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I think there should be a national effort to "spread out" the economy and fight the trend towards centralization in a few areas. If you build more housing in CA

I think there should be a national effort to "spread out" the economy and fight the trend towards centralization in a few areas. If you build more housing in CA, even more people will move there and the overcrowding will become even worse. There should be incentives for companies to move away from places like SV and NY. More acceptance of remote work would help too but I wouldn't hold my breath for it.

rileymat2 8y ago
I am not sure some areas that are growing are ideal from a water usage perspective, but I thought density was very efficient and should be promoted.
- dgudkov 8y ago
  Density creates land scarcity which in turns gives a lot of power to landlords who collect the lion's share or economic benefits created by density. Density should come hand in hand with power-rebalancing measures, e.g. tax property hikes, more efficient zoning, and government-controlled rent, but practically it doesn't happen.
  - epistasis 8y ago
    Density is the response to land scarcity that takes away power from landlords, not the other way around. When there's massive land scarcity, but density is not allowed, it gives landlords far far more power than if density were allowed. Land value taxation is one way to reduce speculative land use by landlords, but it's rarely used, unfortunately. And in California it would require overturning Prop 13, a hugely regressive tax policy that has been somehow falsely enshrined as helping the little guy out, when in reality it mostly helps landlords and speculative land hoarders.
    - taysic 8y ago
      Focusing jobs in one area reduces competition among landlords while fostering multiple job centers with amenities encourages competition including price competition
      - epistasis 8y ago
        What "focuses" jobs in one area though? Is it a conscious choice to place a job in a location, or is it the density of the people and the skills that allows the jobs to exist at all? The idea that jobs can be placed anywhere flies in the face of pretty much every single city's economic development efforts over the past few decades. It's not realistic, or reasonable. What can be placed anywhere is housing. The only reason that we don't have higher density is a small number of landowners lobbying to keep everything identical to the way that it was when they moved in, and when they moved in they had just massively changed the landscape from fruit groves to suburban sprawl. They said: change to allow me, but no more. And now they benefit massively by restricting density around them.
        taysic 8y ago
        If you’re talking about Silicon Valley that was converted from fruit groves to sprawl and a job center then how was that the result of density? In terms of density it’s not much different to many areas. The focusing is done due to a whole host of reasons but certainly encouraging jobs to spread out is not a bad idea for a number of reasons - including having options and livability
        DataWorker 8y ago
        People usually cite network effects, or more simply the VC and big money people live in sf and nyc and prefer their workers live there too. How many billionaires live in Boise?
    - dgudkov 8y ago
      >Density is the response to land scarcity that takes away power from landlords, not the other way around. "Density" in my comment is population density, not construction density. Unfortunately, construction density (and height) is restricted by zoning and all kinds of bylaws. Most residential areas in North America allow only single-family houses and prohibit multi-tenant buildings with 3-4 floors or more. Landlords benefit from such zoning rules immensely, because they drive land price up.
jogjayr 8y ago
> There should be incentives for companies to move away from places like SV and NY. There are already tons of incentives and tax breaks like this for companies. Just for a recent example, see Amazon HQ2. Companies also have the added incentive of lower labor costs. It's clearly not enough yet.
- maxxxxx 8y ago
  "Just for a recent example, see Amazon HQ2." That's a good example actually. It's hard to understand that NYC was offering subsidies to Amazon. NYC doesn't really need more people or more companies.
  - AnthonyMouse 8y ago
    It's not a matter of need. If you get more companies there is more local demand for labor, which means more jobs and higher wages, which means more tax revenue. Giving a company that will bring in a billion dollars in new tax revenue half that much in incentives still nets you half a billion dollars. The real issue is that this is true of everything. Cities compete with each other, but major metro hubs have such an intrinsic advantage that it allows them to suffer a large amount of corruption and waste and still not be uncompetitive. Until you're negotiating with a company large enough to bring with it its own economies of scale, and then it does make you uncompetitive, because Amazon could build HQ2 in the middle of the desert and a town would spring up around it regardless, in a way that a guy operating a food truck absolutely could not. They don't actually want to do that because NYC still has its intrinsic advantages, but if it also has very high taxes which then go to waste and not toward providing useful services, the benefits have to be weighed against the costs. (And realistically there are also better alternatives like Virginia rather than literally the middle of the desert.) Then the city becomes concerned that their high taxes and low efficiency are costing them Amazon so they come up with some kind of carve outs which they would need to keep Amazon but not the food truck or the real estate developer or doctor's office, and so it applies only to huge corporations and not to everybody else. Which then creates an unfair advantage for major companies with that kind of leverage, and then they start eating everything and driving out small and medium businesses who can't compete when they're the only ones paying high taxes. And that's what makes people upset. But you're never going to get Amazon if your offer is to tax them heavily and then waste the money. The way to be competitive on a level playing field is to cut out the waste in general so that nobody has to pay high taxes for low benefits.
sanderjd 8y ago
I'm really curious about the pros and cons here. Neither way seems obviously better than the other. Why is concentration worse than distribution? Why is distribution better?
- ip26 8y ago
  Concentration begetting more concentration combined with an unwillingness (don't underestimate SV's ability to dig in its heels) to develop leads to a real estate black hole for dollars, where an ever increasing portion of wealth is diverted to the competition for a place to live.
  - firethief 8y ago
    That's not tying up wealth, it's tying up money, and I don't see how that is even one of the many problems with the situation in e.g. SF.
- deleted 8y ago
  [deleted]
ironmagma 8y ago
Cities are popular because they are relatively efficient. You can build more towns and suburbs but they will be underserved because of the many pipelines a state has to manage that cities will receive priority for — road maintenance, DMVs, shipping hubs. If you live in a town and need any of these, you might have to travel a long way just to get your needs met.
- ip26 8y ago
  Yes, but we have 4,000 cities in the US, yet only something like 1 first class tech hub and two second class tech hubs. If we veer into market theory for a moment, it's better for everyone if there are many cities that are competitive places for technology companies.
  - throwaway34241 8y ago
    Why is it better for everyone? I imagine we have the current hubs because with a more liquid job market it makes finding jobs and employees easier. It's probably also good for investment since having many potential acquirers nearby increases the chance of a positive exit. I guess it's kind of an insurance against terrible (local) government policies if people move from city to city when one of them screws up. That doesn't sound like a terribly efficient system though.
snidane 8y ago
This is an instance of Jevon's paradox. The more housing you build to meet housing need of people then even more people will come in creating even larger demand for housing. https://en.m.wikipedia.org/wiki/Jevons_paradox https://en.m.wikipedia.org/wiki/Jevons_paradox
- epistasis 8y ago
  Do you have any sort of academic citation that Jevon's paradox applies in any way to housing, or is this just an intuition?
- imtringued 8y ago
  Jevons paradox is a nice example of bikeshedding. It doesn't change the decision making process at all because it looks like this: supply < demand: build more housing. demand > supply: build less housing If demand grows faster than supply then it just means that you need to build more housing. And let's be honest in a world with massive amounts of liquid capital but nothing worthwhile to invest into an infinite money sink that keeps increasing ROI the more you spend on it is actually almost magical and you know what? It's impossible in a world with physical constraints. You just haven't reached them yet.
imtringued 8y ago
Tech companies and rich investors don't take much space and you would be hard pressed to find homeowners who would go against their interest and prevent these potential homebuyers to move into the area.

