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Change my mind: Density increases local but decreases global prices

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Re: Change my mind: Density increases local but decreases global prices

#121
post #78

I feel like this (along with many discussions about urban housing) slightly misses the real issue. A lot of these discussions center around how to make housing affordable in cities and whether denser construction leads to lower housing costs or higher housing costs. But cities don't exist to minimize housing costs. They exist to maximize opportunities: job opportunities, dating opportunities, friendship opportunities…

I think you got it the wrong way around - cities _form_ around opportunities, rather than produce them. Initially, geographic advantage (such as being near harbour, river, or some other geographic feature) gives a settlement that's not yet a city a big advantage in attracting more people there. This in turn, forces the city to grow as more people cram in. To artificially build denser by policy doesn't produce opportu…

it really depends on the kind of opportunities you are looking for. if i want to form a band or play in a music session then i need to find other players. a larger city is more likely to have players, so the opportunity does not exist until the people are there. same goes for creating a hackerspace or any other group around a topic that is only of interest to a small part of the population.

also networking. there are no opportunities to meet people unless a city is large enough to have events.

movies or theaters, museums, specialty shopping (like a comic book store). anything like that is only sustainable with a large enough local population.

Re: Change my mind: Density increases local but decreases global prices

#122

Earlier quoted context omitted.

Really? I’ve lived in the Bay Area and Tokyo. Right now I can find a 535 sq ft bedroom in Tokyo for $1170 ( https://realestate.co.jp/en/rent/view/929199 ). There are plenty of units like this - and even more (slightly bigger, nicer amenities, etc) to three times more. And this isn’t even a “cheap” part of the city. Even at that higher end of the Tokyo price range, there’s nothing like that for solo renters in SF or O…

Transport is key - it dramatically increases the amount of land available to build on within commute distance. People like to think NYC has a good amount of transit, but when you realize the Tokyo area has 120+ rail lines, most of which have a higher degree of service than even the most central ones in Manhattan, you realize that the USA can be doing so much more.

Bingo

Re: Change my mind: Density increases local but decreases global prices

#123

I feel like this (along with many discussions about urban housing) slightly misses the real issue. A lot of these discussions center around how to make housing affordable in cities and whether denser construction leads to lower housing costs or higher housing costs. But cities don't exist to minimize housing costs. They exist to maximize opportunities: job opportunities, dating opportunities, friendship opportunities…

I feel your discussion uses the wrong metric. The appropriate level for measuring wellbeing is national*. If making a comparatively small number of long-term city residents in a little worse off improves the lives of many citizens of the nation it should be clearly worthwhile.

Many cities have obvious low-hanging fruit. SF is full of 1-3 story housing that could easily be made much denser.

Instead we've created a system where the lucky few whose parents bought housing years ago in desirable areas inherit a ticket to opportunity in a city. That's fundamentally contrary to the ideals of the American Dream.

*Well I actually think this should be global, so I support open borders. But that's a tangent here.

Re: Change my mind: Density increases local but decreases global prices

#124
Comparing New York city, Tokyo, Dubai and Bay area is comparing outliers. I don't think there is useful science comparing planetary business hub or the the wealthiest place on earth to some wilderness. You can't create great wealth, prosperity and capital at will, at least not New York city level, they are created due to external circumstances.

Those circumstances drive: prices, density, opportunities of which people speak in sibling comments.

There could be some forced or artificial dynamic, but these examples are plain bad. Chinese megacities are much better ones, particularly planned, not organic cities

Re: Change my mind: Density increases local but decreases global prices

#125

I feel like this (along with many discussions about urban housing) slightly misses the real issue. A lot of these discussions center around how to make housing affordable in cities and whether denser construction leads to lower housing costs or higher housing costs. But cities don't exist to minimize housing costs. They exist to maximize opportunities: job opportunities, dating opportunities, friendship opportunities…

I am glad that this is the top comment. Imagine you build housing such that 5 Million more people can move to Boston. Imagine that housing prices do not go down, and do not go down in other cities either. That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston. These 5 million people are on average doing highe…

Call me stupid (I am not an economist) but I can't see how your conclusions follow from one another.

