Rents in Megacities Can't Go Up Forever • Hacker News Board

Re: Rents in Megacities Can't Go Up Forever

#311

Post by gabbo » Thu, Mar 23, 2017, 9:07 PM UTC

brilliantcode wrote: post #283

mattm wrote: post #228

Earlier quoted context omitted.

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

It's around $126,000 USD /year in Seattle. [1] They didn't bother listing Vancouver because the salary here is so painfully low with entry level software engineering positions regularly listing $40,000 CAD /year or $30,000 USD /year, which is what a Starbucks barista in Seattle clears. As your experience goes up, so should your salary right? Not in Vancouver. It's around a couple hundred dollars per month in after-ta…

Your point is 100% correct, but IMO that link understates Seattle earnings potential. Probably doesn't include equity/cash bonus, which will happen a lot in Seattle and not so much in Vancouver.

Big tech company jobs in Seattle are extremely common, and a big tech company job in Seattle will pay you much more than $126k/year USD when you include stock/cash bonus.

Especially a few years into your career. If you're willing/able to be a dev at a big tech company, $200k-$300k/year is absolutely normal 10 years into your career (often much sooner). If you're great, $300k-$400k is completely possible.

Re: Rents in Megacities Can't Go Up Forever

#312

Post by travmatt » Thu, Mar 23, 2017, 9:08 PM UTC

matt_wulfeck wrote: post #91

davidf18 wrote: post #77

The author of the article is a professor of economics but doesn't state the true cause of rising housing costs: Market inefficiencies (or market failures) caused by politically induced market scarcity restrictions called "rent-seeking" which benefits landowners such as President Trump over people who rent or are purchasing housing. Rent-seeking was first illustrated by David Ricardo in the mid-19th century (IIRC) and…

You call them rent seekers, but the vast majority of the anti-builders I see around the Bay Area are home owners who worry about traffic or some such. It's not some big conspiracy to increase profits. It's incumbent nimbyism. Attend a town hall meeting where they're discussing a new apartment building and you'll meet them.

You literally described rent seeking activity

Re: Rents in Megacities Can't Go Up Forever

#313

Post by Spooky23 » Thu, Mar 23, 2017, 9:11 PM UTC

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?

Remember that you have consolidation happening too!

Places like Albany, NY were regional banking centers as recently as 30 years ago. In Albany's case, that was an artifact of the city's role as a transportation hub for canals and railroads.

As the role of banking has changed and the market has consolidated from a highly distributed model, its harder and harder to do business outside of large areas. If you're a midsize business, it's hard to get lines of credit simply because nobody wants to travel to talk to you.

Even within large organizations like government and Fortune 50 companies, consolidation drives centralization. Big places used to have regional administrative services (HR, Finance, etc). You could make a career working in some regional field office.

Now, centralized functions mean that you work at HQ, a regional center, or you're a task worker in the provinces.

Re: Rents in Megacities Can't Go Up Forever

#314

Post by clock_tower » Thu, Mar 23, 2017, 9:14 PM UTC

robterrin wrote: post #60

reverend_gonzo wrote: post #33

Earlier quoted context omitted.

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 Ch…

> What exactly is Chicago good at?

Geography.

Chicago's the primary water connection between the Great Lakes (which communicate with the Hudson and St. Lawrence Rivers) and the Mississippi River; that's the historic origin of its central role in commodities trading.

Re: Rents in Megacities Can't Go Up Forever

#315

Post by falsedan » Thu, Mar 23, 2017, 9:19 PM UTC

randomdata wrote: post #70

falsedan wrote: post #52

Earlier quoted context omitted.

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).

I'd say that capital flows freely and advice can be given anywhere. What's hard to cultivate and maintain at a distance is friendship.

I think that capital aggregates in trade centres, where materials can be exchanged and deals can be made extremely swiftly. People closer to the trade can get information more quickly, and quickly react to it too.

Individual capital is very liquid, but the herd is not. Consider San Francisco: it has capital because of tech, because of the need for electronics & power for running a port, because of the trade in the Bay, because of the gold miners in 1849. That capital hasn't moved significantly to (say) Bakersfield.

