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While the article is kind of slog in the beginning to establish its context, this struck me as especially true/relevant: “When innovative companies begin makin

While the article is kind of slog in the beginning to establish its context, this struck me as especially true/relevant: “When innovative companies begin making decent profits, landlords raise the rents to adjust for the new ability to pay. As a result, these additional wages are neither reinvested, nor reflected in the disposable income of employees. This is the dynamic behind the mystery of stagnant wages. When workers in a particularly well-paid sector begin pouring into a city, landlords likewise raise the rent to absorb these incomes. It isn’t gentrification, but absorption through monopoly power.” The housing affordability crisis is really a crisis of land owner cartels, especially in major urban centers. Short of some massive investment in public housing, there’s not much that can be done to course correct.

ttul 7y ago
Public investment is surely one option. Another is appropriate taxation. Vancouver’s residential property taxes are amongst the world’s lowest in terms of total tax take vs properly value. Property taxes should be massively higher and income taxes substantially lower. Too much of the tax burden is on the middle income worker and far too little on the wealthy landowner.
- ggcdn 7y ago
  Wouldn't increased property taxes, combined with increased ability of renter's to pay, cause rents to increase?
  - stale2002 7y ago
    No, that doesn't make any sense. If workers are always only paying the amount that they are able to pay, no more and no less, then that means that any increase in salary, will cause rents to increase. BUT, it also means that the opposite is true. If salaries decrease, such as because if a tax, then rents will also equally decrease. Or in other words, the tax is purely borne by the landlord. So it makes perfect sense to tax the landlord in that case.
    - mlyle 7y ago
      In practice there is actually some elasticity.
    - AdrianB1 7y ago
      Except that the landlord recuperates (passes) the taxes via the rent, so the renter pays it all. It makes no sense to tax the landlord.
      - stale2002 7y ago
        You can't have it both ways though, is my point. Either the taxes are passed through to the renter, or the price of rent is determined by a renter's ability to pay. These are conflicting statements that both can't be true. If renters are already paying the most that they can, and increases in wages only causes rents to go up, then it is not possible for them to pay that extra tax.
        AdrianB1 7y ago
        In most cases both can be true; "renter's ability to pay" is usually not the limit of what they can pay, but what they are willing to pay. If you put a tax that would increase the rent 10%, some people will pay (cut on other expenses), some will move out and someone else will move in and pay. At the end of the day, any tax is passed to the consumer, so it is never helping the consumer.
        stale2002 7y ago
        No, it can't both be true. In economics, if a consumer always pays as much as they are able to, IE, it is a constant willingness to pay, then this is called perfectly elastic demand. The situation of taxes being passed in to consumers, would only happen if consumer demand is perfectly inelastic. It is literally the opposite situation. Demand can't both be perfectly elastic and also perfectly inelastic at the same time. They are opposites!
- all2 7y ago
  From a pragmatic standpoint, property tax _is_ rent. I make this comparison because the consequences of not paying taxes is the same as not paying rent. If there is property tax, only the government owns the property and rents it to citizens.
  - kevin_thibedeau 7y ago
    Property tax "rent" in reinvested in the community. Real rent goes into a portfolio.
    - novok 7y ago
      So the scope of the investment is the difference then?
      - smallnamespace 7y ago
        We're mixing up the senses of 'investment'. Taxes are redistributed (they end up back in taxpayers' pockets), rents accumulate to property owners.
        all2 7y ago
        > Taxes are redistributed ... No. Taxes are spent on goods an services, the same as any property owner spends rent income. The outcomes of expenditures on each part is different (sometimes a plate tax is actually applied to road maintenance). But the concept of a slush-fund and no (or few) legal guardrails for expenditures means your tax dollars probably land in a pet project somewhere, or are consumed in the financial friction of government bureaucracy.
