Real Estate for a Shrinking World

Regular Thesis Driven readers know that I’m as pro-housing as they come. Home prices and rents in the places with the most economic opportunity—like New York and San Francisco—are a national scandal, and I’m very much in favor of legalizing more housing to combat rising costs.

But one of the most alarming macro trends of the past decade has been the worldwide fertility collapse which has led to rapid downward revisions of both national and global population growth estimates. With a total fertility rate of 1.6 children per woman (versus a replacement rate of 2.1), the US is now entirely dependent on immigration to maintain its population—immigration that is as politically unpopular as it has ever been.

It’s possible that the next decade will bring us a shrinking America. In that context, it's worth asking: will we still need to build things?

Today’s letter will explore the population crunch from a real estate perspective. Specifically, we’ll tackle:

• How the global population crunch is materializing;
• Politics and population projections;
• Examples from around the world, including many nations far worse off;
• Implications for the real estate industry across sectors and predictions of when problems may start materializing.