Re: Rents in Megacities Can't Go Up Forever

#316

Post by pascalxus » Thu, Mar 23, 2017, 9:25 PM UTC

I hope he's right.

But, here's how he might not be: If cities like SF continue to maintain excess building regulations and "affordability" requirements that actually make it less affordable for most people. Zoning and land use policies are causing huge problems. Anyways, a smaller and smaller percentage of people will continue to prop up these insane housing prices, while a few others either gets free housing from gov subsidies or price ceilings, locking out any new entrants.

Re: Rents in Megacities Can't Go Up Forever

#317

Post by conanbatt » Thu, Mar 23, 2017, 9:26 PM UTC

acchow wrote: post #302

conanbatt wrote: post #256

Earlier quoted context omitted.

Food is more everything than college and it didnt raise prices the same way. College tuition has specific market conditions to be the way it is.

Huh? Parents buy their kids crap fast food all the time. We have no cultural push to buy whatever food our kid has access to no matter how high the cost. Contrast this with college acceptances and tuition. As soon as they get accepted, the tuition can be however high it is it doesn't matter. You still pay it. This culture of spending all and everything on tuition has allowed tuition to rise to maximally extract from…

Maybe i can clarify: there are many things people would pay through their teeth to keep or get, but not all of those has raised prices like tuition. First of all, tuition around the world hasnt increased like in the us, and the same cultural effect has to be present in the west.

My explanation for it is the debt conditions: if students were able to default on their debts, colleges would not charge what they do for majors that dont provide the value to students: if a student spends 80k for poli-sci but his job cant pay for it, he would default, and the college would lose that money , and hence have an ineterest in pricing accordingly to the value it can provide to its students.

But since the debt is federal and permanent, the college's incentives is to increase the price as much as possible since it doesn't have a sustainability problem: the students and the government do.

Just make the loans defaultable, you would have a default crisis by next month, and prices would crash quickly.

Re: Rents in Megacities Can't Go Up Forever

#318

Post by Atheros » Thu, Mar 23, 2017, 9:26 PM UTC

ghaff wrote: post #257

conanbatt wrote: post #251

Earlier quoted context omitted.

Yes? And thats not really a problem at all.

Except it doesn't work that way. Instead 7-11 simply decides that it can't run a convenience store profitably in that location. For other types of service workers, wages/fees may well go up but it probably also just gets harder to find people.

Of course it works that way. If almost all the stores close then the remaining ones can raise prices. If All the stores close, the quality of life goes down and rents go down until it equalizes with a few stores open.

Re: Rents in Megacities Can't Go Up Forever

#319

Post by bante » Thu, Mar 23, 2017, 9:27 PM UTC

amyjess wrote: post #301

bante wrote: post #264

Earlier quoted context omitted.

"Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places." It's concentrated _because_ it doesn't have to be at certain places. Your post office that had to be close to you is now run by a couple of thousand people at Google. "Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines?" Again, without being to annoying, why does it ha…

> Again, without being to annoying, why does it have to be in Dallas? It doesn't, so it mostly isn't. Actually, the answer is that Dallas is already a tech hub. https://en.wikipedia.org/wiki/Silicon_Prairie https://en.wikipedia.org/wiki/Telecom_Corridor

As far as I know that only tells you why it might have had to be Dallas at some point when regional centers made sense. Which changed somewhere around Paypal if not earlier.

I'm not saying that Dallas (or any other city) can't have some, even quite successful, startups. Just that you can't really compete being say "the third to fifth best choice for startups". At that point you're competing with too(!) many different cities. You have to be the obvious choice in a few, preferably large, categories; capture a lot of local talent (which is harder in the US), and most likely both.

Re: Rents in Megacities Can't Go Up Forever

#320

Post by conanbatt » Thu, Mar 23, 2017, 9:27 PM UTC

ghaff wrote: post #257

conanbatt wrote: post #251

Earlier quoted context omitted.

Yes? And thats not really a problem at all.

Except it doesn't work that way. Instead 7-11 simply decides that it can't run a convenience store profitably in that location. For other types of service workers, wages/fees may well go up but it probably also just gets harder to find people.

Where do the rich people get their groceries then. Its clear that service jobs pay a lot more in SF that they do in other places, for the very reasons you mention before.