Canada’s population is growing by about 500,000 per year.  The new residents need housing.  Where should these new homes be built?

Readers can probably predict that I’ll recommend letting the market determine the location of the new housing.  But let’s suppose you had other goals, beyond market efficiency.  Suppose you wished to preserve Canada’s beautiful wilderness areas.  In that case, where would you build the housing?

British Columbia is an especially beautiful Canadian province, fully of snow-capped mountains and deep fiords.  If the goal were to preserve that wilderness, then the optimal location of new housing would be in existing urban areas—build up, not out.  That also happens to be the solution that would be adopted in a free market.  And that’s exactly what Canada’s indigenous people have decided to do.  They are planning to erect a massive housing development full of high rise buildings right in the city of Vancouver (on native owned land.):

Yes, I get the joke—and it’s kind of funny.  And at the risk of being a killjoy, I’d also like to point out that this actually is the “pro-wilderness” solution.  

Ronald Coase would not be surprised.