> That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston.

...How did those 5 million better-paid jobs got created? How did the 5 million people connect with them? Not everyone is 18-25 y/o you know, a lot of people know one profession and don't want to ever learn another (assuming the jobs pertain to a different profession, but I'd say that's a safe bet that not all of them will cover the professions of these 5 million people).

> These 5 million people are on average doing higher-productivity jobs than before, which means economic growth.

Better salary rarely correlates with better productivity in my experience and observations. People love their titles and prestige and are chasing after them just for the extra salaries they bring. And even if we ignore that, a lot of companies pad budgets for well-known reasons: if you don't spend your entire department's budget then it will be reduced in the next quarter or fiscal year, and you as a manager are very likely to get skipped when handing out bonuses. This has often led to managers hiring expensive consultants that barely do anything. These people are laughing their way to the bank and the economy gains nothing from it (those consultants will not reinvest 100% of the money in the local economy; I'd count it as a huge win if they reinvest even 20% but I have no data proving that they do or that they don't).

So yes, while the new 5 million people could have better salaries, that says almost nothing about productivity or helping the economy at large with this theorized increased productivity.

> Yet at the same time, these 5 million people now have a lower ecological footprint than they would have had if they stayed where they lived before.

I am most of all challenging this one. I've known a lot of people in rural areas years ago, some of them pile wood and small amounts of coal for 3-5 years ahead for prices I'd find laughable and a rounding error in my 3-month expense budget -- and before we talk about ecological impact or CO2 footprint, most of this wood was cut 5 years ago, it's not removing new forests. They manage their heating extremely efficiently. It really opened my eyes how much us the city people look down on others in terms of ecology when in fact we know next to nothing about how is our local electricity procured, how much CO2 it releases in the atmosphere, and how is it even subsidized (a huge topic for another thread / time).

So obviously this is down to context (and I have no idea where does Boston get its electricity, or any such city that your idea might pertain to) but to me this is not as clear and cut as you make it sound.

...And that's not even mentioning rural people getting solar panels and literally having 5-10% of their winter power bill during the summer.

......And it's also not mentioning that some of them did a combination of a family picnic + were gathering dead wood / twigs / dry leaves sometimes and these easily accounted for no less than 5% of all their heating in the cold months. This is not destroying the ecological system, it's merely being super efficient by removing mostly useless bio matter (and very far from such a huge scale that it will hamper enriching the soil, before you say it!).

> These 5 million people are arguably better off, and the rest of society is also better off.

As you yourself alluded to, that's not a given, like at all. 5 million people moving away from rural areas could arguably leave 10+ million elderly people without care or even ability to have their kids arrive to their location quickly if they have a medical emergency.

Which part of "society" is better off? City real estate renters for sure. Who else?

Local sandwich shops, laundromats, coffee joints, ice-cream truck? I'll give you all of those and I like how city people inter-mingle both in terms of physical presence and capital. But I remain skeptical that society as a huge entity is actually better off.

---

IMO your take is a very idealistic one. Still, I do my best not to sound like I am attacking you, I am kind of confused that I can't see a single correlation in your string of assertions and I am curious if you can back them up with something more than aggregated (and very diluted) historical statistics.

Re: Change my mind: Density increases local but decreases global prices

#126

I feel like this (along with many discussions about urban housing) slightly misses the real issue. A lot of these discussions center around how to make housing affordable in cities and whether denser construction leads to lower housing costs or higher housing costs. But cities don't exist to minimize housing costs. They exist to maximize opportunities: job opportunities, dating opportunities, friendship opportunities…

I think you are missing the point. The question of house pricing comes mainly from too many people not able to afford proper living condition, despite the better opportunities.

Of course will a house in the middle of nowhere cheaper than those in better environments. But what worth has the better environment, when most people can't utilize it? At the end, this situation will lead to multiple other problems, like people avoiding overpriced areas, and instead travelling long distances to their workplace in those overpriced areas, which means they waste energy and pollute the environment, have less time for their family & socializing, and so on...