  - scythe 7y ago
    If you make your philosophy austere and instrumentalist enough, there is no ownership, only physical control. And under any Weberian government there is only one legitimate owner of anything. Luckily most governments and societies today respect a sort of legal Platonism where the law as an ideal both constrains the government and the owners of property even though the government is tasked with implementing it. It might not be empiricist enough for some people but it seems to play nicely with human psychology’s inclination towards the mystical. And of all the cultural fantasies we might share, we could definitely do a lot worse than human rights and the rule of law.
- knowaveragejoe 7y ago
  Replacing existing taxes on real estate with a Land Value Tax is probably the best way, tax-wise, to address the situation: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
  - snagglegaggle 7y ago
    That just replaces serfdom to a landowner with serfdom (or sharecroppage) to another landowner, the government. Problematic with property taxes is you can not simply exist, you must be turning some profit.
    - cperciva 7y ago
      If you're renting, you can't simply exist either. In fact, you have to make enough money to pay your rent and pay the income taxes on the income which is paying your rent. Simple equity demands that property taxes should at a minimum be equal to income taxes on the rental cost of equivalent property.
      - snagglegaggle 7y ago
        I don't see your point. I can usually choose not to rent. Income taxes I think are perfectly acceptable: a limited nonrecurring percentage is taken, ostensibly as compensation for society's contribution to your ability to earn an income. Usually the way income is received means you are never able to not pay. But there are niggles. Under most tax systems value you produce, even for own consumption, must be assessed and taxes paid on it. This is problematic if you take a crop for subsistence farming.
        amiga_500 7y ago
        You using land has an opportunity cost for everyone else. You should pay compensation for this. Income tax is not a good idea. You add value, why do we want to discourage you ?
- AdrianB1 7y ago
  Taxation is a passive measure and these never solved problems, just kept it under control for a while. I would like to read about solutions, not the catchall "tax them". Well, tax them and then what? New buildings will grow out of the trees? Lower prices will come by train?
mieseratte 7y ago
That’s not a cartel, that’s a free market. It’s not as if two or three landlords run the show.
- claudeganon 7y ago
  If you bother to read the article, it makes heavy reference to Adam Smith’s opposition to landlords and their rent-seeking because of the heavy drag they place on markets. They capture and enclose too much capital that could otherwise be used for dynamic and productive investment. He was as right then as he is now.
  - solidsnack9000 7y ago
    That does not describe a cartel -- it describes predatory pricing.
    - hn_throwaway_99 7y ago
      The cartel comes from the fact of how much wealthy landlords control local governments, who then make it onerously difficult to build the amount of housing that is actually needed. I don't know if this is the case in Vancouver but it is absolutely the case in California, with its absurd cases of a run-down laundry mat being declared a "historical property" to block redevelopment.
      - deleted 7y ago
        [deleted]
    - scarejunba 7y ago
      How is that predatory pricing? Landlords aren't driving alternative landlords out of business by dropping their prices too low for others with shallower pockets to compete.
      - solidsnack9000 7y ago
rdiddly 7y ago
Thank you for persevering, extracting the nugget, and also validating my notion that this was a pretty bad opening sentence and paragraph.
yborg 7y ago
