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The economic need will, of course, compensate for higher housing costs by providing higher compensation, which ultimately makes housing costs a moot issue for a

The economic need will, of course, compensate for higher housing costs by providing higher compensation, which ultimately makes housing costs a moot issue for anyone providing value to the local economy. As someone from outside of the region, what reasons necessitate that a lot of people be in the Bay Area that is beyond the economic need?

RobertoG 9y ago
maybe they were born there and their family, community and network is there? or is that a nonsense thing to say in the States? In some places of Europe that would be a pretty normal feeling.
- potatolicious 9y ago
  > "or is that a nonsense thing to say in the States?" It's a nonsense thing to say in front of the educated American elite. Most of America agrees with you, but as we've seen, there is a disturbing trend amongst American elites to mock anyone who is unwilling to sacrifice their families, communities, and networks in the name of career development/personal advancement. I'm not into most aspects of the populism that is sweeping the US right now, but the elite dismissal of basic family- and community-building is IMO completely real. The brutal policies that result - of forced displacement, of people adrift without support networks - are one of the very real reasons why anti-elite sentiment will continue to increase.
  - randomdata 9y ago
    > Most of America agrees with you The ever increasing urbanization rate suggests otherwise. If the majority of Americans had stuck close to their families, these cities would be small settlements at best, and maybe wouldn't even exist at all. In reality, the high cost (which may come in the form of lower income) of living elsewhere has pushed most into these cities.
    - cat199 9y ago
      Just because one relocates out of economic necessity doesn't mean that was their best preference or philosophical ideology.
    - lovich 9y ago
      I think woosh might be in order here. @potatolicious is discussing how people value their communities but American elites can't understand not sacrificing everything for your career or economics, and your reply is to just discuss the economics?
      - randomdata 9y ago
        If you want to take that point of view, the American elites are giving these people an opportunity to return to the communities they would have lived in had they not been pushed out of those areas in the first place.
    - potatolicious 9y ago
      Like the other user said, the pattern of what people end up doing isn't necessarily the pattern of what people want to do. More specifically, though, the majority of Americans have stuck close to their families - they may not live in the same exact town they grew up in, but most live within a certain radius of where their family/community/network is. Americans have shown that they are willing to move to follow economic fortunes, but remain tethered to the general area their families and loved ones are in. And this - at least anecdotally - is a common preference. I've lost count of the number of conversations I've had with colleagues and friends about where they can live where they can still be in range of [parents|grandparents|cousins|organizations|institutions]. And this is where I think the rhetoric goes off the rails - some forcible relocation may be inevitable - after all, we can't ensure there are enough jobs for all people in all places at all times. But there's a line between acknowledging that forced migration is necessary/inevitable, and regarding those who resist it with derision. God help us if we ever fault someone for wanting to stay near their family and their community.
  - closeparen 9y ago
    Each of the places that elites think we should abandon was created, in its time, by people uprooting their families to move to it. Most had zero or minimal population until a few generations ago. It's unclear why migration should stop now. Why is this the status quo that should be locked in, rather than the status quo of 50 years ago or 50 years from now? The disturbing trend is that migration has slowed to historical lows. Among Americans, being unwilling to move for opportunity is the new development. Of all the settlement patterns that could be locked in for eternity, today's is a poor choice.
Hydraulix989 9y ago
Compensation isn't nearly as elastic as housing prices though. Not only that, the demand side for housing is also the supply side for the job market, so prices are squeezed on both sides.
- randomdata 9y ago
  > Compensation isn't nearly as elastic as housing prices though. Because there is usually room to give. If people were on the brink of actually having to leave due to rising costs, incomes would lose their inelasticity pretty quickly, insofar as the need for labour is required. There is always superfluous work that is useful at a low price, but fine to give up completely if costs grow too high. > Not only that, the demand side for housing is also the supply side for the job market, so prices are squeezed on both sides. Squeezing is necessary to a point. After all, the economy eventually seeks equilibrium. It has been the case – at least before housing costs grew out of control – that one could make a fortune by moving to the Bay Area, where average incomes are significantly higher than most of the rest of the country. Now the costs are rising to close the gap with lower-income areas. If someone in a low-cost area has a gross income of $30,000, and expenses of $25,000, then someone in a high-cost area with a gross income of $150,000 can take on expenses of $145,000 without being any worse off. While housing isn't the only cost one has, it is usually among the largest (with taxes being the other major expense). Having $145k to spend on expenses each year can go a long way.
  - Hydraulix989 9y ago
    "If someone in a low-cost area has a gross income of $30,000, and expenses of $25,000, then someone in a high-cost area with a gross income of $150,000 can take on expenses of $145,000 without being any worse off." I disagree: $5,000 has a lot more buying power in the low income area than the high-cost area.
    - randomdata 9y ago
      I guess that ultimately depends on what you want to do with your discretionary money. The day-to-day costs are already accounted for in our hypothetical examples. Someone in a low-cost area may want to travel to the city to take in the entertainment and amenities available in the big flashy city, in which case that money is being spent in a high-cost area. Similarly, someone in a high-cost area may want to travel to a low-cost area to take in what it has to offer and thus will spend it in a low-cost area. In that case, the person with $5k in a high-cost area is actually still better off. If you're going buy an iPhone with that money, the price isn't going to vary much in either place. If the $5k is saved in both cases, there is no real difference either.
wbl 9y ago
Why shouldn't we build more to promote clustering?
ubernostrum 9y ago
anyone providing value to the local economy Nice to see that all the people who actually make the city function -- so that those high-paid "value providers" can live there and get work done there -- are completely written off in your analysis.
- randomdata 9y ago
  Where are they written off, exactly? They are most definitely included. If anything, they are specifically the people who am I talking about. Unless there is some reason their function isn't actually necessary, in which case, yes, the jobs may disappear. But I do not see the trouble with unnecessary jobs disappearing. Nobody is crying over the loss of loom operators either.
  - ubernostrum 9y ago
    Turns out a city needs police officers. And firefighters. And garbage collectors. And transit operators. And cooks. And cleaners. And waiters. And teachers. And construction workers. And... lots and lots of jobs that don't involve getting paid $200k to use node.js to build a platform that does nothing, earns no revenue, and goes under 12 months later having provided no return on $100m in VC money. But for some reason that is the job people on HN think is "value".
    - randomdata 9y ago
      There is no big book in the sky that says how much a job has to be paid. It is simply supply and demand. If the populace needs police officers, firefighters, garbage collectors, transit operators, cooks, cleaners, waiters, and teachers, there is no reason those jobs cannot also pay $200k per year – if that is what it takes to keep people in the region doing those jobs. Nobody thinks there is special value in that node.js job. It is simply that $200k is what it takes to incentivize someone to both live in the Bay Area and work on that node.js project. If the VCs could find people matching that criteria to do the job for less, they would be jumping all over those people. Why do you think SV's largest tech companies have been pushing the government so hard to ensure that everyone learn how to code in school? But, for now at least, they don't exist. And when the people for the other aforementioned jobs don't exist at a lower price, pay has no choice to go up for the jobs as well. Unless the local population decide those jobs aren't as necessary as you claim they are and choose to forego them entirely. Which is always an option too.

