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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

#151

Post by sf_rob »

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.

Even a lot of bay area renters are anti-development. "They're just going to build luxury condos and destroy the neighborhood character" is the go-to phrase.

Re: Rents in Megacities Can't Go Up Forever

#152

Post by ceejayoz »

startupdiscuss wrote: post #46
supergeek133 wrote: post #21

> Rents in Megacities Can't Go Up Forever Yes it can, College Tuition is a great example. Instead of finding the cause and treating it, we just increase the amount of aid people have access to.

Thank goodness we are too smart to try that with Healthcare.

Compare the statements "not everyone needs to live in an expensive city" and "not everyone needs to go to a private out-of-state college" to "not everyone needs to be able to live" to see the silliness of that comparison.

Re: Rents in Megacities Can't Go Up Forever

#153

Post by halbritt »

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…

Not sure where to jump into this thread:

There are many good reasons the bay area is the hub of tech development. It all started with proximity to two very good computer science schools; Stanford and UC Berkeley. At this point, there are more tech-savvy investors here than anywhere else.

Ongoing development of technology is an iterative process and by necessity, must be a productive one to get to market more quickly. The VCs and the talent pool are here in the bay area. If a startup wants to get to market quickly, that startup will need money and talent, both of which are people issues.

Re: Rents in Megacities Can't Go Up Forever

#154

Post by pantalaimon »

jimlawruk wrote: post #55
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…

Exactly right. Young people today would rather be poor in a "trendy" city, than rich in a not so trendy one. It has almost become a badge of honor of how much you can rough it to stay afloat in X trendy city. I am guessing it was not like this for previous generations, and I think it leads to too much homogeneity of culture. I think we should start to encouraging people to go to a uncool city and help build it up and…

> I think we should start to encouraging people to go to a uncool city and help build it up and make it cool.

While this is a laudable project and it works in some places, many rural citys are very conservative and against anything new the youth might be interested in.

Re: Rents in Megacities Can't Go Up Forever

#155

Post by nosuchthing »

supergeek133 wrote: post #21

> Rents in Megacities Can't Go Up Forever Yes it can, College Tuition is a great example. Instead of finding the cause and treating it, we just increase the amount of aid people have access to.

The fallacy of rent control, which only treats the symptom and fails to address the root problem of inadequate supply and restrictions to adding additional supply to the market.

Re: Rents in Megacities Can't Go Up Forever

#156

Post by davidf18 »

frebord wrote: post #86
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…

I like how you managed to throw in a blow on Trump there, nice!

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".

Re: Rents in Megacities Can't Go Up Forever

#157

Post by logfromblammo »

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…

Chicago is the "second city" in a lot of things. These are the top public companies in the city:

  Aerospace/Defense: Boeing
  Agribusiness/Foodservice: ADM, Mondelez, McDonald's, US Foods, Ingredion
  Communications:  Anixter, Motorola, TDS
  Energy: Exelon
  Finance: Discover, JLL
  Healthcare: Walgreens, AbbVie, Abbott, Baxter, Baxalta
  Industrial/Manufacturing/B2B: ITW, CDW, Navistar, Grainger, Univar, Tenneco, LKQ, Dover, Packaging Corp., Essendant
  Insurance: State Farm, Allstate, Old Republic, AJG
  Publishing: RR Donnelley
  Retail: Sears
  Transport: United
Apparently, Chicago excels in insurance, food, and manufacturing support.

If you intend to create technology for supporting businesses in those sectors, having a Chicago office would not be a bad idea. SV unicorns tend not to even want to solve problems like how to more efficiently route a single gigantic monolithic I-beam from the foundry to a building site without destroying buildings, bridges, and roads along the way. It isn't sexy, and doesn't attract money or eager and idealistic employees.

Re: Rents in Megacities Can't Go Up Forever

#158

Post by pantalaimon »

coldpie wrote: post #29
xienze wrote: post #11

Earlier quoted context omitted.

> 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.

> and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable Motor vehicle accidents are the largest cause of death for people in the US under the age of 24 so it is, arguably, the worst thing imaginable ;) https://www.cdc.gov/injury/wisqars/leadingcauses.html

Also true for the environment, both ecologically and culturally.

Re: Rents in Megacities Can't Go Up Forever

#159

Post by 67726e »

ntdef wrote: post #85
acchow wrote: post #74

Earlier quoted context omitted.

Isn't Boeing in Washington? Also, not too many people aspire to be in insurance. I don't think you can put it on the same level as finance, arts, software, fashion, film, etc.

Boeing planes are assembled in Seattle; their HQ is in Chicago. Do people aspire to work in health, energy or finance, or even software aside from the money? If so, what difference does it make?

The 787 is assembled in (North) Charleston, SC.

Re: Rents in Megacities Can't Go Up Forever

#160

Post by humanrebar »

ctdonath wrote: post #144

Supply and demand. So long as people want a limited resource enough to pay $X+1 for it, prices will rise. There's a limit to the inherent value of living in a megacity (adjusting for floorspace, quality, etc), so once insufficient customers are found, prices will flatten or drop. Being able to work from anywhere, there's no reason for me to stay anywhere near a megacity (which I find expensive and distasteful). As em…

I agree. The only challenge for me is the lack of dining table economics on the part of employers outside of places like NYC and the Bay Area.

What I mean is that they almost exclusively look at local market prices for developers. They don't generally factor in what developers can make in the big cities. Now, some do, but generally they just apply the inverse of a cost-of-living multiplier and make that offer. That's problematic because then our savings rate, something that should be measured in absolute terms, is being reduced.

Anyway, point being, if I add up my benefits, savings rate, and cost-of-living adjusted expenses, I end up with a big number for most non-coastal-U.S. employers. I then have the risk of branding myself as an overpriced prima donna, especially if I'm seen as a cost center instead of as a strategic resource.

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