I hope the author's technical thinking is a lot more organized than what was represented in this mass of meandering confusion, that this represents the mind of a startup CTO would cause me as a potential investor to run the hell away. The essay falls on its face with its central thesis that 2010's Canada = 1970's Soviet Union, which beyond being absurd on its face the author fails to make any case for other than observing, correctly, that bureaucracy exists in Canada and that individuals that are established in a social hierarchy take advantage of it. The underlying motivation for this screed seems to boil down to 1) rents are too high in Vancouver, and 2) firms don't want to pay techies enough in Vancouver. This is then extrapolated linearly to mean 'Canada'. As for the observation on the housing situation, this is recognized generally as a problem in many markets, but his actual argument here is that these high rents thus smother "wealth creation". This may be true in Vancouver, but doesn't seem to be true in other areas like the Valley or NYC, which remain hotbeds of economic activity. Vancouver's specific problem seems to be that the Soviet leadership in British Columbia has been unable to curb the very capitalist problem of money laundering profits from the People's Republic of China into Canadian real estate.
- throwaway87378 7y ago
  > Vancouver's specific problem seems to be that the Soviet leadership in British Columbia has been unable to curb the very capitalist problem of money laundering profits from the People's Republic of China into Canadian real estate. It's not just money laundering, but an entire "industry" of investment and tax fraud schemes: https://www.theglobeandmail.com/real-estate/vancouver/out-of-the-shadows/article31802994/ https://www.theglobeandmail.com/real-estate/vancouver/out-of...
- Mikeb85 7y ago
  A lot of these issues describe Calgary (where I'm from), but we have the advantage of near limitless land to develop (everything north, east and south of the city is basically flat farmland, not even particularly productive farmland at that) and the local oil industry's near collapse has caused rents in the city centre to plummet. 20 years ago this article could have described our city nearly perfectly but even today is pertinent. The biggest obstacles to development are still bureaucracy and cartels, but thankfully at least some of their power is reduced by the relatively poor economy and tons of space.
phkahler 7y ago
One idea is to limit the percentage of the purchase price that can be borrowed. That would reduce a lot of the longet term problems but would upset some short term.
- novok 7y ago
  It's already happened a couple of years ago canada wide, through income requirements to mortgage a place with ratios that are small for the market. To the point where a typical house requires $250k+ family incomes in a place where typical family incomes are one fourth to one half of that.
  - ahartmetz 7y ago
    Welcome to the everything bubble. It looks like it might deflate or burst soon.
wendyshu 7y ago
Land owners want to build higher density, increasing supply, lowering price. The government prevents high density, decreasing supply, increasing price.
- scythe 7y ago
  Only some land owners. Other land owners join organizations like the National Association of Realtors (the second-largest U.S. lobbying spender only after the Chamber of Commerce itself) and try to influence the government to prevent high-density development.
deleted 7y ago
[deleted]
amiga_500 7y ago
Progress and Poverty. All as clear as day, over 100 years ago: https://www.amazon.co.uk/Progress-Poverty-Henry-George/dp/0911312986 https://www.amazon.co.uk/Progress-Poverty-Henry-George/dp/09... Any productivity gains flow into land. "Everybody works but the empty lot"
BurningFrog 7y ago
> The housing affordability crisis is really a crisis of land owner cartels If you consider the city counsel a land owner cartel, I guess I can agree. Cities where land owners can build what they want on their land does not have this problem. WHat a central government can do is ban most zoning, and make sure cities have incentives to welcome new inhabitants. In California Prop 13 make cities lose money when people live inside them, with predictable result.
drawkbox 7y ago
Solution: push remote work as a housing crisis solution. Remote work allows the people to place themselves in better, affordable places, while helping companies get the best from all over, rather than bound to a physical location. This works unless the companies/investors are doing a dual strategy of having real estate that they collect on while having their companies located in them that they are investing in. So a big part of the investment never leaves the building. I suspect a large part of Silicon Valley has a scheme like this, investors are usually real estate investors as well, they like people concentrated in areas and supply/demand to benefit them. The other bigger wage absorber right now is healthcare tied to a job. When healthcare goes up, wages are diverted into healthcare and healthcare and housing have teamed up to sap all wage growth in actual dollars in pockets of consumers,. 'Real compensation' or 'total compensation' doesn't go into cashflow/liquid assets at the individual level and means nothing to consumer spending power which needs to go to housing and life.
