploited for political reasons, not for economic reasons. Immigrants act mainly to make our cities work better. One reason is that the larger the urban population, the better that public transit works, the more efficient that all urban infrastructure can be used – our water works, our garbage collection, our street cleaning, our fire stations – they’re all more economical and less resource intensive when they service compact, well populated cities.

One of the great myths in our society, one that became especially prominent in the last few decades, is that people prefer to live in the suburbs, in low-density surroundings. This is why we have sprawl, the myth says. I am now finishing a book on sprawl – it is a short history of sprawl in the Toronto area – and I can report to you that people have never favoured sprawling settlements in the Toronto region. We have sprawling settlements because government policies act to disperse the population, not because most people would rather spread out in low-density communities.

I began my research by looking at Toronto’s earliest settlers – the Iroquois who moved here some 1000 years. They lived in dense semi-permanent settlements, in villages of about 2.5 acres in size, populated with about 300 people each. The density of those communities of old far exceeded that of any of today’s North American communities, including Manhattan, the densest urban area in the U.S., and Toronto’s Annex, one of Canada’s densest community.

As Indians became better organized politically, villages increased in size. Many of them doubled, to five acres, and some reached 15 acres, with a population of 2000 people or more. Although they spanned a larger geographic area, however, the population density of these communities, if anything, increased.

When the white man came to North America, the first communities were also dense, and as they evolved, they remained dense. Manhattan became the densest city on the continent, with more than 100,000 per square mile at the turn of the last century. Toronto was also dense, with about 20,000 people per square mile. Manhattan is still dense today, although not half as dense, at about 40,000 or 45,000 per square mile. Toronto, without its newly amalgamated suburbs, remains close to its historic density of about 20,000 people per square mile. In both cities, some of the densest neighbourhoods – Greenwich Village in New York, the Annex in Toronto – are also among the most desirable to live in.

Manhattan and Toronto are great vibrant, immigrant cities that remain dense despite efforts by government to disperse the population. Garden suburbs were once fashionable in government circles, for example, so governments tried to promote them by clearing slums from the downtowns of cities, and relocating people on the outskirts. Parts of Toronto were decimated this way, including highly populated areas just a few blocks south of this hotel, as well as areas of what we call Cabbagetown. The dense old areas of Cabbagetown have become gentrified and are now one of the city’s most ch-chi neighbourhoods. The part that the government cleared, in order to build idyllic lower density housing, has become a true city slum, crime-ridden and undesirable to live in.

This has been the great, untold story. People organize themselves in very tight, dense communities, when left to themselves. While people also enjoy getting out of the city, to campgrounds, to their cottages and to other retreats, most people have no tendency to sprawl. If they can afford it, they prefer compact, elegant surroundings. Just a few blocks north of us is Yorkville, one of Toronto’s toniest districts. The Governor General has her private home there, as do many others that we consider the rich and famous. Yorkville is a very dense neighbourhood – small lots, homes built tight next to each other, lots of commercial establishments.

There is nothing to the belief that people, left to themselves, will build ever more sprawling communities, to the environment’s detriment. Left to themselves, without government interceding, such as to keep unviable remote communities alive, or to subsidize the development of suburbs, most people will naturally gravitate to cities, to be among one another. With more countries becoming free around the world, and with our own governments interfering less today in people’s settlement decisions, we are seeing a worldwide movement of people to cities, not just to cities in the Third World but to cities in the western countries. The immigrants who are coming to Canada are part of this historic movement, and we should be grateful that they are coming. They are helping to make our cities function better both economically and environmentally.

Some worry that too many immigrants are coming to Canada’s cities, that the result will be slums and crime and an unmanageable morass. But there is no plausible scenario in which we will receive more immigrants than our cities can comfortably integrate. To give you an extreme example, if the Toronto area became as dense as Manhattan today, Toronto alone could accommodate a population much greater than that of all of Canada’s.

Before opening up this gathering to a discussion, I’d like to mention one other environmental argument against immigrants. It is a population explosion argument, a moral argument of sorts. People in the Third World breed too much, this argument goes. This breeding is unsustainable, leading to poverty and hunger and the migration of humans from the Third World to the West. If we accept these migrants, we not only invite similar problems here but – and this is where the morality comes in – we act as a pressure valve for Third World governments. Much better to keep the immigrants out and force the Third World governments to take the population control measures needed to keep their people in check.

The problem with this argument, of course, is that people don’t leave their homelands because of population pressures. They leave because of repressive governments at home, or better economic opportunities abroad. When then Irish came to the cities of North America, they were leaving a low-population country. Africa has a relatively low population density. African migrants moving to Western countries often find themselves in a higher population-density society.

There are problems with many, many other arguments, too, that people make, to justify keeping immigrants out. Let’s now discuss these other arguments, as well as the ones I’ve just raised, all together, in our workshop.

Related articles and speeches:
Thank immigrants for real estate gains
The key to rural immigration in New Brunswick
Remitter revolution
Elitist immigration policy bars poor, unskilled workers
New immigrants enrich Canadian cities
Adding immigrants will improve the environment
Mongrel nations
The next great power
Give us your healthy, your wealthy, your wise