So it doesn't matter for what reason a city might exists or not. The question is which burden it puts on society and to which future it leads.

Re: Change my mind: Density increases local but decreases global prices

#127

Earlier quoted context omitted.

I am glad that this is the top comment. Imagine you build housing such that 5 Million more people can move to Boston. Imagine that housing prices do not go down, and do not go down in other cities either. That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston. These 5 million people are on average doing highe…

Call me stupid (I am not an economist) but I can't see how your conclusions follow from one another. > That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston. ...How did those 5 million better-paid jobs got created? How did the 5 million people connect with them? Not everyone is 18-25 y/o you know, a lot of p…

I - genuinely - don’t have time to write a full response right now.

So I will just pick your first question as an example:

> How did those 5 million better-paid jobs got created? How did the 5 million people connect with them? Not everyone is 18-25 y/o you know,

These jobs got created because companies were able to hire employees into roles that they would otherwise not have been able to fill. and yes, not everybody is 25, but a whole lot of people are…

Re: Change my mind: Density increases local but decreases global prices

#128

Earlier quoted context omitted.

I am glad that this is the top comment. Imagine you build housing such that 5 Million more people can move to Boston. Imagine that housing prices do not go down, and do not go down in other cities either. That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston. These 5 million people are on average doing highe…

Call me stupid (I am not an economist) but I can't see how your conclusions follow from one another. > That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston. ...How did those 5 million better-paid jobs got created? How did the 5 million people connect with them? Not everyone is 18-25 y/o you know, a lot of p…

>How did those 5 million better-paid jobs got created?

I don't think that matters in this argument because the author assumes that housing prices will rise, which would only be possible if there is growth in desirable jobs. If 5 million high paying jobs don't get created, you don't have to worry about rising home prices because very few people would want to live in a place more expensive place on the same income. Instead you'd have a situation like Tokyo where housing prices don't rise.

>I've known a lot of people in rural areas years ago

They are alluding to suburban rather than rural migration. Your average country folk isn't going to suddenly decide to move to NYC. You need about 30 acres for an indefinite supply of firewood. You're probably not going to able to aquire that much land within a reasonable distance of an office, and if you can, you'd be wasting a lot of energy with commuting.

Re: Change my mind: Density increases local but decreases global prices

#129
post #128

Earlier quoted context omitted.

Call me stupid (I am not an economist) but I can't see how your conclusions follow from one another. > That implies that that 5 million more people are now earning Boston-level salaries and 5 million more people were able to make the personal choice to move to Boston. ...How did those 5 million better-paid jobs got created? How did the 5 million people connect with them? Not everyone is 18-25 y/o you know, a lot of p…

>How did those 5 million better-paid jobs got created? I don't think that matters in this argument because the author assumes that housing prices will rise, which would only be possible if there is growth in desirable jobs. If 5 million high paying jobs don't get created, you don't have to worry about rising home prices because very few people would want to live in a place more expensive place on the same income. Ins…

> Instead you'd have a situation like Tokyo where housing prices don't rise.

Agreed, that's what I am arguing for in fact. Prices either rise or stagnate, but for them to actually drop... it takes a while until the people who are very invested in the constant growth of the market to realize things don't always work that way, and correct their prices more in tune with reality.

Again though, it takes a long time.

> They are alluding to suburban rather than rural migration.

Ah, fair. Suburban living was economically viable for one brief dreamy moment in time but I am afraid it has not been that for a few decades now.

Re: Change my mind: Density increases local but decreases global prices

#130

I feel like this (along with many discussions about urban housing) slightly misses the real issue. A lot of these discussions center around how to make housing affordable in cities and whether denser construction leads to lower housing costs or higher housing costs. But cities don't exist to minimize housing costs. They exist to maximize opportunities: job opportunities, dating opportunities, friendship opportunities…

Housing is expensive in rural north Dakota as well. Land is cheap which makes things cheaper. However your choice is older houses that are worn out, or spending more than the house is worth to build a new one.
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