4 ms·

It's potentially an interesting demonstration of how keeping an area capable of housing low-skill workers can be beneficial to keeping their own high-skill work

It's potentially an interesting demonstration of how keeping an area capable of housing low-skill workers can be beneficial to keeping their own high-skill workers' neighborhoods staffed with those low-skill jobs. Something I always find really interesting, as a San Francisco resident, is that people seem to think that the market is incapable of resolving the problem of the purported loss of low-skilled workers to act as the baristas, servers, deliveries, etc, because rising cost of living drives those people out. But there are many obvious avenues in which this resolves itself, the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city. Now, maybe this is yet an alternative to the more straightforward equilibrium, wherein some of the employers in the city begin to provide lower-skilled workers with housing for the benefit of their own workforce. I have no idea what Microsoft's motivation for doing this is, but it would be an interesting possibility.

opportune 8y ago
Also, providing tax-funded low cost housing as a community to make sure you don't lose your regional baristas and cooks is basically a tax payer subsidy to keep eating out affordable.
- omeid2 8y ago
  if eating out becomes unafforadble, many jobs and countless hours of leisure will be lost. No one complains about making flying affordable with billions of dollar in aviation subsidies, from R&D, Airport and related infrastructure maintenance, to straight-out bailouts. I am not making a case against affordable aviation, but rather giving an example of the fact that many aspects of society is simply not directly-profitable but necessary for a healthy economy and community.
  - lotsofpulp 8y ago
    The correct solution in that case would be to give people cash, so that the subsidy is properly accounted for, otherwise it will be lost to corruption via various accounting tricks and games that politicians and vendors can play, and taxpayers will never get a true picture of their government (as is the situation now). See defined benefit pension benefits in lieu of cash pay.
vkou 8y ago
> But there are many obvious avenues in which this resolves itself, the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city. In an economic fairy tale, sure. In reality, what happens is that people working low-income jobs end up with a two and a half hour commute from half-the-state-away, or, alternatively, living in a slumlord's idea of a barracks. Or, sometimes, both. It's a 'solution' much in the same way that in the Soviet Union, people would 'solve' the problem of toilet paper shortages by joining the Communist party, which would entitle them a subscription to Pravda. The wealthiest country in the world can, and should do better.
- remarkEon 8y ago
  One thing that I haven’t really seen explored much is how much influence real estate investment from foreign companies influences housing costs in places like this. I don’t foresee it being an overwhelming influence, but I can’t help but wonder if there’s a crowding out effect going on where a decent percentage of housing sits idle, or not in use by people who actually work in the area. Edit: meant to say “foreign countries”, but the point is the same.
- ralusek 8y ago
  It does NOT take an economic fairy tale to determine precisely how the situation plays itself out. For example, it's not as though the occupants of SF are going to be satisfied living in a city without access to bars and restaurants, no matter how wealthy they are. There are bars and restaurants in SF as it stands, are their staffs all living in subsidized affordable housing? No. For one, they simply get paid more than outside of the city, because things cost more. They get larger tips because people make more money, and have larger bills to tip on. While some might be subsidized with rent control, others live with roommates, or they live outside of the city. There are any number of circumstances they find themselves in, but the point is that it is worth it to them to be able to work in the city. If it was not, they would not work here. And if they did not work here, their wages would go up in order to fill the demand. And let's take this even further. What if their wages go up so high that the drinks and food begin to cost a very undesirably high amount to the residents? Well then, that begins to affect the desirability of living in the city. Suddenly less people want to live here, because the cost of living is so high. And when less people are competing to live here, rent starts to go down, and so do wages, and prices. The entirety of the system is in stabilizing flux as a consequence of this. If we're actually arriving at situations where people are making a two and half hour commute as a consequence of them having no alternative options (which is not the same as them making the commute because of better opportunities), then we agree that we're no longer dealing with a viable model. I used to do a 1.5 hour commute each way, every day, for over a year, because it was worth it to me to live in that particular area rather than being closer to my work. If what you're suggesting is that their only options are effectively capable of exploiting them due to no alternatives, you're effectively describing an overall employment crisis. Given a system-wide lack of employment opportunities, which is certainly not the reality we currently find ourselves in, then we surely agree that there is an appropriate role for the state to fulfill in mitigating the situation. But that still doesn't mean that we agree that affordable housing is the correct mechanism for addressing this problem, which we surely do not.
raz32dust 8y ago
" the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city." - This is what should happen in a true free market. But the real world has zoning laws, building restrictions, slow and unreliable public transport and NIMBYs who will oppose any housing projects. That can make it impossible for new workers to meet the demand.

