But who will build the roads?
A Startup That Wants to Build Cities
61–70 of 84 posts
Re: A Startup That Wants to Build Cities
#62Am I missing something? This company is a Real Estate Agent masquerading as a "startup"
Re: A Startup That Wants to Build Cities
#63Earlier quoted context omitted.
Well, perhaps. But it's probably pretty hard to make a lot of money as a landlord in Berlin if that is the case. Which is ultimately what this company would need to do to be successful.
Quite the contrary, due to the high demand, rents are on a steady rise. [1] The government is issuing caps now on how much higher the rent can be with new contracts (there are already caps for how much rent can be increased with an existing contract, but when old tenants move out, they could ask for any price on the new contract, especially when renovating the place - which led to shady methods to get long-term tenan…
Look, you can't have both an overabundance of housing supply and an overabundance of housing demand. I don't really know or care which is really the case in Berlin, and of course demand could be low but rising, but if housing is oversupplied, then landlords won't make much money. If housing is undersupplied, then Berlin wasn't a good example of what you thought it was.
Re: A Startup That Wants to Build Cities
#64Earlier quoted context omitted.
Quite the contrary, due to the high demand, rents are on a steady rise. [1] The government is issuing caps now on how much higher the rent can be with new contracts (there are already caps for how much rent can be increased with an existing contract, but when old tenants move out, they could ask for any price on the new contract, especially when renovating the place - which led to shady methods to get long-term tenan…
Look, you can't have both an overabundance of housing supply and an overabundance of housing demand. I don't really know or care which is really the case in Berlin, and of course demand could be low but rising, but if housing is oversupplied, then landlords won't make much money. If housing is undersupplied, then Berlin wasn't a good example of what you thought it was.
There is no oversupply of housing, there are just not so many jobs.
Re: A Startup That Wants to Build Cities
#65Earlier quoted context omitted.
Look, you can't have both an overabundance of housing supply and an overabundance of housing demand. I don't really know or care which is really the case in Berlin, and of course demand could be low but rising, but if housing is oversupplied, then landlords won't make much money. If housing is undersupplied, then Berlin wasn't a good example of what you thought it was.
There is no oversupply of housing, there are just not so many jobs.
So your claim here is that there is enough demand for housing in Berlin to produce tidy profits for landlords and a steady influx of new people for whom there are not enough jobs and so those people are unemployed?
That is:
1. Obviously not true. 2. Obviously not a good or sustainable thing if true.
Re: A Startup That Wants to Build Cities
#66Is this "not invented here" syndrome again?
There are plenty of little towns and cities out there already. They were all programmed in non-portable assembly for obscure processors. Some even have a rudimentary OS written in C. And the startup in the article wants to scrap the entire code base, and rewrite the whole thing from scratch in Python, or Scala, or Clojure, or Brainfuck, or whatever closes the first round of funding this year.
Never mind that this has been done before, countless times. They're called "company towns". If the company did it well, they diversified their economies and still exist. If not, they failed, and were absorbed by natural communities.
http://en.wikipedia.org/wiki/Company_town
-or in the extreme case-
http://en.wikipedia.org/wiki/Corporate_republic
I can't quite tell if Silicon Valley has already jumped the shark, or if they are still seeking funding to build the ramp.
Re: A Startup That Wants to Build Cities
#67Earlier quoted context omitted.
There is no oversupply of housing, there are just not so many jobs.
So your claim here is that there is enough demand for housing in Berlin to produce tidy profits for landlords and a steady influx of new people for whom there are not enough jobs and so those people are unemployed? That is: 1. Obviously not true. 2. Obviously not a good or sustainable thing if true.
Or 3. Your argument is wrong because markets aren't efficient and jobs + housing aren't as tightly linked as you'd have us believe?
Re: A Startup That Wants to Build Cities
#68This looks very cool, kudos to you guys
Re: A Startup That Wants to Build Cities
#69Earlier quoted context omitted.
There is no oversupply of housing, there are just not so many jobs.
So your claim here is that there is enough demand for housing in Berlin to produce tidy profits for landlords and a steady influx of new people for whom there are not enough jobs and so those people are unemployed? That is: 1. Obviously not true. 2. Obviously not a good or sustainable thing if true.
Berlin is still perceived to be desirable enough and affordable enough that young people move there without a job, often from another country. (Both of those assumptions are often made based on a magazine article or blog post, btw.)
This definitely warps the jobs-to-housing relationship, and is hard to account for in any predictions because it's not strictly logical.
Re: A Startup That Wants to Build Cities
#70Earlier quoted context omitted.
So your claim here is that there is enough demand for housing in Berlin to produce tidy profits for landlords and a steady influx of new people for whom there are not enough jobs and so those people are unemployed? That is: 1. Obviously not true. 2. Obviously not a good or sustainable thing if true.
Or 3. Your argument is wrong because markets aren't efficient and jobs + housing aren't as tightly linked as you'd have us believe?
This has nothing to do with any strong form of the efficient markets hypothesis.
If there aren't jobs for the people in Berlin, then obviously they can't pay these great housing prices that the OP claims they can. I guess barring a case where Berlin is a vacation spot for the idle rich, but I don't think that anyone is arguing that.
If there are plenty of jobs, but housing is super-abundant, then I suppose you could make some weird case for there being a non-efficient market that's propping up housing prices despite there being no reason for that. And then landlords are, heh, making a rent, not the normal one but the economic concept, and sure, Berlin is super-overpriced for what it should be. But that's obviously nonsense too, everyone knows that Berlin is affordable.
I don't care if markets are for some reason inefficient the other direction and landlords are making less than what they ought to be -- the entire point of this ridiculous digression was the OP's claim that Campus could design an attractive model city which people would flock to despite there not being any jobs, and the point is that Campus is a landlord. They will not grow and become a giant disruptive force in the world if they are not making lots of money. If they build cities in which landlords for whatever reason make less money than they "ought to," then they will not grow and will not make many cities.
EDIT: I think this was all lost in the weeds, so let me play out the whole thing. I am not denying that Berlin is a vibrant, great, wonderful city that is also affordable and is attracting people for any reason you care to name. All I'm saying is that there are two possibilities:
1. Jobs are scarce in Berlin -> people do not have a lot of money in Berlin -> landlords do not make a lot of money in Berlin -> Campus could not make a neo-Berlin and then roll the incredible profits into making neo-neo-Berlin, because Campus is a landlord.
2. Jobs are not scarce in Berlin -> Berlin is not the counter-example that the OP thought it was.
For whatever it's worth, I think that the actual situation with Berlin is that it's still affordable but getting less so, and the OP confused the graph with the graph of the first differential.
EDIT2: In the case of Berlin, you could I suppose make the case that landlords are renting properties for low absolute rents but high profit margins, and that thus a sufficiently large landlord could use high volume to produce large absolute profits. But I don't think that could be the case for a new city. Building a city is a capital-intensive process -- even if the land is inherently cheap, building the structures and the infrastructure is just expensive, full stop.
What (may have) happened in Berlin is that somebody did the expensive city-building and then took a bath on it. Present landlords who are (hypothetically) making a good profit bought the distressed assets cheaply and now are making that profit off low absolute rents because essentially they've profited from the previous landlord's failure. Again, this is not a potential route to high absolute profits for Campus' potential future cities, as Campus will be the first landlord. They will need relatively high absolute rents in order to have substantially high absolute profits.