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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

#221

Post by lordCarbonFiber »

xienze wrote: post #11
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. Startups are built on young talent. Young people are obsessed with living in "the big city" and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable. So if you want young talent, you better set up shop in SF.

As a young person that grew up in the suburbs and deeply influenced by the "automobile life"; can confirm you'd have to quadruple my salary before I even considered moving back to the suburbs and sitting through a driving commute.

The false American dream of the oversized house, piles of kids, and picket fence just isn't appealing anymore to a growing population of young people. Life is too short to spend your prime someplace boring.

Re: Rents in Megacities Can't Go Up Forever

#222

Post by davidf18 »

savanaly wrote: post #201
davidf18 wrote: post #143

Earlier quoted context omitted.

> Or more accurately, why would the powers-that-be in a given area want to do this? Well, they generally would not. Except there are firms that must pay salaries that are not in real estate that have to pay their employees higher salaries in order to pay for the "rent-seeking" of landowners. It would benefit them to lobby and influence city council. Also, powers that be love monopoly pricing but there are laws to sto…

Tyler Cowen knows about rent seeking and Ricardo. He's not writing an encyclopedia article on the topic of rising housing costs though, he's writing a short piece for a broad audience about the demand side factors that might stabilize the price of housing in the long run, given (what we all take for granted) a more or less fixed supply.

I realize that he knows about rent seeking and Ricardo. He was addressing the issue of high housing costs and the question to ask is, why didn't he address the solution which is to reverse the rent-seeking that benefits wealthy landowners like President Trump over regular citizen renters and home buyers.

He should have written about this (article link was provided by another comment above) about how Japan solved the problem in Tokyo. We need a similar federal law in the US.

An article by Cowen that solves the problem by showing how successfully implemented the law was in Japan for Tokyo would have been far, far more interesting and implementable.

"The federal [Japanese] government recognized that these regulations were the problem, so in 2002, it passed the Urban Renaissance Law. The law stripped municipalities of the ability to control private property."

https://www.forbes.com/sites/scottbeyer/2016/08/12/tokyos-af...

Re: Rents in Megacities Can't Go Up Forever

#224

Post by jethro_tell »

closeparen wrote: post #191
startupdiscuss wrote: post #62

Earlier quoted context omitted.

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?…

It should be noted that the vast majority of the IT industry isn't startups. Lots of the drive of rent is not funded by VCs.

Re: Rents in Megacities Can't Go Up Forever

#225

Post by davidf18 »

differentView wrote: post #217
davidf18 wrote: post #156

Earlier quoted context omitted.

I love how many of the very people who claim to be critical of Trump and his wealth are the very people who help support zoning density restrictions that have made him far, far wealthier than he would otherwise be. If they started caring for regular people instead of wealthy people like President Trump then there would be more, affordable housing, and President Trump would not benefit from "rent-seeking".

It's one thing to support laws and regulations that happen to benefit Trump, it's another to want him to be the leader of your country.

> "It's one thing to support laws and regulations that happen to benefit Trump,"

But these left-leaning people claim they want to help the working class and others and are worried about inequality, yet they are the major cause of the inequality by making housing unaffordable through rent-seeking which benefits President Trump instead. In other words, they say one thing that they are for addressing the ills of inequality and instead support a policy that creates more inequality and benefits the very wealthy whom, in words only but not in deeds, criticize.

If they truly cared about inequality as they claim, they would reverse the unfair rent-seeking zoning density restriction laws.

Re: Rents in Megacities Can't Go Up Forever

#226

Post by Paul-ish »

antisthenes wrote: post #81
startupdiscuss wrote: post #62

Earlier quoted context omitted.

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…

The problem is, as often in economics, defining the terms and building a model that approximates life. It's not as trivial as a sorting algorithm or a simple 1 parameter regression. How do you define wealth concentration, for example? If your definition is flawed, you can throw out the entire model.

I suppose that is why people spend their entire academic career looking at these things.

Re: Rents in Megacities Can't Go Up Forever

#227

Post by pavel_lishin »

QuantumGravy wrote: post #216
pavel_lishin wrote: post #168

Earlier quoted context omitted.

> 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?

Why would you get paid six figures as a tech worker unless you're a workaholic? If you're not putting those hours in at work, surely you're putting in those hours in for both fun and personal growth at home, right? You're passionate about code, aren't you? ...no, I'm not honestly asking that, but those are the questions I'd expect to fend off.

> ...no, I'm not honestly asking that, but those are the questions I'd expect to fend off.

I've literally never run into anything of the sort in my life, and I'm making a six figure salary.

But then again, HN is a startup crowd. Things might be different when you're obligated to keep flapping or die(1).

1: http://i.imgur.com/aNTvfaE.jpg

Re: Rents in Megacities Can't Go Up Forever

#228

Post by mattm »

trapperkeeper79 wrote: post #108
brilliantcode wrote: post #37

The article title is spot on. Vancouver is not a megacity, therefore our rent will go up forever. It's unbelievable how relatively expensive rent is to income. I'm beginning to wonder why I'm putting up with Vancouver. I'm thinking I will take the first train out of here but that doesn't seem to be coming.

From Toronto. We have it worse. We are actually thinking of moving to Vancouver and renting :-p The rents in both places seem the same, except Toronto has shitty traffic, very limited tech opportunities, bad weather, and bugs. I looked around at jobs in Vancouver and it seemed a bit surprising how many tech employers there were. Can you shed light on why you are fed up with V? Where else are you considering?

It's more disheartening when you think that just a few hours away in Seattle a developer could be making 50-100% more salary.

Re: Rents in Megacities Can't Go Up Forever

#229

Post by maxxxxx »

refurb wrote: post #87
maxxxxx wrote: post #5

Earlier quoted context omitted.

In 2008 rents didn't drop much. I think landlords will leave places empty before they will drop rents too much.

That wasn't my experience. I knew several renters who renegotiated their rent down around 2008. We're taking knocking off 10%+. With rent control in SF that's locked in inperpetuity.

10% down is not that much compared to the previous run-up.
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