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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

#51

Post by vonmoltke »

deanCommie wrote: post #43
zimzam wrote: post #25

Earlier quoted context omitted.

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'…

Why does every company in this industry need to be either a "lifestyle business" or a Google wannabe? What ever happened to growing a business organically over time, or with non-VC investments?

Re: Rents in Megacities Can't Go Up Forever

#52

Post by falsedan »

eli_gottlieb wrote: post #13
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…

>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 it, although I'd say it's access to capital & advice from wealthy people.

You can code and create a product anywhere; you can meet VCs by flying into SFO (VCs might fly to you if you are extremely successful already).

Re: Rents in Megacities Can't Go Up Forever

#53

Post by CPLX »

startupdiscuss wrote: post #42
amyjess wrote: post #19

Earlier quoted context omitted.

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.

Exactly. As I watch Downtown Brooklyn seemingly magically transform itself overnight from a collection of third-tier forgotten university offerings to a genuine nexus of tech and engineering education[0] I'm reminded that this dynamic does indeed work in both directions.

[0] https://thebridgebk.com/engineering-hub-downtown-brooklyn/

Re: Rents in Megacities Can't Go Up Forever

#54

Post by vonmoltke »

startupdiscuss wrote: post #42
amyjess wrote: post #19

Earlier quoted context omitted.

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.

Houston is, for some definition of "tech". It's just more focused on petroleum and ocean engineering, which don't get a lot of play I'm these circles.

Re: Rents in Megacities Can't Go Up Forever

#55

Post by jimlawruk »

bpicolo wrote: post #8
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…

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…

Exactly right. Young people today would rather be poor in a "trendy" city, than rich in a not so trendy one. It has almost become a badge of honor of how much you can rough it to stay afloat in X trendy city. I am guessing it was not like this for previous generations, and I think it leads to too much homogeneity of culture. I think we should start to encouraging people to go to a uncool city and help build it up and make it cool.

Re: Rents in Megacities Can't Go Up Forever

#56

Post by dcosson »

geff82 wrote: post #16
rco8786 wrote: post #9

Earlier quoted context omitted.

Technology has a long way to go before it completely disrupts human evolution and the desire to be close to people with similar values.

You are right. But still I don't quite understand why there are not more smaller dynamic centers popping up. Of course it is NOT only SV and NYC any more. But there would be many other places that are nice enough to attract IT in a substantial way.

It seems riskier to employees if that were the case - if you get laid off or tired of one company in one of these small regional centers and there's only say 5 companies total to choose from, chances are you'll have to uproot your life and move to a new city for your next job which is a big inconvenience.

I think some part of the network effect of big tech hubs is the option value. If you're in the Bay Area you can have the best of both worlds - stay in one place as long as you want for your personal life/family, and still have the possibility of working at any of thousands of the best companies of all sizes and switching between them if you need to.

Re: Rents in Megacities Can't Go Up Forever

#57

Post by Finnucane »

rco8786 wrote: post #9
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…

Technology has a long way to go before it completely disrupts human evolution and the desire to be close to people with similar values.

Technology has been disrupting human evolution since we learned to bang the rocks together.

Re: Rents in Megacities Can't Go Up Forever

#58

Post by bpicolo »

jimlawruk wrote: post #55
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…

Exactly right. Young people today would rather be poor in a "trendy" city, than rich in a not so trendy one. It has almost become a badge of honor of how much you can rough it to stay afloat in X trendy city. I am guessing it was not like this for previous generations, and I think it leads to too much homogeneity of culture. I think we should start to encouraging people to go to a uncool city and help build it up and…

I was speaking with a friend about this recently. I do think we'll see growth in smaller cities, kind of like how Austin exploded. I think an interesting aspect of this is the job problem. Jobs are getting more scarce outside cities as industries change it seems, and I wonder how that might affect population movement.

Re: Rents in Megacities Can't Go Up Forever

#59

Post by Bartweiss »

amyjess wrote: post #31

I disagree with the article's premise that urban growth is driven by creativity. For example, this doesn't explain Tokyo. Japan's capital of creativity is Osaka; Tokyo doesn't even come close.

Doesn't ubranization drive urbanization? I mean, people (myself included) treat living in cities as end in itself. People pay more of their income in rent just for the access and experience of urban life. So yeah, I think Cowen's justification is off.

There is a second layer where I agree with Cowen more, which is that urban cash flows need some 'engine'. People can only pay based on their salaries, and some fraction of spending in a city flows out (to food, industry, etc). So yeah, having a major economic driver raises your price cap, but it doesn't have to be creative. It just has to be something you can effectively do in a city and get money from elsewhere. I don't know what it would be for Tokyo, but in my home town it was urban-friendly manufacturing not creativity.

Re: Rents in Megacities Can't Go Up Forever

#60

Post by robterrin »

reverend_gonzo wrote: post #33
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 live in Chicago. I love it here because of everything else it has to offer. I have everything almost everything I need available to me within walking distance from home. That includes grocery store, dive bars, cheap restaurants, high end restaurants, clubs. For anything else I may want to do (concerts, sports games, plays, comedy), there are dozens of world class options within a ten minute cab drive / 30 minutes o…

I've heard this pitch for Chicago many times, and it seems reasonable if you are in the one of the industries, Tyler mentions, that are more diffuse.

The main problem with Chicago is it lacks an anchor industry. Is it the best place to be for finance? No, that's NYC. Is it healthcare? Boston, Baltimore, Cleveland or Rochester. Energy? Houston. Technology? SF. Entertainment? LA or NYC. Politics? DC.

What exactly is Chicago good at? They have Wilco, so that's cool.

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