- roenxi 7y ago
  Remote work comes up against the harsh phenomena studied in economic geography. Even for knowledge work, there is a supply chain (in that case education, funding, knowledge sharing and adsorption of a certain type of culture). Once there is a supply chain, an industrial hub with a concentrated supply chain will outperform a disparate network of workers. At that point, market forces will optimise to use the industrial hub for everything. Workers who live in the industrial hub will have an advantage over those that do not.
  - drawkbox 7y ago
    That definitely plays a role. However, large companies have remote offices in different cities that rely on virtual communication to one another. This just moves the remote/virtual aspect further down the system to the individuals/teams. This push would also make supply chain work more virtual, the long tail of industry. It could work if they give massive tax breaks for remote workers, when it is a financial benefit and reward for pushing virtual workplaces, it will take hold. Remote work pushes also have immense impact on carbon production / climate change and making sure local communities thrive from higher salaries in more remote locations. This would allow for infrastructure to also be better more widely dispersed. There will always be hubs, but even large companies eventually get many hubs themselves and require virtual communication and remote capabilities. Company cities have been around forever, but remote working / virtual communication needs to be a priority and can help fix or improve many problems, not just housing costs. The mobile device generation will most likely bring about these remote working changes more widely.
meerita 7y ago
Is not landlords raising because of the decent profits, it is because more people want to live in one specific zone, increasing the demand, therefore, prices rises due por offer. It is not all landlords coordinately find out how the economy is going and acting in coordination to raise the prices.
narrator 7y ago
The housing affordability crisis is a crisis that rich people who have money to invest in companies want to live next to those companies in nice places and nice houses and keep the rest of the people who work at those places living further away. L.A is not a tech hub because the omnidirectional traffic kind of wrecks the whole thing, while the bridges in the bay area mean that the worker bees are rate limited in their ability to get in and out of the nice places in cars somewhat lessening the omnidirectional traffic nightmare for the rich people who invest in companies. Have you ever watched people trying to get to the east bay over the bay or peninsula bridges during rush hour? That's rate limiting for ya.
refurb 7y ago
That doesn’t make a lot of sense. Even if you’re talking about real wage stagnation, inflation (as measure to adjust for real wages) has been very low.
AdrianB1 7y ago
In some places, it is, but in many places is an exaggerated demand that cannot be easily satisfied. There are some hot sports on the planet where everyone wants to be there, of course that is not really possible and this leads to unhealthy demand.
timwaagh 7y ago
This piece is about so much more than the usual complaint against an increase in rent. It does not talk about public housing. Rather it points out the problem of bureaucracy that acts as a multiplier to the market power of landlords.
d1zzy 7y ago
I want to see graphs that support this assertion. Yes, I expect that in an area with higher income housing becomes more expensive, but so does everything else. Unless you can show data to prove this I really doubt that an increase of median income of X% results in rent increasing X%, I rather suspect the rents increase to some smaller percentage of that together with increase in other things. Rents are demand and offer, if the offer is perfectly static (no new housing/rental units are being made available) then if you have immigration in an area you should see rental pricing increasing according to that, rather than increase according to medium income. EDIT: As for solving this with public housing, that'll simply make it that the market price is not reflecting the demand, but it doesn't change the underlying issue that there is more demand than offer. Which means that there will be other ways to "fight" for those limited units (instead of market price it will be "favors" or lottery or "first come first served" which tends to favor existing residents over newer ones).

