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Real galaxy brain take there. “Housing prices have always fluctuated, therefore these fluctuations are unrelated to this other highly correlated factor”. Not t

Real galaxy brain take there. “Housing prices have always fluctuated, therefore these fluctuations are unrelated to this other highly correlated factor”. Not that I disagree much with the substance of pointing out Prop 13, etc, but you should also definitely blame tech for loading an entire industry into a metro area.

knolax 7y ago
Sounds like the rhetoric against anthropogenic climate change.
raldi 7y ago
Traditionally, metro areas would have not just one, but many industries (e.g., NYC with banking, fashion, journalism, law, or Tokyo which is the capital of most of Japan's industries, and the national capital too), but they would also allow housing to be built, and that did indeed avoid the kinds of housing crisis we're seeing in cities today that are practicing exclusionary zoning.
helen___keller 7y ago
> definitely blame tech for loading an entire industry into a metro area Supply and demand gonna supply and demand. It's weird to "blame tech" for existing and injecting a massive amount of jobs into our economy; there's no metro region that could have handled that growth without the same effect on price, and there is no singular entity responsible for concentrating tech into a single city instead of distributed more evenly. Maybe Houston could have come close to handling it without massive price increases, but I'm guessing Houston is too spread out to enjoy strong network effects, and probably would have become gridlocked with traffic to boot. New York could have "handled" it, from a raw housing & transit perspective, but the region is already pricy and all of Manhattan (which has the best access to jobs and transit across the metropolitan region) has long since gentrified, so I don't know if that really counts. (Of course, part of the reason no region could have handled it is precisely because of how Americans approach zoning and growth. Like our politics, our cities and neighborhoods seem to be static until there's an absolutely overwhelming force against the status quo, and even then sometimes that's not enough to change anything)
- ummonk 7y ago
  New York is significantly more affordable than the Bay Area though. Transit into manhattan from affordable places in NYC and New Jersey is quite quick, in contrast to the Bay Area where any place within reasonable commute time of SF or SV is just as expensive.
- mrep 7y ago
  I'm biased since I grew up in Chicago, but I think Chicago could have handled it fine with the endless farmland to develop with housing especially if the companies put their offices in high rises downtown as Chicago has double decker trains that go from the suburbs to downtown [0]. We also love high rise architecture so there are plenty of high rises to live in downtown if you want to. [0]: https://en.wikipedia.org/wiki/Metra#/media/File:Metra-System.png https://en.wikipedia.org/wiki/Metra#/media/File:Metra-System...
  - helen___keller 7y ago
    Growth only happens upwards or outwards. Your post seems to suggest that Chicago still has both available, which is (pleasantly) surprising to me as I was under the impression that every major american city had hit the limit on outward growth (usually because the roads are clogged by traffic and there's no political will to build more trains, so nobody wants more farmland developed).
shuckles 7y ago
Log-adjusted, rents were growing faster in the 80s than anytime after dot-com: https://fred.stlouisfed.org/series/CUURA422SEHA https://fred.stlouisfed.org/series/CUURA422SEHA
munificent 7y ago
> blame tech It confuses the issue to anthropomorphize an industry category. I don't think it's fair to blame rank-and-file tech workers. In today's scary economy, you can't blame anyone for entering a growth industry and taking a good job that's offered. Who wouldn't want a great salary, good benefits, a safe comfortable workplace, and a stable work-life balance? The more interesting question is why are there so many tech jobs and why do they pay so well? Facebook had 35,587 full-time employees in 2018. What the hell are all of those people doing that Facebook can pay them so much? My hunch is that this is a consequence of perilously low corporate taxes. Giant companies simply have more money than they know what to do with, so they are throwing it any place that seems reasonable. In particular, they're trying to build bigger and bigger moats to outcompete the other tech giants. The biggest moat of all is skilled humans since it takes so long to increas the supply of them. So they're throwing money at tech workers mostly to keep other companies from scooping them up. Being essentially on retainer is great for the people who luck into that field, but it seriously screws up the economies of the few cities where it happens. Other job categories that aren't dominated by huge companies competing for each other's skilled workers don't end up driving up wages to the same degree so everyone else gets priced out. I think the real answer is to start taxing these companies appropriately. You can look at their current behavior as wealth distribution that only trickles down to tech employees. If the wealth is going to be distributed, I'd rather some of it go to teachers, nurses, sanitation workers, and waiters too.
- sujNansnam 7y ago
  If a company is spending some revenue as wages, they aren’t paying taxes on that revenue at all.
  - shuckles 7y ago
    Only on wages for employees classified as R&D.
  - tick_tock_tick 7y ago
    That money is taxed as income on the employee's side and they still pay payroll taxes.
asdff 7y ago
All through human history up until the last couple of decades, housing has followed the jobs. When they built the great pyramids they build an entire city for the workers. You build an office building in manhattan in 1860, and what do you know an apartment building of similar size is going up in the next lot. You build a factory then you build the town; that's how it's always been done. What we are seeing is cities eager for job growth and commercial business to call their city home, but the other half of the equation is given no thought. Upzoning residential areas to match commercial growth is not being done. Even when tech companies promise to build some housing with their new office space, it's never 1:1, so it too is a net strain. When looking at the problem in those simple terms, it really seems like insidious profiteering on the local government's part, considering LA councilmen all own at least 1 property and therefore all stand to benefit from housing price surges.

