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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

#191

Post by closeparen »

startupdiscuss wrote: post #62
CPLX wrote: post #47

Earlier quoted context omitted.

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…

That's not snarky, and you have a point. But even if things seem "really obvious" and we can tell "just by looking at the facts", I feel better if someone has looked at the data and shown that to be the case. We aren't living in the feudal era, and a lot of people like to think that the reason people move to the cities is because of (for instance) bars and restaurants, museums and the opera, high-paying jobs and so o…

It takes relatively wealthy people (or at least big spenders) to make trendy upscale bars and restaurants work.

Museums, opera, symphony, most theater, etc. are kept alive by the philanthropy of the local rich.

High salaries are paid by rich VCs looking for return, or companies with more cash than they know how to handle commissioning prestige projects. (How many people at Google actually work on revenue generation? That doesn't happen at Joe's Computers in Nowheresville).

Concentrated wealth is the reason cities can have these things.

Re: Rents in Megacities Can't Go Up Forever

#192

Post by s0rce »

halbritt wrote: post #153
lordCarbonFiber wrote: post #83

Earlier quoted context omitted.

While there's certainly some true to that statement, I think you're being overly cynical. People congregate in cities to be near _people_ . For sure with a good internet connection I could do all my work from small town america living in a mcmansion at a quarter of my rent; instead I live in nyc. Access to artistic communities, robust public transit, diverse food and culture, and a fluid job market makes the value ad…

Not sure where to jump into this thread: There are many good reasons the bay area is the hub of tech development. It all started with proximity to two very good computer science schools; Stanford and UC Berkeley. At this point, there are more tech-savvy investors here than anywhere else. Ongoing development of technology is an iterative process and by necessity, must be a productive one to get to market more quickly.…

Maybe it was related to the proximity to silicon valley which wasn't due to the computer science departments of Stanford and UC Berkeley, although Stanford did likely place a role.

Re: Rents in Megacities Can't Go Up Forever

#193

Post by GFischer »

vonmoltke wrote: post #51
deanCommie wrote: post #43

Earlier quoted context omitted.

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?

Theory says you'll be run over by the next VC-funded Facebook in your market, and will have to subsist by being a niche business (better service or catering to certain segments).

So, either the next Facebook or lifestyle. Of course, real world is not perfect so there's space for medium-sized businesses, but they're not an economic optimum (they're leaving money on the table either way).

Re: Rents in Megacities Can't Go Up Forever

#194

Post by kbenson »

ryandrake wrote: post #99
kbenson wrote: post #78

Earlier quoted context omitted.

Because if you're growing organically some VC funded competitor is going to try to grow exponentially, and swallow you up or put you out of business. There's no middle ground because all that looks like to people trying to get a return on their investment is that you aren't trying hard enough. That either means they push you harder, or they fund a competitor if you aren't beholden to them.

Not all niches will attract VC funded competitors. There are plenty tech companies that are profitable, well-capitalized, have moderate organic growth, and compete with similarly sized companies. There certainly is a middle ground.

> There are plenty tech companies that are profitable, well-capitalized, have moderate organic growth, and compete with similarly sized companies.

Sure, but that just means that they and their competitors have already grown to the point where the market is saturated, and any further growth they are experiencing is because the market is growing or to the detriment to their competitors. They probably already had an exponential growth period, although it could have been short-lived if the market is small (and if the market is really small, may not have looked like exponential growth at all, and may have just looked like becoming profitable and leveling out).

You're right that not all niches will attract VC funded competitors, but I think the number niches that meet that criteria are actually very small, in this industry. There's always someone that thinks they can disrupt it somehow, or market it better to show people the market is actually much bigger than it appears. Keep in mind, the VC funded competitor doesn't have to succeed in it's task of taking over or changing the market to have extremely detrimental effects on companies that aren't working with the same paradigm.

Having a market large enough to support a few small companies but not large enough to warrant VC funded competitors that stays that way seems a rarity.

Re: Rents in Megacities Can't Go Up Forever

#195

Post by mabbo »

gabbo wrote: post #150
trapperkeeper79 wrote: post #98

This article crystalizes a point that was vague in my mind: "megacities have a problem making it affordable to raise large or even medium-size families. How many of us could live in San Francisco, London or New York City and bring up three children in a decent neighborhood with good schools? Only the already well-to-do can manage such a feat.". As a mid-30s person with a new baby, I don't see how the numbers work for…

Toronto housing has to come back to reality at some point. Rent and ride it out if you can, consider Montreal if you can find a good job and are OK with French, otherwise if you can stomach being away from home you're much better off financially as a dev in the US.