ttul 7y ago

Public investment is surely one option. Another is appropriate taxation. Vancouver’s residential property taxes are amongst the world’s lowest in terms of total tax take vs properly value. Property taxes should be massively higher and income taxes substantially lower. Too much of the tax burden is on the middle income worker and far too little on the wealthy landowner.

ggcdn 7y ago
Wouldn't increased property taxes, combined with increased ability of renter's to pay, cause rents to increase?
- stale2002 7y ago
  No, that doesn't make any sense. If workers are always only paying the amount that they are able to pay, no more and no less, then that means that any increase in salary, will cause rents to increase. BUT, it also means that the opposite is true. If salaries decrease, such as because if a tax, then rents will also equally decrease. Or in other words, the tax is purely borne by the landlord. So it makes perfect sense to tax the landlord in that case.
  - mlyle 7y ago
    In practice there is actually some elasticity.
  - AdrianB1 7y ago
    Except that the landlord recuperates (passes) the taxes via the rent, so the renter pays it all. It makes no sense to tax the landlord.
    - stale2002 7y ago
      You can't have it both ways though, is my point. Either the taxes are passed through to the renter, or the price of rent is determined by a renter's ability to pay. These are conflicting statements that both can't be true. If renters are already paying the most that they can, and increases in wages only causes rents to go up, then it is not possible for them to pay that extra tax.
      - AdrianB1 7y ago
        In most cases both can be true; "renter's ability to pay" is usually not the limit of what they can pay, but what they are willing to pay. If you put a tax that would increase the rent 10%, some people will pay (cut on other expenses), some will move out and someone else will move in and pay. At the end of the day, any tax is passed to the consumer, so it is never helping the consumer.
        stale2002 7y ago
        No, it can't both be true. In economics, if a consumer always pays as much as they are able to, IE, it is a constant willingness to pay, then this is called perfectly elastic demand. The situation of taxes being passed in to consumers, would only happen if consumer demand is perfectly inelastic. It is literally the opposite situation. Demand can't both be perfectly elastic and also perfectly inelastic at the same time. They are opposites!
all2 7y ago
From a pragmatic standpoint, property tax _is_ rent. I make this comparison because the consequences of not paying taxes is the same as not paying rent. If there is property tax, only the government owns the property and rents it to citizens.
- kevin_thibedeau 7y ago
  Property tax "rent" in reinvested in the community. Real rent goes into a portfolio.
  - novok 7y ago
    So the scope of the investment is the difference then?
    - smallnamespace 7y ago
      We're mixing up the senses of 'investment'. Taxes are redistributed (they end up back in taxpayers' pockets), rents accumulate to property owners.
      - all2 7y ago
        > Taxes are redistributed ... No. Taxes are spent on goods an services, the same as any property owner spends rent income. The outcomes of expenditures on each part is different (sometimes a plate tax is actually applied to road maintenance). But the concept of a slush-fund and no (or few) legal guardrails for expenditures means your tax dollars probably land in a pet project somewhere, or are consumed in the financial friction of government bureaucracy.
- scythe 7y ago
  If you make your philosophy austere and instrumentalist enough, there is no ownership, only physical control. And under any Weberian government there is only one legitimate owner of anything. Luckily most governments and societies today respect a sort of legal Platonism where the law as an ideal both constrains the government and the owners of property even though the government is tasked with implementing it. It might not be empiricist enough for some people but it seems to play nicely with human psychology’s inclination towards the mystical. And of all the cultural fantasies we might share, we could definitely do a lot worse than human rights and the rule of law.
knowaveragejoe 7y ago
Replacing existing taxes on real estate with a Land Value Tax is probably the best way, tax-wise, to address the situation: https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
- snagglegaggle 7y ago
  That just replaces serfdom to a landowner with serfdom (or sharecroppage) to another landowner, the government. Problematic with property taxes is you can not simply exist, you must be turning some profit.
  - cperciva 7y ago
    If you're renting, you can't simply exist either. In fact, you have to make enough money to pay your rent and pay the income taxes on the income which is paying your rent. Simple equity demands that property taxes should at a minimum be equal to income taxes on the rental cost of equivalent property.
    - snagglegaggle 7y ago
      I don't see your point. I can usually choose not to rent. Income taxes I think are perfectly acceptable: a limited nonrecurring percentage is taken, ostensibly as compensation for society's contribution to your ability to earn an income. Usually the way income is received means you are never able to not pay. But there are niggles. Under most tax systems value you produce, even for own consumption, must be assessed and taxes paid on it. This is problematic if you take a crop for subsistence farming.
      - amiga_500 7y ago
        You using land has an opportunity cost for everyone else. You should pay compensation for this. Income tax is not a good idea. You add value, why do we want to discourage you ?
AdrianB1 7y ago
Taxation is a passive measure and these never solved problems, just kept it under control for a while. I would like to read about solutions, not the catchall "tax them". Well, tax them and then what? New buildings will grow out of the trees? Lower prices will come by train?

mieseratte 7y ago

That’s not a cartel, that’s a free market. It’s not as if two or three landlords run the show.

claudeganon 7y ago
If you bother to read the article, it makes heavy reference to Adam Smith’s opposition to landlords and their rent-seeking because of the heavy drag they place on markets. They capture and enclose too much capital that could otherwise be used for dynamic and productive investment. He was as right then as he is now.
- solidsnack9000 7y ago
  That does not describe a cartel -- it describes predatory pricing.
  - hn_throwaway_99 7y ago
    The cartel comes from the fact of how much wealthy landlords control local governments, who then make it onerously difficult to build the amount of housing that is actually needed. I don't know if this is the case in Vancouver but it is absolutely the case in California, with its absurd cases of a run-down laundry mat being declared a "historical property" to block redevelopment.
    - deleted 7y ago
      [deleted]
  - scarejunba 7y ago
    How is that predatory pricing? Landlords aren't driving alternative landlords out of business by dropping their prices too low for others with shallower pockets to compete.
    - solidsnack9000 7y ago

rdiddly 7y ago

Thank you for persevering, extracting the nugget, and also validating my notion that this was a pretty bad opening sentence and paragraph.