knolax 7y ago

Sounds like the rhetoric against anthropogenic climate change.

raldi 7y ago

Traditionally, metro areas would have not just one, but many industries (e.g., NYC with banking, fashion, journalism, law, or Tokyo which is the capital of most of Japan's industries, and the national capital too), but they would also allow housing to be built, and that did indeed avoid the kinds of housing crisis we're seeing in cities today that are practicing exclusionary zoning.

helen___keller 7y ago

> definitely blame tech for loading an entire industry into a metro area Supply and demand gonna supply and demand. It's weird to "blame tech" for existing and injecting a massive amount of jobs into our economy; there's no metro region that could have handled that growth without the same effect on price, and there is no singular entity responsible for concentrating tech into a single city instead of distributed more evenly. Maybe Houston could have come close to handling it without massive price increases, but I'm guessing Houston is too spread out to enjoy strong network effects, and probably would have become gridlocked with traffic to boot. New York could have "handled" it, from a raw housing & transit perspective, but the region is already pricy and all of Manhattan (which has the best access to jobs and transit across the metropolitan region) has long since gentrified, so I don't know if that really counts. (Of course, part of the reason no region could have handled it is precisely because of how Americans approach zoning and growth. Like our politics, our cities and neighborhoods seem to be static until there's an absolutely overwhelming force against the status quo, and even then sometimes that's not enough to change anything)

ummonk 7y ago
New York is significantly more affordable than the Bay Area though. Transit into manhattan from affordable places in NYC and New Jersey is quite quick, in contrast to the Bay Area where any place within reasonable commute time of SF or SV is just as expensive.
mrep 7y ago
I'm biased since I grew up in Chicago, but I think Chicago could have handled it fine with the endless farmland to develop with housing especially if the companies put their offices in high rises downtown as Chicago has double decker trains that go from the suburbs to downtown [0]. We also love high rise architecture so there are plenty of high rises to live in downtown if you want to. [0]: https://en.wikipedia.org/wiki/Metra#/media/File:Metra-System.png https://en.wikipedia.org/wiki/Metra#/media/File:Metra-System...
- helen___keller 7y ago
  Growth only happens upwards or outwards. Your post seems to suggest that Chicago still has both available, which is (pleasantly) surprising to me as I was under the impression that every major american city had hit the limit on outward growth (usually because the roads are clogged by traffic and there's no political will to build more trains, so nobody wants more farmland developed).

shuckles 7y ago

Log-adjusted, rents were growing faster in the 80s than anytime after dot-com: https://fred.stlouisfed.org/series/CUURA422SEHA https://fred.stlouisfed.org/series/CUURA422SEHA

munificent 7y ago

> blame tech It confuses the issue to anthropomorphize an industry category. I don't think it's fair to blame rank-and-file tech workers. In today's scary economy, you can't blame anyone for entering a growth industry and taking a good job that's offered. Who wouldn't want a great salary, good benefits, a safe comfortable workplace, and a stable work-life balance? The more interesting question is why are there so many tech jobs and why do they pay so well? Facebook had 35,587 full-time employees in 2018. What the hell are all of those people doing that Facebook can pay them so much? My hunch is that this is a consequence of perilously low corporate taxes. Giant companies simply have more money than they know what to do with, so they are throwing it any place that seems reasonable. In particular, they're trying to build bigger and bigger moats to outcompete the other tech giants. The biggest moat of all is skilled humans since it takes so long to increas the supply of them. So they're throwing money at tech workers mostly to keep other companies from scooping them up. Being essentially on retainer is great for the people who luck into that field, but it seriously screws up the economies of the few cities where it happens. Other job categories that aren't dominated by huge companies competing for each other's skilled workers don't end up driving up wages to the same degree so everyone else gets priced out. I think the real answer is to start taxing these companies appropriately. You can look at their current behavior as wealth distribution that only trickles down to tech employees. If the wealth is going to be distributed, I'd rather some of it go to teachers, nurses, sanitation workers, and waiters too.

sujNansnam 7y ago
If a company is spending some revenue as wages, they aren’t paying taxes on that revenue at all.
- shuckles 7y ago
  Only on wages for employees classified as R&D.
- tick_tock_tick 7y ago
  That money is taxed as income on the employee's side and they still pay payroll taxes.

asdff 7y ago

All through human history up until the last couple of decades, housing has followed the jobs. When they built the great pyramids they build an entire city for the workers. You build an office building in manhattan in 1860, and what do you know an apartment building of similar size is going up in the next lot. You build a factory then you build the town; that's how it's always been done. What we are seeing is cities eager for job growth and commercial business to call their city home, but the other half of the equation is given no thought. Upzoning residential areas to match commercial growth is not being done. Even when tech companies promise to build some housing with their new office space, it's never 1:1, so it too is a net strain. When looking at the problem in those simple terms, it really seems like insidious profiteering on the local government's part, considering LA councilmen all own at least 1 property and therefore all stand to benefit from housing price surges.