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A few points. First, the Houston metro is actually 10000 sq. miles. And very little of that is green space, unlike the Bay Area, which is filled with large stri
by ummonk 8y ago
A few points. First, the Houston metro is actually 10000 sq. miles. And very little of that is green space, unlike the Bay Area, which is filled with large strips of mountains / state parks.
Additionally, I don't have numbers but Houston does seem to have much lower income inequality for the bulk of the population. The SF Bay Area is really good at churning a lot of moderately wealthy people through the tech industry, who far outearn anyone else, and end up bidding against each other for the available housing. I imagine Houston's energy industry creates far fewer moderately wealthy people who outstrip everyone else in income to this extent.
Finally, one big thing that Texas does very right is having strong property taxes instead of state income taxes. You don't have early homeowners holding on to their feudal properties while new workers struggle to make ends meet, as you do in California.
- rukittenme 8y agoTax and land use policies. Who would have thought... Median salary for Houston: $61,708. Median salary for SF: $77,734. Does a 26% increase in salary explain a 250% increase in rents?
- ummonk 8y agoMarket-rate rents are driven by young, above-median workers - a young software engineer in SF probably earns significantly more than a young professional in the energy industry in Houston.
- true_tuna 8y agoYou have the causal chain backwards. Market rate rents are driven by high demand low supply. If you add 30,000 people to an area and only 7,000 new units, the price of existing units rise. The employers hiring new workers have to pay higher wages due to higher cost of living. Normal people like cashiers and teachers can’t afford it and have to commute from cheaper areas. It’s supply and demand.
- ummonk 8y agoYes, I was specifically talking about the kind of demand that can result in such high rents (if supply gets constrained).