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Yet if you sum the value of property its very unusual for the net worth of a city to exceed the net worth of its metro area suburbs. Lets explore the concept i
by VLM 10y ago
Yet if you sum the value of property its very unusual for the net worth of a city to exceed the net worth of its metro area suburbs. Lets explore the concept in detail with automobiles.
Most people buy compact commuter cars, lets say. It really doesn't matter what kind of car is the most expensive car, that probably being sports cars. The price of a Ferrari being a large multiple of the price of a Honda Civic means surprisingly very little, or at least it should...
In 2015 about 300K honda civics were sold for lets say $19K each vs 7664 Ferrari sales for $400K each in the USA.
Yes I understand perfectly that the typical Ferrari sells for $400K and a Civic sells for $19K so apparently market clearing prices for Ferrari's dwarfs prices for Civics by a factor of almost exactly 21. Clearly we should socially engineer all our car laws to greatly encourage Ferrari ownership and all our social signalling memes should revolve around the superiority of Ferrari ownership.
However... 300K Honda Civics at 19K is roughly $5.7B in sales. And Ferrari sales of 7664 cars at $400K is almost exactly $3B. Clearly the marketplace has spoken and Ferraris and Civics are roughly equal in the marketplace and should be equal in the world of memes and social signalling.
But wait, there's 300K civic owners and 7664 ferrari owners. Clearly the socially engineered car laws should favor civics, not ferraris.
The world of property is somewhere between the 2nd and 3rd examples. The first example is simply irrelevant.
Cities have some expensive properties and proportionately no one lives there. I'm well aware that culturally its a huge social mistake to pretend anything or anyone matters other than the big cities, regardless how few live there. Most people want the suburb life that we must be convinced to socially engineer laws to destroy.
- Symbiote 10y agoI don't see how the analogy fits. Are people being forced to buy Ferraris? Most people would want the Ferrari, or a similarly expensive car in a different style (Rolls Royce, Tesla, whatever). In fact, both. But they can afford neither. Most people would also like a home in the city centre, or one in a village in the countryside, mountains or on the coast. Or both. Who would choose suburbia? It's a compromise, and in every respect the city centre or the village is better.
- VLM 10y agoYes I know that last line is the only socially acceptable thing to say. But when the money meets the real estate contract, most people won't live that way unless laws are passed to force them to live that way, to prevent suburbia, to destroy existing suburban areas. We both agree there is only one politically correct opinion for the only "correct" lifestyle. Pointing out that most people don't like it, don't live it, and will not tolerate laws to annihilate their current lifestyle, is useful in that there's no real point in talking about legally working to destroy the suburbs when so many people like it there as opposed to the very small number in the city. No matter how many people post on HN about how they love the city and the burbs must be destroyed by any means necessary legal or otherwise, meanwhile ten real estate contracts were signed by people upgrading to the burbs. Obviously whatever strategy is being used for urban boosterism is socially popular yet in a practical business sense is a complete economic failure.
- yarrel 10y agoYou are confusing being unable to pay with desire. They are very different things.
- JumpCrisscross 10y ago> most people don't like it, don't live it, and will not tolerate [urban density] Some don't and won't. But others do. I live in a small apartment in the centre of Manhattan. I measure my commute in minutes, and that only because I choose to detour to the many coffee, tea, bagel, juice and breakfast-ramen-in-a-cup shops nearby. My laundry gets picked and dropped off for free, maintenance is someone else's worry and I have an abundance of city services available to me (for which I pay out the nose for through taxes). Going home to my parents' suburbia is relaxing but not how I'd like to live. These perks I enjoy--diverse people, foods and cultural experiences nearby--are a function of density. Give us city folk more space and you reduce the number of customers within walking distance of each store, reducing their carrying capacities, thereby changing the fundamental dynamic that gives cosmopolitan life its colour. This isn't for everyone. But lots of people willingly--aspirationally, even--move to cities. Note that chateau life is costly--many Americans don't see why their taxes should subsidise it. (Particularly when it appears to be low-income Americans paying for richer Americans' suburbs [1].) Democratic debate is how we'll find a balance. [1] https://www.strongtowns.org/journal/2017/1/9/the-real-reason-your-city-has-no-money https://www.strongtowns.org/journal/2017/1/9/the-real-reason...