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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

#121

Post by scurvy »

zimzam wrote: post #25
bpicolo wrote: post #8

Earlier quoted context omitted.

There are certainly a lot of factors. 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 (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a comp…

See, here's the thing about coastal types: they are obsessed with getting the "top" talent, as if every project or startup requires it. What if most startups only need "good" developers to develop their mostly CRUD apps and don't need "the best" developers?

Top talent includes good, too. Leaving only mediocre to bad for everyone else.

We're on the smaller side in SF, and I'm having a terrible time finding good ops people.

Re: Rents in Megacities Can't Go Up Forever

#122

Post by amyjess »

startupdiscuss wrote: post #42
amyjess wrote: post #19

Earlier quoted context omitted.

You could always do what the founders of TI did: start your own university and grow your own talent. The University of Texas at Dallas, established explicitly for this reason, is probably the reason why Dallas is a tech hub.

Every large city has some schools. Why is it that Austin is a tech hub (UT) but Houston is not (U of H, Rice)? One theory: it is not the school, but the kinds of jobs people get after. Austinites went to work for Dell, and Houstonians went to work for Exxon.

The Dallas area had several universities before UTD was founded: the University of North Texas, Southern Methodist University, and the University of Texas at Arlington (though UNT had a different name at that time). These existing universities were not STEM schools.

What made UTD different was that it was founded by the same people who founded the largest technology company in the area, and they specifically founded it in order to do something about the low number of STEM graduates in the Dallas area. The TI founders went out of their way to engineer a STEM culture in a city that didn't have one just to grow some more talent for their company.

From Wikipedia [0]:

> Qualified personnel required by TI were not readily available in the Dallas-Fort Worth area because the region's universities did not provide enough graduates with advanced training in engineering and physical sciences. TI was forced to recruit talent from other states during its expansion and the founders observed in 1959 that "To grow industrially, the region must grow academically; it must provide the intellectual atmosphere, which will allow it to compete in the new industries dependent on highly trained and creative minds".[12] To compensate for this shortage they established the Graduate Research Center of the Southwest in 1961. The institute initially was housed in the Fondren Science Library at Southern Methodist University. Land for the center was acquired by Jonsson, McDermott, and Green in Richardson in 1962 and the first facility, the Laboratory of Earth and Planetary Science (later named the Founders Building), opened on the grounds of the present-day UTD campus in 1964. The Graduate Research Center of the Southwest was renamed the Southwest Center for Advanced Studies (SCAS) in 1967 and in 1969 the founders transferred the land and assets of SCAS to the State of Texas. On June 13, 1969 Governor Preston Smith signed the bill adding the institution to the University of Texas System and creating the University of Texas at Dallas.

[0] https://en.wikipedia.org/wiki/University_of_Texas_at_Dallas

Re: Rents in Megacities Can't Go Up Forever

#123

Post by humanrebar »

lordCarbonFiber wrote: post #83
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…

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 that's not the case any longer. I just googled and apparently there are Cambodian restaurants in Des Moines, Iowa. The internet can get you all the ingredients, music, and books you'll want.

Honestly, I think the coastal cities just have better marketing and more hipster appeal.

Re: Rents in Megacities Can't Go Up Forever

#124

Post by dpark »

ryandrake wrote: post #110
bpicolo wrote: post #8

Earlier quoted context omitted.

There are certainly a lot of factors. 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 (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a comp…

> 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…

You should get a better job if you spend all your waking hours working. "Better than 16 hours a day" isn't a high bar.

Re: Rents in Megacities Can't Go Up Forever

#125

Post by ntdef »

Declanomous wrote: post #113
robterrin wrote: post #60

Earlier quoted context omitted.

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…

Chicago has finance, it just doesn't have Wall Street. If you want to trade options or commodities Chicago is arguably a better place to be. New York is undoubtedly the better place to be for stock trading. As far as entertainment goes, it's no accident that a huge number of comedians get their start in Chicago. Chicago has tons of anchor industries, the real problem is that they don't translate well to the unicorn s…

To your point, pretty much everyone who's ever been on SNL made their way there through The Second City.

Re: Rents in Megacities Can't Go Up Forever

#126

Post by ikeyany »

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?

Are you serious? That's Students choose to attend "good schools" because of the networks and resources. Immigrants flock to the US because of our resources. Increasing your chances of prosperity is the reason why anyone moves anywhere (unless a family member is in need).

Re: Rents in Megacities Can't Go Up Forever

#127

Post by CPLX »

startupdiscuss wrote: post #119
glibgil wrote: post #94

Earlier quoted context omitted.

> bars and restaurants, museums and the opera, high-paying jobs And these would actually be rent seeking activities? Is that the idea?

That wasn't what I was thinking of. I was just contrasting two different types of reasons for why people cluster in those cities. Type I, the optimistic theory Information is more efficient and trust is better when people meet in person. Industries need to co-ordinate trust and information flow through lots of people, so they have to be in the same place. They produce a lot of value, which produces wealth and increas…

It's not all that complicated. People go to where resources are.

Sometimes resources are grasslands with plentiful wild animals that you can spear and eat. Sometimes it's gems or petroleum buried underneath the rocks. And yes, resources are things like museums or pretty views or available five star restaurant meals. But the dynamic throughout human history is reasonably understandable, you can observe the same basic concept in a Petri dish.

The biggest resource of all in modern society is financial wealth. So people go to places that have it. Unlike the grassland, where new arrivals quickly deplete the available resource, in this modern scenario the result tends to be the creation of more wealth, and the cycle reinforces itself.

Re: Rents in Megacities Can't Go Up Forever

#128

Post by sgron »

Sure they can. That there is a natural bound relative to other fundamentals in no way means that the absolute price cannot unboundedly increase. Any in any case, the most thorough spatial equilibrium analysis suggests that there is natural agglomeration of high skill/wage (locally positive feedback). The reference is Diamond (AER 2016), but the working version of her job market paper is a bit more complete: http://web.stanford.edu/~diamondr/jmp_final_all_files.pdf

Re: Rents in Megacities Can't Go Up Forever

#129

Post by sgron »

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?

The reference that I posted elsewhere in this thread is pretty thorough: http://web.stanford.edu/~diamondr/jmp_final_all_files.pdf

Re: Rents in Megacities Can't Go Up Forever

#130

Post by and0 »

anubisresources wrote: post #79
ntdef wrote: post #71

Earlier quoted context omitted.

I think you're a bit misinformed. Chicago has two large keystone industries that serve the global economy: (1) Industrial large scale manufacturing (Boeing, John Deere, Caterpillar), (2) Insurance (all of them); not to mention a ton of Food and Agriculture HQs are based there as well.

Insurance is Hartford, CT. Food and ag I can see though

Slightly less so nowadays. I left that area and moved to a megacity so I could get into software dev without having to work at an insurance company (or ESPN). But there's a little bit more going on with CT nowadays, and I think the insurance companies are starting to spread out. They had a ton of leverage in the area and got away with a lot (not paying taxes, etc) but the well started to run dry and people started to push back. Before I left, the mere suggestion that we demand more from these huge companies always turned into highly publicized threats to take XX,000 jobs elsewhere.

The whole situation is dumb, overall I'd avoid living in CT for a ton of reasons. CT had a lot of industry going for it (Stanley Tools in New Britain, for example, and Hartford was the center of the gun industry 100 years ago) but those of course moved overseas. The insurance industry provided a safety net so it didn't go the way of the rust belt but, late capitalism y'know, so that was just a band-aid that's being slowly ripped off. This is happening everywhere but the systematic denial isn't as ingrained as in CT, it's weird.

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