I'm contemplating just putting my Toronto condo on the market for an outrageous price, like 2-3 times what I paid for it 18 months ago. If anyone accepts that price, it's a sign that something is terribly wrong, and that I need to get the hell out of this city.

Re: Rents in Megacities Can't Go Up Forever

#196

Post by SolaceQuantum »

humanrebar wrote: post #123
lordCarbonFiber wrote: post #83

Earlier quoted context omitted.

While there's certainly some true to that statement, I think you're being overly cynical. People congregate in cities to be near _people_ . For sure with a good internet connection I could do all my work from small town america living in a mcmansion at a quarter of my rent; instead I live in nyc. Access to artistic communities, robust public transit, diverse food and culture, and a fluid job market makes the value ad…

> Access to artistic communities, robust public transit, diverse food and culture, and a fluid job market makes the value add for me a no brainer. Other than the public transit, all of the above are available in any number of towns and cities in the U.S. A half a century ago maybe you had to go to NYC to hear great live music and eat Cambodian food, find specialty ingredients, or get access to off-beat books. But tha…

I've lived in NYC and Buffalo, a reasonably large city 8 hours north of NYC. The two experiences are not at all comparable, particularly with food and diversity in culture. Although a large Chinese population exists as international students in Buffalo, you can't get anywhere near the close-as-authentic-as-you-get-in-the-states Chinese food in Buffalo that is available in spades in NYC area(particularly Flushing,Queens). this applies equally to Indian, Ethiopian, etc. cuisine. Many particular specialties that I enjoy aren't available in Buffalo at all.

Re: Rents in Megacities Can't Go Up Forever

#197

Post by michaelcampbell »

scurvy wrote: post #115
elindbe2 wrote: post #101

Earlier quoted context omitted.

NYC is more the equity side of finance, Wall St. and all that. Chicago is home to the largest futures exchange in the world, the CME and the largest options exchange, the CBOE.

What about debt?

Until recently, bond trading was dominated by NYC (and back in the day, almost one firm; Salomon). It may still be, but I've been out of the industry for a while so am not sure about modernities of it.

Re: Rents in Megacities Can't Go Up Forever

#198

Post by tostitos1979 »

verulito wrote: post #187
Arizhel wrote: post #112

Earlier quoted context omitted.

>How many of us could live in San Francisco, London or New York City and bring up three children in a decent neighborhood with good schools? The simple solution is to not have any children. Leave that to extremely rich people and very poor people. Society obviously does not support child-rearing, given the cost of housing and the lack of support from employers, so why fight it?

We had two children and the cost isn't remotely an issue. However, we're a dual-income dual-engineer family who moved to Austin and bought in 2012. Our house value has doubled in price since we bought it though. It's very possible with perfect decisions, lots of sacrifices, and freakishly good luck.

You are missing the point. The problem is prices have doubled since 2012. People who didn't time it right are hosed. And there was no obvious reason why prices should go up so much so fast.

Re: Rents in Megacities Can't Go Up Forever

#199

Post by humanrebar »

wan23 wrote: post #118
mehaveaccount wrote: post #103

Earlier quoted context omitted.

I have to disagree strongly. I live in NYC for work. I actually hate living here and I don't like the people I'm around. I am desperately looking for a way out of this city but my family lives on Long Island, so it's hard to justify going to another city.

Why don't you move to Long Island and commute? If you don't like the city there are plenty of smaller towns nearby and it's cheaper too.

NYC doesn't have a monopoly on bad commutes, but isolating yourself even more with an even longer commute doesn't solve culture mismatch issues. Besides, it's not a great lifestyle anyway.

Re: Rents in Megacities Can't Go Up Forever

#200

Post by bradstewart »

pavel_lishin wrote: post #168
ryandrake wrote: post #110

Earlier quoted context omitted.

> 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 We're talking about tech workers though. I don't know about you, but my whole life as a tech worker, I've gotten up at the crack of dawn, worked all day, come home late at night exhausted and passed out sleeping until the next day. I don't even kno…

> It doesn't make sense that tech workers would care about these things because we never get to take advantage of them. Not all tech workers are 12-hour-a-day workaholics. Why are you killing yourself at work?

Because I legitimately find work more stimulating and enjoyable than most other things. Which isn't to say I don't do other things I find enjoyable, but I have no qualms about working 10+ hours a day.
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