RobertoG 9y ago

maybe they were born there and their family, community and network is there? or is that a nonsense thing to say in the States? In some places of Europe that would be a pretty normal feeling.

potatolicious 9y ago
> "or is that a nonsense thing to say in the States?" It's a nonsense thing to say in front of the educated American elite. Most of America agrees with you, but as we've seen, there is a disturbing trend amongst American elites to mock anyone who is unwilling to sacrifice their families, communities, and networks in the name of career development/personal advancement. I'm not into most aspects of the populism that is sweeping the US right now, but the elite dismissal of basic family- and community-building is IMO completely real. The brutal policies that result - of forced displacement, of people adrift without support networks - are one of the very real reasons why anti-elite sentiment will continue to increase.
- randomdata 9y ago
  > Most of America agrees with you The ever increasing urbanization rate suggests otherwise. If the majority of Americans had stuck close to their families, these cities would be small settlements at best, and maybe wouldn't even exist at all. In reality, the high cost (which may come in the form of lower income) of living elsewhere has pushed most into these cities.
  - cat199 9y ago
    Just because one relocates out of economic necessity doesn't mean that was their best preference or philosophical ideology.
  - lovich 9y ago
    I think woosh might be in order here. @potatolicious is discussing how people value their communities but American elites can't understand not sacrificing everything for your career or economics, and your reply is to just discuss the economics?
    - randomdata 9y ago
      If you want to take that point of view, the American elites are giving these people an opportunity to return to the communities they would have lived in had they not been pushed out of those areas in the first place.
  - potatolicious 9y ago
    Like the other user said, the pattern of what people end up doing isn't necessarily the pattern of what people want to do. More specifically, though, the majority of Americans have stuck close to their families - they may not live in the same exact town they grew up in, but most live within a certain radius of where their family/community/network is. Americans have shown that they are willing to move to follow economic fortunes, but remain tethered to the general area their families and loved ones are in. And this - at least anecdotally - is a common preference. I've lost count of the number of conversations I've had with colleagues and friends about where they can live where they can still be in range of [parents|grandparents|cousins|organizations|institutions]. And this is where I think the rhetoric goes off the rails - some forcible relocation may be inevitable - after all, we can't ensure there are enough jobs for all people in all places at all times. But there's a line between acknowledging that forced migration is necessary/inevitable, and regarding those who resist it with derision. God help us if we ever fault someone for wanting to stay near their family and their community.
- closeparen 9y ago
  Each of the places that elites think we should abandon was created, in its time, by people uprooting their families to move to it. Most had zero or minimal population until a few generations ago. It's unclear why migration should stop now. Why is this the status quo that should be locked in, rather than the status quo of 50 years ago or 50 years from now? The disturbing trend is that migration has slowed to historical lows. Among Americans, being unwilling to move for opportunity is the new development. Of all the settlement patterns that could be locked in for eternity, today's is a poor choice.