opportune 8y ago

Also, providing tax-funded low cost housing as a community to make sure you don't lose your regional baristas and cooks is basically a tax payer subsidy to keep eating out affordable.

omeid2 8y ago
if eating out becomes unafforadble, many jobs and countless hours of leisure will be lost. No one complains about making flying affordable with billions of dollar in aviation subsidies, from R&D, Airport and related infrastructure maintenance, to straight-out bailouts. I am not making a case against affordable aviation, but rather giving an example of the fact that many aspects of society is simply not directly-profitable but necessary for a healthy economy and community.
- lotsofpulp 8y ago
  The correct solution in that case would be to give people cash, so that the subsidy is properly accounted for, otherwise it will be lost to corruption via various accounting tricks and games that politicians and vendors can play, and taxpayers will never get a true picture of their government (as is the situation now). See defined benefit pension benefits in lieu of cash pay.

vkou 8y ago

> But there are many obvious avenues in which this resolves itself, the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city. In an economic fairy tale, sure. In reality, what happens is that people working low-income jobs end up with a two and a half hour commute from half-the-state-away, or, alternatively, living in a slumlord's idea of a barracks. Or, sometimes, both. It's a 'solution' much in the same way that in the Soviet Union, people would 'solve' the problem of toilet paper shortages by joining the Communist party, which would entitle them a subscription to Pravda. The wealthiest country in the world can, and should do better.

remarkEon 8y ago
One thing that I haven’t really seen explored much is how much influence real estate investment from foreign companies influences housing costs in places like this. I don’t foresee it being an overwhelming influence, but I can’t help but wonder if there’s a crowding out effect going on where a decent percentage of housing sits idle, or not in use by people who actually work in the area. Edit: meant to say “foreign countries”, but the point is the same.
ralusek 8y ago
It does NOT take an economic fairy tale to determine precisely how the situation plays itself out. For example, it's not as though the occupants of SF are going to be satisfied living in a city without access to bars and restaurants, no matter how wealthy they are. There are bars and restaurants in SF as it stands, are their staffs all living in subsidized affordable housing? No. For one, they simply get paid more than outside of the city, because things cost more. They get larger tips because people make more money, and have larger bills to tip on. While some might be subsidized with rent control, others live with roommates, or they live outside of the city. There are any number of circumstances they find themselves in, but the point is that it is worth it to them to be able to work in the city. If it was not, they would not work here. And if they did not work here, their wages would go up in order to fill the demand. And let's take this even further. What if their wages go up so high that the drinks and food begin to cost a very undesirably high amount to the residents? Well then, that begins to affect the desirability of living in the city. Suddenly less people want to live here, because the cost of living is so high. And when less people are competing to live here, rent starts to go down, and so do wages, and prices. The entirety of the system is in stabilizing flux as a consequence of this. If we're actually arriving at situations where people are making a two and half hour commute as a consequence of them having no alternative options (which is not the same as them making the commute because of better opportunities), then we agree that we're no longer dealing with a viable model. I used to do a 1.5 hour commute each way, every day, for over a year, because it was worth it to me to live in that particular area rather than being closer to my work. If what you're suggesting is that their only options are effectively capable of exploiting them due to no alternatives, you're effectively describing an overall employment crisis. Given a system-wide lack of employment opportunities, which is certainly not the reality we currently find ourselves in, then we surely agree that there is an appropriate role for the state to fulfill in mitigating the situation. But that still doesn't mean that we agree that affordable housing is the correct mechanism for addressing this problem, which we surely do not.

raz32dust 8y ago

" the most obvious of which is that the prices of those services simply rise until it becomes worthwhile for those people to commute further, or that they can start to move back into the city." - This is what should happen in a true free market. But the real world has zoning laws, building restrictions, slow and unreliable public transport and NIMBYs who will oppose any housing projects. That can make it impossible for new workers to meet the demand.