yborg 7y ago

I hope the author's technical thinking is a lot more organized than what was represented in this mass of meandering confusion, that this represents the mind of a startup CTO would cause me as a potential investor to run the hell away. The essay falls on its face with its central thesis that 2010's Canada = 1970's Soviet Union, which beyond being absurd on its face the author fails to make any case for other than observing, correctly, that bureaucracy exists in Canada and that individuals that are established in a social hierarchy take advantage of it. The underlying motivation for this screed seems to boil down to 1) rents are too high in Vancouver, and 2) firms don't want to pay techies enough in Vancouver. This is then extrapolated linearly to mean 'Canada'. As for the observation on the housing situation, this is recognized generally as a problem in many markets, but his actual argument here is that these high rents thus smother "wealth creation". This may be true in Vancouver, but doesn't seem to be true in other areas like the Valley or NYC, which remain hotbeds of economic activity. Vancouver's specific problem seems to be that the Soviet leadership in British Columbia has been unable to curb the very capitalist problem of money laundering profits from the People's Republic of China into Canadian real estate.

throwaway87378 7y ago
> Vancouver's specific problem seems to be that the Soviet leadership in British Columbia has been unable to curb the very capitalist problem of money laundering profits from the People's Republic of China into Canadian real estate. It's not just money laundering, but an entire "industry" of investment and tax fraud schemes: https://www.theglobeandmail.com/real-estate/vancouver/out-of-the-shadows/article31802994/ https://www.theglobeandmail.com/real-estate/vancouver/out-of...
Mikeb85 7y ago
A lot of these issues describe Calgary (where I'm from), but we have the advantage of near limitless land to develop (everything north, east and south of the city is basically flat farmland, not even particularly productive farmland at that) and the local oil industry's near collapse has caused rents in the city centre to plummet. 20 years ago this article could have described our city nearly perfectly but even today is pertinent. The biggest obstacles to development are still bureaucracy and cartels, but thankfully at least some of their power is reduced by the relatively poor economy and tons of space.

phkahler 7y ago

One idea is to limit the percentage of the purchase price that can be borrowed. That would reduce a lot of the longet term problems but would upset some short term.

novok 7y ago
It's already happened a couple of years ago canada wide, through income requirements to mortgage a place with ratios that are small for the market. To the point where a typical house requires $250k+ family incomes in a place where typical family incomes are one fourth to one half of that.
- ahartmetz 7y ago
  Welcome to the everything bubble. It looks like it might deflate or burst soon.

wendyshu 7y ago

Land owners want to build higher density, increasing supply, lowering price. The government prevents high density, decreasing supply, increasing price.

scythe 7y ago
Only some land owners. Other land owners join organizations like the National Association of Realtors (the second-largest U.S. lobbying spender only after the Chamber of Commerce itself) and try to influence the government to prevent high-density development.

deleted 7y ago

[deleted]

amiga_500 7y ago

Progress and Poverty. All as clear as day, over 100 years ago: https://www.amazon.co.uk/Progress-Poverty-Henry-George/dp/0911312986 https://www.amazon.co.uk/Progress-Poverty-Henry-George/dp/09... Any productivity gains flow into land. "Everybody works but the empty lot"

BurningFrog 7y ago

> The housing affordability crisis is really a crisis of land owner cartels If you consider the city counsel a land owner cartel, I guess I can agree. Cities where land owners can build what they want on their land does not have this problem. WHat a central government can do is ban most zoning, and make sure cities have incentives to welcome new inhabitants. In California Prop 13 make cities lose money when people live inside them, with predictable result.

