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Rents in Megacities Can't Go Up Forever

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Re: Rents in Megacities Can't Go Up Forever

#41

Post by orangecat »

psyc wrote: post #3

Not literally forever, of course, but I think it's naive to say people's inability to have the lifestyle they want will deter increasing rents. Empirically, society on balance doesn't care one tiny bit how much hardship people endure, and people will endure the hardship. I'm not seeing what mechanism is assumed to counter that.

I'm not seeing what mechanism is assumed to counter that.

Increasing supply. Which in this case is difficult due to the alliance of existing property owners and useful idiot "anti-gentrification" protestors.

Re: Rents in Megacities Can't Go Up Forever

#42

Post by startupdiscuss »

amyjess wrote: post #19
bpicolo wrote: post #8

Earlier quoted context omitted.

There are certainly a lot of factors. People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a comp…

You could always do what the founders of TI did: start your own university and grow your own talent. The University of Texas at Dallas, established explicitly for this reason, is probably the reason why Dallas is a tech hub.

Every large city has some schools.

Why is it that Austin is a tech hub (UT) but Houston is not (U of H, Rice)?

One theory: it is not the school, but the kinds of jobs people get after. Austinites went to work for Dell, and Houstonians went to work for Exxon.

Re: Rents in Megacities Can't Go Up Forever

#43

Post by deanCommie »

zimzam wrote: post #25
bpicolo wrote: post #8

Earlier quoted context omitted.

There are certainly a lot of factors. People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a comp…

See, here's the thing about coastal types: they are obsessed with getting the "top" talent, as if every project or startup requires it. What if most startups only need "good" developers to develop their mostly CRUD apps and don't need "the best" developers?

I mean sure, if you want to build a lifestyle company, and by the way there's no shame in that.

But the dream, and the reason all the coastal co's are in it, is to be the next Google or Facebook, or Twitter or Snapchat.

You could say an app to get people to come over to your house won't change the world, but people think hey maybe it will grow, or we'll just pivot, and wind up with the next Flickr or Slack, and that's certainly good enough.

Re: Rents in Megacities Can't Go Up Forever

#44

Post by ceejayoz »

supergeek133 wrote: post #21

> Rents in Megacities Can't Go Up Forever Yes it can, College Tuition is a great example. Instead of finding the cause and treating it, we just increase the amount of aid people have access to.

The rise in college tuition likely can't continue forever, either.

Re: Rents in Megacities Can't Go Up Forever

#45

Post by jseliger »

huffmsa wrote: post #35

But why not? There is no precedent to the contrary. Rent has always gone up, people are social animals. The needs of business are independent of people's desire to be with other people. Virtualization need to improve a lot before the experience of "group" is as good as real life.

Rent has always gone up

This is not true, see e.g. http://observationsandnotes.blogspot.com/2011/07/housing-pri..., http://marginalrevolution.com/marginalrevolution/2016/02/676..., and http://marginalrevolution.com/marginalrevolution/2016/08/lai... . The housing sector is excellent at providing housing services but has not over long periods of time and a wide array of places shown supernormal investment returns, adjusting for inflation.

Robert Schiller has written extensively on this. Here is on pop article on his work: http://www.usatoday.com/story/money/personalfinance/2014/05/...

Re: Rents in Megacities Can't Go Up Forever

#46

Post by startupdiscuss »

supergeek133 wrote: post #21

> Rents in Megacities Can't Go Up Forever Yes it can, College Tuition is a great example. Instead of finding the cause and treating it, we just increase the amount of aid people have access to.

Thank goodness we are too smart to try that with Healthcare.

Re: Rents in Megacities Can't Go Up Forever

#47

Post by CPLX »

startupdiscuss wrote: post #38
eli_gottlieb wrote: post #13

Earlier quoted context omitted.

>Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Because the real commodity being sold with the apartments and offices isn't net access or even lan…

That's a very interesting and original way of looking at it. It would also explain clustering in other areas (finance in NYC, Oil and gas in Houston etc). Do you have any links or references exploring that idea in greater detail?

I don't mean to have this come across as snarky, at all, but really the reference for this is the whole of human history.

Wealth is basically self-concentrating. Our political systems tend to end up with a few capital (and often Capitol) cities where the spoils from the plundering, both metaphorical and literal, end up.

The original article does present some interesting and relevant examples of countervailing forces at work as well, and is insightful. But the elephant in the room, as always, is that returns to capital and rent extraction are the primary drivers of wealth, and that the winners tend to keep winning and vice versa.

Re: Rents in Megacities Can't Go Up Forever

#48

Post by pc86 »

maccard wrote: post #14
geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

I wouldn't have any interest in living in many of those cities you listed, and as a result wouldn't be willing to move and work there. I'm sure there are many out there who feel the same.

But most people would be willing to work remotely regardless of where the company headquarters is.

Re: Rents in Megacities Can't Go Up Forever

#49

Post by rpazyaquian »

supergeek133 wrote: post #21

> Rents in Megacities Can't Go Up Forever Yes it can, College Tuition is a great example. Instead of finding the cause and treating it, we just increase the amount of aid people have access to.

...and then pass bills and laws to strip them of that aid.

Re: Rents in Megacities Can't Go Up Forever

#50

Post by carsongross »

For those interested, rentier classes appropriating all surplus value in an economy has been dealt with outside the typical marxist context:

https://en.wikipedia.org/wiki/Georgism

Georgism was wildly popular in the United States, but was memory holed after WW2 (along with distributism and Texas-style populist banking).

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