4 ms·

I think the problem is that housing is exclusionary and people want to live in some locations rather than others. Typical housing doesn't scale well. This creat

I think the problem is that housing is exclusionary and people want to live in some locations rather than others. Typical housing doesn't scale well. This creates an effect where people are effectively bidding each other up on the price of housing, because the winner gets to live in that location and everyone else doesn't. This means that the cost of housing scales with how wealthy the people who want to live in that area are. A 2000 sqft house in the middle of nowhere in Wyoming might cost $200k. In SF you'll get far less for the same money. People want to be in SF, because there's more to do, but also because the better paying jobs are there. This uplifts the entire area, but also makes things like housing more expensive. In a lot of ways I think the cost of housing is dependent on the housing density vs job density of the area. If job density is much higher than the housing density, then the price of housing goes up by a lot. I think a similar idea can be used to explain the high costs of higher education. Every university has a limited number of spots, so people are willing to pay more and more to get a spot. Loans mean that everyone's capable of paying the money to the university, regardless what they charge.

vladvasiliu 6y ago
There is an exclusionary side to housing. But there's also a stock component to it. If I can buy the same iPhone as you it's because Apple is willing to build more iPhones to follow demand. Cities don't seem to follow housing demand (for a reason or another) hence the shortage and the high prices. > A 2000 sqft house in the middle of nowhere in Wyoming might cost $200k. In SF you'll get far less for the same money. People want to be in SF, because there's more to do, but also because the better paying jobs are there. This uplifts the entire area, but also makes things like housing more expensive. Of course people follow the jobs and other things coming from there being many people around. Hence why the house in the middle of nowhere is cheap, no one wants to live there. It's a self-reinforcing feedback loop. But would less people want to live in SF if somehow tomorrow there would be X% more housing units available on the market such that the price would be drastically lower? Of course, there being more housing would have to have other consequences which could (and probably would) effect the desirability of the city. I'm not familiar with SF, but for example in Paris that would probably mean replacing older buildings with newer, taller ones. That would of course change many things, the first of which is its "visual character". Which would make it look more like say NY (because of the tall buildings) than it currently does. People would try to prevent that (if for no other reason than because people are sometimes against change) but, in the aggregate, would that bring less people here? I doubt it. However, that would probably create more jobs in the city, which would bring in even more people, and so on. After all, today's big cities all started with a bunch of shacks, right? My hope, as has been discussed in other threads, is that with remote work gaining traction, at least some people will leave the cities. I know many people who would like that because they don't particularly enjoy city life. This would allow, of course, some other people to come in who couldn't afford it but wanted it, but maybe, in aggregate, city population would be lower. I, for example, would gladly go live further out in the suburbs if I only had to come in the office once in a while (say no more than once, maybe twice a week).
- BrandoElFollito 6y ago
  This is one of the reasons companies should be forced to decentralize (as it was the case in Spain, though it was not forced). I am glad to see that some companies moved south of Paris (Thalès, Bouygues, Dassault Systèmes,...) and people working there and living around our in Versailles can bike to the office. If we managed to spread companies in the country, we would have less concentration of elitarism and pepole would live a more quiet life.
  - bingbong70 6y ago
    This would've naturally occurred if the US telecom industry followed through on the rural high speed rollouts they promised for decades.
NalNezumi 6y ago
>In a lot of ways I think the cost of housing is dependent on the housing density vs job density of the area. If job density is much higher than the housing density, then the price of housing goes up by a lot. The cost of housing is dependent on job density * quality only to the point what people are able to pay, and then rest is what they are willing to pay. A lot of people buy/rent slightly above their means if they are willing to pay it. Housing price is like an auction house so willing to pay is a bigger factor than able to. Artificially reducing number of available houses comes in a lot of reasons/pretense but in the end its just a result of people seeing/forced to see their house as an asset; You acquired your house at price X at auction. A local urban developer want to build 100 more units close to you, from prediction of demand and would be profitable at price X (or even <X), so you passively/actively work against that proposal, tell the developer that he can build up to 90 more units, so price of your estate increase X+N. Now the next 90 buyers that bought the house have a reason to keep the price of estate above X+N, tell the developer that he can only make 80 units. Rinse and repeat.

vladvasiliu 6y ago

There is an exclusionary side to housing. But there's also a stock component to it. If I can buy the same iPhone as you it's because Apple is willing to build more iPhones to follow demand. Cities don't seem to follow housing demand (for a reason or another) hence the shortage and the high prices. > A 2000 sqft house in the middle of nowhere in Wyoming might cost $200k. In SF you'll get far less for the same money. People want to be in SF, because there's more to do, but also because the better paying jobs are there. This uplifts the entire area, but also makes things like housing more expensive. Of course people follow the jobs and other things coming from there being many people around. Hence why the house in the middle of nowhere is cheap, no one wants to live there. It's a self-reinforcing feedback loop. But would less people want to live in SF if somehow tomorrow there would be X% more housing units available on the market such that the price would be drastically lower? Of course, there being more housing would have to have other consequences which could (and probably would) effect the desirability of the city. I'm not familiar with SF, but for example in Paris that would probably mean replacing older buildings with newer, taller ones. That would of course change many things, the first of which is its "visual character". Which would make it look more like say NY (because of the tall buildings) than it currently does. People would try to prevent that (if for no other reason than because people are sometimes against change) but, in the aggregate, would that bring less people here? I doubt it. However, that would probably create more jobs in the city, which would bring in even more people, and so on. After all, today's big cities all started with a bunch of shacks, right? My hope, as has been discussed in other threads, is that with remote work gaining traction, at least some people will leave the cities. I know many people who would like that because they don't particularly enjoy city life. This would allow, of course, some other people to come in who couldn't afford it but wanted it, but maybe, in aggregate, city population would be lower. I, for example, would gladly go live further out in the suburbs if I only had to come in the office once in a while (say no more than once, maybe twice a week).

BrandoElFollito 6y ago
This is one of the reasons companies should be forced to decentralize (as it was the case in Spain, though it was not forced). I am glad to see that some companies moved south of Paris (Thalès, Bouygues, Dassault Systèmes,...) and people working there and living around our in Versailles can bike to the office. If we managed to spread companies in the country, we would have less concentration of elitarism and pepole would live a more quiet life.
- bingbong70 6y ago
  This would've naturally occurred if the US telecom industry followed through on the rural high speed rollouts they promised for decades.

NalNezumi 6y ago

>In a lot of ways I think the cost of housing is dependent on the housing density vs job density of the area. If job density is much higher than the housing density, then the price of housing goes up by a lot. The cost of housing is dependent on job density * quality only to the point what people are able to pay, and then rest is what they are willing to pay. A lot of people buy/rent slightly above their means if they are willing to pay it. Housing price is like an auction house so willing to pay is a bigger factor than able to. Artificially reducing number of available houses comes in a lot of reasons/pretense but in the end its just a result of people seeing/forced to see their house as an asset; You acquired your house at price X at auction. A local urban developer want to build 100 more units close to you, from prediction of demand and would be profitable at price X (or even <X), so you passively/actively work against that proposal, tell the developer that he can build up to 90 more units, so price of your estate increase X+N. Now the next 90 buyers that bought the house have a reason to keep the price of estate above X+N, tell the developer that he can only make 80 units. Rinse and repeat.