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> The problem is that, with AirBnB and sublets come ever increasing rent, eventually pricing huge numbers of people out, which drives down productivity and grow
by twblalock 10y ago
> The problem is that, with AirBnB and sublets come ever increasing rent, eventually pricing huge numbers of people out, which drives down productivity and growth.
AirBnB aside, the cities with the highest housing prices, and the highest recent increases in housing prices, also have the highest economic growth by far.
In theory, people like service workers will be driven out, the local economy will suffer, yadda yadda yadda. In practice, that has never happened. In San Francisco area, for example, rents have more than doubled in the past five years, the economy has boomed, thousands of new jobs were created, and there are still enough service workers, restaurant workers, municipal employees, etc. to do the jobs that need to be done. If you look at the most expensive cities worldwide, e.g. London, Paris, Moscow, Tokyo, etc., you will find similar situations.
If you want to argue for affordable housing on the basis that it is a social good, that's fine. But there is no evidence that high housing prices have driven down productivity and growth.
- steveax 10y agoExcept those service workers probably now have significantly longer commutes. Their quality of life suffers. I don't know how broadly your definition of service workers goes, but this affects teachers, police officers, firefighters, etc.
- twblalock 10y agoThat's not relevant to the arguments about economic growth, because clearly the places this happens are growing very fast in spite of this. This is one of the "affordable housing is a social good" arguments. That's fine, but it's not the kind of argument I was responding to.
- ahoy 10y agoI don't think the parent poster would disagree with you. What they're saying is that the decreased quality of life for service industry workers hasn't lead to a negative effect on the economy. I'm with you that it's a bad thing.
- davidw 10y agoGrowing at 10% instead of 20% is still "a negative effect". "That which is not seen" and all that...
- twblalock 10y agoWhat evidence is there that growth would increase in the areas with high housing prices if the housing prices were lower?
- davidw 10y agoLess deadweight loss in the form of rent, and more towards people doing productive things is one completely obvious one.
- twblalock 10y agoI asked for evidence, not what seems obvious. I already addressed this in my original post. It seems obvious that the displacement of workers would hurt the economy. However, it does not seem to actually happen -- the cities with the highest housing prices have the highest growth of any cities in the world.
- twblalock 10y ago> What they're saying is that the decreased quality of life for service industry workers hasn't lead to a negative effect on the economy. Yes, that is exactly what I am saying. High housing prices don't seem to hurt the economy. Quality of life arguments, whether they are right or wrong, are totally unrelated to that proposition.
- komali2 10y agoThe unfortunate thing is that common sense dictates that productivity should be going down with quality of life, but apparently, it isn't. Or at least, nobody has been able to demonstrate a correlation yet.
- odbol_ 10y agoYou're abusing the law of averages though. Yes, productivity might be fine for the most "economically productive" members of society (e.g. programmers, middle managers, aka the privileged.) For everyone else, aka the people on minimum wage, their productivity and quality of life is severely hampered. But since if one janitor is forced to quit their job because the 3-hour commute is no longer worth minimum wage, they can just go find another person desperate enough to work for minimum wage. These people are often ignored and have no real public voice/outlet to let their plights be known. But of course, plenty of rich programmers on a Hacker forum don't think anything's wrong, because nothing's wrong _for them_.
- toomuchtodo 10y agoQuality of life can go down while excess productivity has been captured by corporations and distributed to shareholders. As productivity went up over the last 40 years, we should've reduced the work week. [1] We didn't. And now we have corporations with trillions of dollars of cash they can't or won't invest [2], and tens of millions of workers who continue to slave away 40 hours a week. As odbol_'s sibling comment states, most of HN's demographic doesn't see this despair or care. [1] https://thecurrentmoment.files.wordpress.com/2011/08/productivity-and-real-wages.jpg https://thecurrentmoment.files.wordpress.com/2011/08/product... [2] http://www.nytimes.com/2016/01/24/magazine/why-are-corporations-hoarding-trillions.html http://www.nytimes.com/2016/01/24/magazine/why-are-corporati... And the disappearing middle class: http://www.npr.org/2016/07/07/484941939/a-portrait-of-americas-middle-class-by-the-numbers http://www.npr.org/2016/07/07/484941939/a-portrait-of-americ...
- davidw 10y ago> But there is no evidence that high housing prices have driven down productivity and growth. Well, only if you don't look at, say, the field of economics: http://www.citylab.com/housing/2015/06/nimbyism-is-a-huge-drag-on-americas-economic-growth/394925/ http://www.citylab.com/housing/2015/06/nimbyism-is-a-huge-dr... The loss is not to the area. It's to the people who could have gone there, but can't due to housing prices.
- twblalock 10y ago> The loss is not to the area. It's to the people who could have gone there, but can't due to housing prices. Since we are talking about the productivity and economic growth of the area, rather than the salaries and quality of life of people who aren't in the area, how is this relevant?
- davidw 10y agoThose people would be in the area.
- cbhl 10y ago> In San Francisco area, for example, rents have more than doubled in the past five years, [...] and there are still enough service workers, restaurant workers, municipal employees, etc. No, no there are not. School districts in SF and Oakland are short dozens of teachers -- imagine having sixty classrooms on the first day of school where there is no teacher. (e.g. http://www.sfgate.com/education/article/Bay-Area-school-districts-scramble-amid-teacher-6446569.php http://www.sfgate.com/education/article/Bay-Area-school-dist... from last year)
- omegaworks 10y agoIt's funny I hear people complain why we have a dwindling number of 24-hour restaurants. The BART closes at midnight. :)
- notyourwork 10y agoI see your point but I don't think we have enough data to conclude. SF rents have drastically changed in the last handful of years. Service workers still show up but by forcing them to either pay more for rent in city or forcing them out of the city to cheaper residence their quality of life decreases. Less time with family or less money for family, pick your poison. This is the problem with those service workers in this context. Someone will always fill the gap though so I suppose my argument doesn't hold much either. If enough service workers leave big cities for cheaper living and shorter commutes these heavily populated areas will have to start paying more to incentivize people to work in downtown areas. So essentially its a supply and demand problem like any other. Perhaps there is no argument here at all and it just sucks for some people who are less financially well off.