4 ms·

> They absolutely do. Higher income folks can outbid and outpay for all basic essential services, driving the price of those services higher. By why does biddi

> They absolutely do. Higher income folks can outbid and outpay for all basic essential services, driving the price of those services higher. By why does bidding have to happen in the first place? Because there isn't enough supply. If increase of supply matches increase of demand, the price doesn't go up. Cities like Seattle have built a lot of housing but there's still more to be done. Seattle only built one unit of housing for every 3 jobs added. At least it's not as bad as San Francisco where only one unit of housing has been added for every 6 jobs. > Their governments would, true. Most of their residents would not, because they'd have to bear the cost of the higher income residents. (See how most people's reaction to the Amazon HQ2 search was, "please not here") Er, no, most people really did want Amazon to move there. New York is the exception not the norm, probably because the fallacious belief that well paying jobs causes costs to rise is generally more prevalent among so-called progressives (which disproportionately live in liberal cities).

rmah 8y ago
The only objection to Amazon opening a facility in NYC was the tax breaks it got. Otherwise, no one in NYC would have cared much at all.
- manfredo 8y ago
  True. Though I think there was a lot of misinformation about the Amazon deal. Lots of people thought that New York was actually giving Amazon 3 billion dollars, when in reality it was just waiving 3 billion worth of taxes over several years. It's like discounted rent as a move-in incentive.
maxsilver 8y ago
> Because there isn't enough supply. No, Seattle proves that even if you get everybody with a pulse building apartment buildings, you still can't build enough supply to soak up the excess capital. For example: Why is there a shortage of daycare in Seattle? There's no shortage of space for it. https://www.seattletimes.com/business/developers-struggle-to-get-ground-floor-retail-leases/ https://www.seattletimes.com/business/developers-struggle-to... There's no shortage of demand for daycare - https://www.seattletimes.com/seattle-news/you-should-get-on-a-waiting-list-seattles-child-care-crunch-takes-toll-on-parents-providers/ https://www.seattletimes.com/seattle-news/you-should-get-on-... . And all those Amazon employees are flush with cash. "Daycare centers will just pay more for labor, to hire more people" you say. "This money will trickle down to everyone that way" -- except it doesn't work that way - https://www.foxbusiness.com/personal-finance/broken-economics-for-preschool-workers-child-care-sector https://www.foxbusiness.com/personal-finance/broken-economic... . Just because Amazon people can afford high rates, doesn't mean everyone can. So daycare becomes broken for everyone, despite the "benefits" of the extra cash. It turns out that situations can be more complicated than "ECON 101: everything is just supply vs demand". I'm using daycare as an example above, but you can repeat this for lots of things (healthcare, housing, transportation, etc). This is how high income earners can "break" an economy with higher cost of living, despite not doing anything wrong themselves. And this isn't a hypothetical situation, this is how the problem is actually playing out today, across most mid-sized to major cities in the US nationwide.
- manfredo 8y ago
  > For example: Why is there a shortage of daycare in Seattle? There's no shortage of space for it. https://www.seattletimes.com/business/developers-struggle-to.. https://www.seattletimes.com/business/developers-struggle-to.... There's no shortage of demand for daycare - https://www.seattletimes.com/seattle-news/you-should-get-on-.. https://www.seattletimes.com/seattle-news/you-should-get-on-.... . And all those Amazon employees are flush with cash. But the point is, there's still a shortage. It's not the mere fact that wealthy people exist that is causing the cost of daycare to go up. It's the fact that there isn't enough daycare. If the demand for daycare went up and the supply didn't change then daycare would have gotten more expensive with or without Amazon. > "Daycare centers will just pay more for labor, to hire more people" you say. "This money will trickle down to everyone that way" -- except it doesn't work that way - https://www.foxbusiness.com/personal-finance/broken-economic.. https://www.foxbusiness.com/personal-finance/broken-economic.... . Just because Amazon people can afford high rates, doesn't mean everyone can. So daycare becomes broken for everyone, despite the "benefits" of the extra cash. Sure wealthy people may be the only ones they can afford scarce goods and services, but wealthy people don't directly cause through scarcity. Scarcity is caused by lack of supply relative to demand. A sudden influx of residents increases demand, but this is fixed by increasing supply. I'm really confused at why you're using this as an example of how the rules of supply and demand don't apply. This is a perfect example of of how supply and demand functions: demand for daycare increases, but supply doesn't grow to meet it. The price goes up. Exactly as what we would expect based on the rules of supply and demand.
  - maxsilver 8y ago
    > demand for daycare increases, but supply doesn't grow to meet it. The price goes up. Exactly as what we would expect based on the rules of supply and demand. So, by your logic, demand for daycare workers should rise, supply hasn't grown to meet demand, so the wages for daycare workers should spike up. Exactly what you would "expect". Except it hasn't. Daycare wages are effectively flat. (In real world dollars, they're actually dropping, once you factor in CoL/inflation). If "everything is just basic supply and demand", how do you explain all the instances like this where supply and demand are fundamentally broken.
adt2bt 8y ago
> By why does bidding have to happen in the first place? Because there isn't enough supply. If increase of supply matches increase of demand, the price doesn't go up. Housing isn't as easy to create as normal products. There's a multi-year lag time to get new housing built. Here in Seattle we just had a number of high-rise luxury apartments open right next to Amazon's HQ within ~6 months of each other. As a result, rents in the area flatlined for a period. It was a good thing. Those apartments were initially conceived probably ~3-5 years ago. 5 years ago AMZN was a $150B company, now it's worth 6x as much. If you had a time machine and could go back 10 years and look at how fast Amazon would grow in the 2010s, you'd absolutely invest massively in housing. We didn't have one, instead housing prices skyrocketed along with the rise of this one company that dominates our local economy. > probably because the fallacious belief that well paying jobs causes costs to rise is generally more prevalent among so-called progressives Are you trying to argue that Amazon's growth has no impact on the cost of living in Seattle? How is this a 'belief' thing? There is a preponderance of evidence that the rise in the tech sector in Seattle has dramatically increased housing prices here.
- manfredo 8y ago
  A growth in jobs can lead to increased demand, but that alone isn't enough to make prices rise. What caused the increase in price was the failure to accommodate that growth. You pointed this out yourself in your first two paragraphs, I'm not sure why you turned a 180 in this last one.
  - adt2bt 8y ago
    I didn't turn a 180. I laid out that housing supply cannot keep up with the rise in demand in my first two paragraphs, which leads to the conclusion that the rise in demand will result in a rise in prices.
    - manfredo 8y ago
      Housing supply can keep up with rising demand of enough of it gets built. If not enough of it is being built then Seattle needs to address why construction is too slow, to expensive, etc. There are individual cities that have larger populations than the entirety of Washington State that have lower rents than Seattle. Demand does not cause higher prices , lack of supply causes prices.
fwip 8y ago
Seattle has more cranes building than almost anywhere else in the US, over the last few years.
- manfredo 8y ago
  It's still only adding one unit of housing for every three jobs.
  - fwip 8y ago
    So, if construction can't keep up, that means we're adding jobs too quickly.
    - marssaxman 8y ago
      That is the fault of Seattle's extremely conservative zoning code, under which somewhere between two-thirds and three-quarters of the city (depending on how you measure it) has been left frozen in amber, restricted to suburban-style single family housing only. Opportunities to build are scarce and therefore expensive.

