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The central problem with this model is that any metro that graduates to "tech hub" becomes unlivable in short order. The Bay Area is the original example. But t

The central problem with this model is that any metro that graduates to "tech hub" becomes unlivable in short order. The Bay Area is the original example. But then it happened to Seattle, Portland, and NoVa. Most recently it happened to Denver and Austin, where housing prices have tripled in five years. It's starting to happen in Nashville, Atlanta, SLC, and Columbus. It's a combination of the immense wealth generated by the tech industry and the rigid supply inelasticity of America's NIMBY housing policies. Anywhere this unstoppable force meets this unmoveable rock, prices explode. The entire area quickly becomes unlivable for anyone who didn't get in on the property ladder early. Then the tech industry is forced to go out and find a new tech hub for all the junior engineers who are bid out of a house by the senior engineers who cashed out their RSUs. Full remote is the one opportunity the industry has to actually break this cycle. After all it's not just a problem for tech recruiters, it's also having all kinds of disastrous spillovers for the regular non-tech folk, who happen to be unlucky enough to live in the next metro targeted by the tech industry.

redisman 6y ago
There’s gotta be some limit to how many cities can maintain insane rents. High salaries spread across 10 cities instead of 1 should be a much saner equilibrium unless the tech workforce and salaries multiples in number too
- dcolkitt 6y ago
  I guess one issue is that most of the new tech hubs tend to be mid-sized cities that don't really have the capacity. Austin metro is 2.2 million. Denver is 2.9 million. Nashville is 1.9 million. In contrast the Bay Area has 10 million people, and even that struggles to absorb tech wealth. I think dissipation would happen if tech was actually expanding into a few large metros. Houston, Chicago, and Miami all have reasonable COL, but more importantly have way more population to absorb an influx of high wage earners. It's an interesting question, and one I don't really know the answer to. Why does the tech industry seem to consistently prefer mid-size metros like Austin to large metros like Miami.

redisman 6y ago

There’s gotta be some limit to how many cities can maintain insane rents. High salaries spread across 10 cities instead of 1 should be a much saner equilibrium unless the tech workforce and salaries multiples in number too

dcolkitt 6y ago
I guess one issue is that most of the new tech hubs tend to be mid-sized cities that don't really have the capacity. Austin metro is 2.2 million. Denver is 2.9 million. Nashville is 1.9 million. In contrast the Bay Area has 10 million people, and even that struggles to absorb tech wealth. I think dissipation would happen if tech was actually expanding into a few large metros. Houston, Chicago, and Miami all have reasonable COL, but more importantly have way more population to absorb an influx of high wage earners. It's an interesting question, and one I don't really know the answer to. Why does the tech industry seem to consistently prefer mid-size metros like Austin to large metros like Miami.