rileymat2 8y ago

I am not sure some areas that are growing are ideal from a water usage perspective, but I thought density was very efficient and should be promoted.

dgudkov 8y ago
Density creates land scarcity which in turns gives a lot of power to landlords who collect the lion's share or economic benefits created by density. Density should come hand in hand with power-rebalancing measures, e.g. tax property hikes, more efficient zoning, and government-controlled rent, but practically it doesn't happen.
- epistasis 8y ago
  Density is the response to land scarcity that takes away power from landlords, not the other way around. When there's massive land scarcity, but density is not allowed, it gives landlords far far more power than if density were allowed. Land value taxation is one way to reduce speculative land use by landlords, but it's rarely used, unfortunately. And in California it would require overturning Prop 13, a hugely regressive tax policy that has been somehow falsely enshrined as helping the little guy out, when in reality it mostly helps landlords and speculative land hoarders.
  - taysic 8y ago
    Focusing jobs in one area reduces competition among landlords while fostering multiple job centers with amenities encourages competition including price competition
    - epistasis 8y ago
      What "focuses" jobs in one area though? Is it a conscious choice to place a job in a location, or is it the density of the people and the skills that allows the jobs to exist at all? The idea that jobs can be placed anywhere flies in the face of pretty much every single city's economic development efforts over the past few decades. It's not realistic, or reasonable. What can be placed anywhere is housing. The only reason that we don't have higher density is a small number of landowners lobbying to keep everything identical to the way that it was when they moved in, and when they moved in they had just massively changed the landscape from fruit groves to suburban sprawl. They said: change to allow me, but no more. And now they benefit massively by restricting density around them.
      - taysic 8y ago
        If you’re talking about Silicon Valley that was converted from fruit groves to sprawl and a job center then how was that the result of density? In terms of density it’s not much different to many areas. The focusing is done due to a whole host of reasons but certainly encouraging jobs to spread out is not a bad idea for a number of reasons - including having options and livability
      - DataWorker 8y ago
        People usually cite network effects, or more simply the VC and big money people live in sf and nyc and prefer their workers live there too. How many billionaires live in Boise?
  - dgudkov 8y ago
    >Density is the response to land scarcity that takes away power from landlords, not the other way around. "Density" in my comment is population density, not construction density. Unfortunately, construction density (and height) is restricted by zoning and all kinds of bylaws. Most residential areas in North America allow only single-family houses and prohibit multi-tenant buildings with 3-4 floors or more. Landlords benefit from such zoning rules immensely, because they drive land price up.

