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> To see why, step back and consider two 19th-century “classical economists” who focused on high rents: David Ricardo and Henry George. Both built models where
by golemotron 8y ago
> To see why, step back and consider two 19th-century “classical economists” who focused on high rents: David Ricardo and Henry George. Both built models where land is so scarce that the cost of renting land absorbs most of the social surplus. We are not (yet?) at that point, but these models give insight into where today’s most expensive cities are headed.
The thing is, land is not scarce. There is an incredible amount of land in the US. When rent is high in a city that is the market telling you that you need to develop new cities. There's no reason why people have to be piled on each other like rats in San Francisco and NYC.
- SketchySeaBeast 8y ago> There's no reason why people have to be piled on each other like rats in San Francisco and NYC. Yes there is. It's where all the economic and social momentum is, not to mention the infrastructure - what steps does someone take to encourage people to flock to a new city that has no infrastructure, no businesses, and no population? What branch of government or enterprising individual builds out the infrastructure for such a project?
- golemotron 8y agoAren't we problem solvers?
- SketchySeaBeast 8y agoNo, we evolve society based upon cost / benefit - my argument above is that there is far to great a cost for any benefit. Someone needs to come up with billions in seed money for a high risk potential payoff in centuries?
- golemotron 8y agoCheck out Austin, TX. The trick is finding something happening organically like that and then growing with it.
- SketchySeaBeast 8y agoAustin, TX is 200 years old. While it has grown massively in the last 70 years, that's due to the oil boom. What stands out to you that makes Austin seem like a stand out example?
- golemotron 8y agoBookmark this comment and return to it in 5 years.
- SketchySeaBeast 8y agoI'm confused as to your point - how does Austin Texas prove that you can develop new cities in a modern setting?
- lkbm 8y agoI don't think by "new cities" he meant starting a new city in an empty field. Take an existing, small, cheap city and go there. The thing stopping us is the network effects of big cities and tech hubs, but Austin is an example of relatively sudden, rapid growth. (Oil may have played a part, but in recent years it's been tech. My perception is that the oil jobs are in Houston.) Could we take ten cities that look like Austin circa 1980 and turn them into Austin today rather than continuing to cram into NYC and SF? Would that be better (by whatever metrics we care about)?
- SketchySeaBeast 8y agoAh, ok, I can understand more from that angle then, but it looks like the Austin manual growth rate hasn't markedly increased in recent decades: http://worldpopulationreview.com/us-cities/austin-population/ http://worldpopulationreview.com/us-cities/austin-population...
- mcguire 8y agoThen what's the problem? You don't expect to get those advantages without paying for them, right?
- SketchySeaBeast 8y agoI look forward to the "let's build Hipsterburg" gofundme - the $1 billion stretch goal of basic sanitation will be really nice.
- conanbatt 8y agoIts a mismatch of terminology to say land is scarce. Generally its about the utility of land. Rents are the difference between the least-productive land and any other (Ricardo). City land is useful not only because people congregate, but also particularly because taxes provide services. When the taxes are levied not on the land, it makes the land more valuable (as it receives benefits it doesnt pay for) and thus creates rents.