rmah 8y ago

The only objection to Amazon opening a facility in NYC was the tax breaks it got. Otherwise, no one in NYC would have cared much at all.

manfredo 8y ago
True. Though I think there was a lot of misinformation about the Amazon deal. Lots of people thought that New York was actually giving Amazon 3 billion dollars, when in reality it was just waiving 3 billion worth of taxes over several years. It's like discounted rent as a move-in incentive.

maxsilver 8y ago

> Because there isn't enough supply. No, Seattle proves that even if you get everybody with a pulse building apartment buildings, you still can't build enough supply to soak up the excess capital. For example: Why is there a shortage of daycare in Seattle? There's no shortage of space for it. https://www.seattletimes.com/business/developers-struggle-to-get-ground-floor-retail-leases/ https://www.seattletimes.com/business/developers-struggle-to... There's no shortage of demand for daycare - https://www.seattletimes.com/seattle-news/you-should-get-on-a-waiting-list-seattles-child-care-crunch-takes-toll-on-parents-providers/ https://www.seattletimes.com/seattle-news/you-should-get-on-... . And all those Amazon employees are flush with cash. "Daycare centers will just pay more for labor, to hire more people" you say. "This money will trickle down to everyone that way" -- except it doesn't work that way - https://www.foxbusiness.com/personal-finance/broken-economics-for-preschool-workers-child-care-sector https://www.foxbusiness.com/personal-finance/broken-economic... . Just because Amazon people can afford high rates, doesn't mean everyone can. So daycare becomes broken for everyone, despite the "benefits" of the extra cash. It turns out that situations can be more complicated than "ECON 101: everything is just supply vs demand". I'm using daycare as an example above, but you can repeat this for lots of things (healthcare, housing, transportation, etc). This is how high income earners can "break" an economy with higher cost of living, despite not doing anything wrong themselves. And this isn't a hypothetical situation, this is how the problem is actually playing out today, across most mid-sized to major cities in the US nationwide.