jogjayr 8y ago

> There should be incentives for companies to move away from places like SV and NY. There are already tons of incentives and tax breaks like this for companies. Just for a recent example, see Amazon HQ2. Companies also have the added incentive of lower labor costs. It's clearly not enough yet.

maxxxxx 8y ago
"Just for a recent example, see Amazon HQ2." That's a good example actually. It's hard to understand that NYC was offering subsidies to Amazon. NYC doesn't really need more people or more companies.
- AnthonyMouse 8y ago
  It's not a matter of need. If you get more companies there is more local demand for labor, which means more jobs and higher wages, which means more tax revenue. Giving a company that will bring in a billion dollars in new tax revenue half that much in incentives still nets you half a billion dollars. The real issue is that this is true of everything. Cities compete with each other, but major metro hubs have such an intrinsic advantage that it allows them to suffer a large amount of corruption and waste and still not be uncompetitive. Until you're negotiating with a company large enough to bring with it its own economies of scale, and then it does make you uncompetitive, because Amazon could build HQ2 in the middle of the desert and a town would spring up around it regardless, in a way that a guy operating a food truck absolutely could not. They don't actually want to do that because NYC still has its intrinsic advantages, but if it also has very high taxes which then go to waste and not toward providing useful services, the benefits have to be weighed against the costs. (And realistically there are also better alternatives like Virginia rather than literally the middle of the desert.) Then the city becomes concerned that their high taxes and low efficiency are costing them Amazon so they come up with some kind of carve outs which they would need to keep Amazon but not the food truck or the real estate developer or doctor's office, and so it applies only to huge corporations and not to everybody else. Which then creates an unfair advantage for major companies with that kind of leverage, and then they start eating everything and driving out small and medium businesses who can't compete when they're the only ones paying high taxes. And that's what makes people upset. But you're never going to get Amazon if your offer is to tax them heavily and then waste the money. The way to be competitive on a level playing field is to cut out the waste in general so that nobody has to pay high taxes for low benefits.

sanderjd 8y ago

I'm really curious about the pros and cons here. Neither way seems obviously better than the other. Why is concentration worse than distribution? Why is distribution better?

ip26 8y ago
Concentration begetting more concentration combined with an unwillingness (don't underestimate SV's ability to dig in its heels) to develop leads to a real estate black hole for dollars, where an ever increasing portion of wealth is diverted to the competition for a place to live.
- firethief 8y ago
  That's not tying up wealth, it's tying up money, and I don't see how that is even one of the many problems with the situation in e.g. SF.
deleted 8y ago
[deleted]

ironmagma 8y ago

Cities are popular because they are relatively efficient. You can build more towns and suburbs but they will be underserved because of the many pipelines a state has to manage that cities will receive priority for — road maintenance, DMVs, shipping hubs. If you live in a town and need any of these, you might have to travel a long way just to get your needs met.

ip26 8y ago
Yes, but we have 4,000 cities in the US, yet only something like 1 first class tech hub and two second class tech hubs. If we veer into market theory for a moment, it's better for everyone if there are many cities that are competitive places for technology companies.
- throwaway34241 8y ago
  Why is it better for everyone? I imagine we have the current hubs because with a more liquid job market it makes finding jobs and employees easier. It's probably also good for investment since having many potential acquirers nearby increases the chance of a positive exit. I guess it's kind of an insurance against terrible (local) government policies if people move from city to city when one of them screws up. That doesn't sound like a terribly efficient system though.

snidane 8y ago

This is an instance of Jevon's paradox. The more housing you build to meet housing need of people then even more people will come in creating even larger demand for housing. https://en.m.wikipedia.org/wiki/Jevons_paradox https://en.m.wikipedia.org/wiki/Jevons_paradox

epistasis 8y ago
Do you have any sort of academic citation that Jevon's paradox applies in any way to housing, or is this just an intuition?
imtringued 8y ago
Jevons paradox is a nice example of bikeshedding. It doesn't change the decision making process at all because it looks like this: supply < demand: build more housing. demand > supply: build less housing If demand grows faster than supply then it just means that you need to build more housing. And let's be honest in a world with massive amounts of liquid capital but nothing worthwhile to invest into an infinite money sink that keeps increasing ROI the more you spend on it is actually almost magical and you know what? It's impossible in a world with physical constraints. You just haven't reached them yet.

imtringued 8y ago

Tech companies and rich investors don't take much space and you would be hard pressed to find homeowners who would go against their interest and prevent these potential homebuyers to move into the area.