Hydraulix989 9y ago

Compensation isn't nearly as elastic as housing prices though. Not only that, the demand side for housing is also the supply side for the job market, so prices are squeezed on both sides.

randomdata 9y ago
> Compensation isn't nearly as elastic as housing prices though. Because there is usually room to give. If people were on the brink of actually having to leave due to rising costs, incomes would lose their inelasticity pretty quickly, insofar as the need for labour is required. There is always superfluous work that is useful at a low price, but fine to give up completely if costs grow too high. > Not only that, the demand side for housing is also the supply side for the job market, so prices are squeezed on both sides. Squeezing is necessary to a point. After all, the economy eventually seeks equilibrium. It has been the case – at least before housing costs grew out of control – that one could make a fortune by moving to the Bay Area, where average incomes are significantly higher than most of the rest of the country. Now the costs are rising to close the gap with lower-income areas. If someone in a low-cost area has a gross income of $30,000, and expenses of $25,000, then someone in a high-cost area with a gross income of $150,000 can take on expenses of $145,000 without being any worse off. While housing isn't the only cost one has, it is usually among the largest (with taxes being the other major expense). Having $145k to spend on expenses each year can go a long way.
- Hydraulix989 9y ago
  "If someone in a low-cost area has a gross income of $30,000, and expenses of $25,000, then someone in a high-cost area with a gross income of $150,000 can take on expenses of $145,000 without being any worse off." I disagree: $5,000 has a lot more buying power in the low income area than the high-cost area.
  - randomdata 9y ago
    I guess that ultimately depends on what you want to do with your discretionary money. The day-to-day costs are already accounted for in our hypothetical examples. Someone in a low-cost area may want to travel to the city to take in the entertainment and amenities available in the big flashy city, in which case that money is being spent in a high-cost area. Similarly, someone in a high-cost area may want to travel to a low-cost area to take in what it has to offer and thus will spend it in a low-cost area. In that case, the person with $5k in a high-cost area is actually still better off. If you're going buy an iPhone with that money, the price isn't going to vary much in either place. If the $5k is saved in both cases, there is no real difference either.

wbl 9y ago

Why shouldn't we build more to promote clustering?

ubernostrum 9y ago

anyone providing value to the local economy Nice to see that all the people who actually make the city function -- so that those high-paid "value providers" can live there and get work done there -- are completely written off in your analysis.

randomdata 9y ago
Where are they written off, exactly? They are most definitely included. If anything, they are specifically the people who am I talking about. Unless there is some reason their function isn't actually necessary, in which case, yes, the jobs may disappear. But I do not see the trouble with unnecessary jobs disappearing. Nobody is crying over the loss of loom operators either.
- ubernostrum 9y ago
  Turns out a city needs police officers. And firefighters. And garbage collectors. And transit operators. And cooks. And cleaners. And waiters. And teachers. And construction workers. And... lots and lots of jobs that don't involve getting paid $200k to use node.js to build a platform that does nothing, earns no revenue, and goes under 12 months later having provided no return on $100m in VC money. But for some reason that is the job people on HN think is "value".
  - randomdata 9y ago
    There is no big book in the sky that says how much a job has to be paid. It is simply supply and demand. If the populace needs police officers, firefighters, garbage collectors, transit operators, cooks, cleaners, waiters, and teachers, there is no reason those jobs cannot also pay $200k per year – if that is what it takes to keep people in the region doing those jobs. Nobody thinks there is special value in that node.js job. It is simply that $200k is what it takes to incentivize someone to both live in the Bay Area and work on that node.js project. If the VCs could find people matching that criteria to do the job for less, they would be jumping all over those people. Why do you think SV's largest tech companies have been pushing the government so hard to ensure that everyone learn how to code in school? But, for now at least, they don't exist. And when the people for the other aforementioned jobs don't exist at a lower price, pay has no choice to go up for the jobs as well. Unless the local population decide those jobs aren't as necessary as you claim they are and choose to forego them entirely. Which is always an option too.