manfredo 8y ago
> For example: Why is there a shortage of daycare in Seattle? There's no shortage of space for it. https://www.seattletimes.com/business/developers-struggle-to.. https://www.seattletimes.com/business/developers-struggle-to.... There's no shortage of demand for daycare - https://www.seattletimes.com/seattle-news/you-should-get-on-.. https://www.seattletimes.com/seattle-news/you-should-get-on-.... . And all those Amazon employees are flush with cash. But the point is, there's still a shortage. It's not the mere fact that wealthy people exist that is causing the cost of daycare to go up. It's the fact that there isn't enough daycare. If the demand for daycare went up and the supply didn't change then daycare would have gotten more expensive with or without Amazon. > "Daycare centers will just pay more for labor, to hire more people" you say. "This money will trickle down to everyone that way" -- except it doesn't work that way - https://www.foxbusiness.com/personal-finance/broken-economic.. https://www.foxbusiness.com/personal-finance/broken-economic.... . Just because Amazon people can afford high rates, doesn't mean everyone can. So daycare becomes broken for everyone, despite the "benefits" of the extra cash. Sure wealthy people may be the only ones they can afford scarce goods and services, but wealthy people don't directly cause through scarcity. Scarcity is caused by lack of supply relative to demand. A sudden influx of residents increases demand, but this is fixed by increasing supply. I'm really confused at why you're using this as an example of how the rules of supply and demand don't apply. This is a perfect example of of how supply and demand functions: demand for daycare increases, but supply doesn't grow to meet it. The price goes up. Exactly as what we would expect based on the rules of supply and demand.
- maxsilver 8y ago
  > demand for daycare increases, but supply doesn't grow to meet it. The price goes up. Exactly as what we would expect based on the rules of supply and demand. So, by your logic, demand for daycare workers should rise, supply hasn't grown to meet demand, so the wages for daycare workers should spike up. Exactly what you would "expect". Except it hasn't. Daycare wages are effectively flat. (In real world dollars, they're actually dropping, once you factor in CoL/inflation). If "everything is just basic supply and demand", how do you explain all the instances like this where supply and demand are fundamentally broken.

adt2bt 8y ago

> By why does bidding have to happen in the first place? Because there isn't enough supply. If increase of supply matches increase of demand, the price doesn't go up. Housing isn't as easy to create as normal products. There's a multi-year lag time to get new housing built. Here in Seattle we just had a number of high-rise luxury apartments open right next to Amazon's HQ within ~6 months of each other. As a result, rents in the area flatlined for a period. It was a good thing. Those apartments were initially conceived probably ~3-5 years ago. 5 years ago AMZN was a $150B company, now it's worth 6x as much. If you had a time machine and could go back 10 years and look at how fast Amazon would grow in the 2010s, you'd absolutely invest massively in housing. We didn't have one, instead housing prices skyrocketed along with the rise of this one company that dominates our local economy. > probably because the fallacious belief that well paying jobs causes costs to rise is generally more prevalent among so-called progressives Are you trying to argue that Amazon's growth has no impact on the cost of living in Seattle? How is this a 'belief' thing? There is a preponderance of evidence that the rise in the tech sector in Seattle has dramatically increased housing prices here.

manfredo 8y ago
A growth in jobs can lead to increased demand, but that alone isn't enough to make prices rise. What caused the increase in price was the failure to accommodate that growth. You pointed this out yourself in your first two paragraphs, I'm not sure why you turned a 180 in this last one.
- adt2bt 8y ago
  I didn't turn a 180. I laid out that housing supply cannot keep up with the rise in demand in my first two paragraphs, which leads to the conclusion that the rise in demand will result in a rise in prices.
  - manfredo 8y ago
    Housing supply can keep up with rising demand of enough of it gets built. If not enough of it is being built then Seattle needs to address why construction is too slow, to expensive, etc. There are individual cities that have larger populations than the entirety of Washington State that have lower rents than Seattle. Demand does not cause higher prices , lack of supply causes prices.

fwip 8y ago

Seattle has more cranes building than almost anywhere else in the US, over the last few years.

manfredo 8y ago
It's still only adding one unit of housing for every three jobs.
- fwip 8y ago
  So, if construction can't keep up, that means we're adding jobs too quickly.
  - marssaxman 8y ago
    That is the fault of Seattle's extremely conservative zoning code, under which somewhere between two-thirds and three-quarters of the city (depending on how you measure it) has been left frozen in amber, restricted to suburban-style single family housing only. Opportunities to build are scarce and therefore expensive.