drawkbox 7y ago

Solution: push remote work as a housing crisis solution. Remote work allows the people to place themselves in better, affordable places, while helping companies get the best from all over, rather than bound to a physical location. This works unless the companies/investors are doing a dual strategy of having real estate that they collect on while having their companies located in them that they are investing in. So a big part of the investment never leaves the building. I suspect a large part of Silicon Valley has a scheme like this, investors are usually real estate investors as well, they like people concentrated in areas and supply/demand to benefit them. The other bigger wage absorber right now is healthcare tied to a job. When healthcare goes up, wages are diverted into healthcare and healthcare and housing have teamed up to sap all wage growth in actual dollars in pockets of consumers,. 'Real compensation' or 'total compensation' doesn't go into cashflow/liquid assets at the individual level and means nothing to consumer spending power which needs to go to housing and life.

roenxi 7y ago
Remote work comes up against the harsh phenomena studied in economic geography. Even for knowledge work, there is a supply chain (in that case education, funding, knowledge sharing and adsorption of a certain type of culture). Once there is a supply chain, an industrial hub with a concentrated supply chain will outperform a disparate network of workers. At that point, market forces will optimise to use the industrial hub for everything. Workers who live in the industrial hub will have an advantage over those that do not.
- drawkbox 7y ago
  That definitely plays a role. However, large companies have remote offices in different cities that rely on virtual communication to one another. This just moves the remote/virtual aspect further down the system to the individuals/teams. This push would also make supply chain work more virtual, the long tail of industry. It could work if they give massive tax breaks for remote workers, when it is a financial benefit and reward for pushing virtual workplaces, it will take hold. Remote work pushes also have immense impact on carbon production / climate change and making sure local communities thrive from higher salaries in more remote locations. This would allow for infrastructure to also be better more widely dispersed. There will always be hubs, but even large companies eventually get many hubs themselves and require virtual communication and remote capabilities. Company cities have been around forever, but remote working / virtual communication needs to be a priority and can help fix or improve many problems, not just housing costs. The mobile device generation will most likely bring about these remote working changes more widely.

meerita 7y ago

Is not landlords raising because of the decent profits, it is because more people want to live in one specific zone, increasing the demand, therefore, prices rises due por offer. It is not all landlords coordinately find out how the economy is going and acting in coordination to raise the prices.

narrator 7y ago

The housing affordability crisis is a crisis that rich people who have money to invest in companies want to live next to those companies in nice places and nice houses and keep the rest of the people who work at those places living further away. L.A is not a tech hub because the omnidirectional traffic kind of wrecks the whole thing, while the bridges in the bay area mean that the worker bees are rate limited in their ability to get in and out of the nice places in cars somewhat lessening the omnidirectional traffic nightmare for the rich people who invest in companies. Have you ever watched people trying to get to the east bay over the bay or peninsula bridges during rush hour? That's rate limiting for ya.

refurb 7y ago

That doesn’t make a lot of sense. Even if you’re talking about real wage stagnation, inflation (as measure to adjust for real wages) has been very low.

AdrianB1 7y ago

In some places, it is, but in many places is an exaggerated demand that cannot be easily satisfied. There are some hot sports on the planet where everyone wants to be there, of course that is not really possible and this leads to unhealthy demand.

timwaagh 7y ago

This piece is about so much more than the usual complaint against an increase in rent. It does not talk about public housing. Rather it points out the problem of bureaucracy that acts as a multiplier to the market power of landlords.

d1zzy 7y ago

I want to see graphs that support this assertion. Yes, I expect that in an area with higher income housing becomes more expensive, but so does everything else. Unless you can show data to prove this I really doubt that an increase of median income of X% results in rent increasing X%, I rather suspect the rents increase to some smaller percentage of that together with increase in other things. Rents are demand and offer, if the offer is perfectly static (no new housing/rental units are being made available) then if you have immigration in an area you should see rental pricing increasing according to that, rather than increase according to medium income. EDIT: As for solving this with public housing, that'll simply make it that the market price is not reflecting the demand, but it doesn't change the underlying issue that there is more demand than offer. Which means that there will be other ways to "fight" for those limited units (instead of market price it will be "favors" or lottery or "first come first served" which tends to favor existing residents over newer ones).