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Econ 101: people aren’t paying $3,000 a month because everyone in business has failed to think about opening an office in the suburbs. Walkable neighborhoods ar
by acdha 1y ago
Econ 101: people aren’t paying $3,000 a month because everyone in business has failed to think about opening an office in the suburbs. Walkable neighborhoods are expensive because they’re so desirable that Americans pay a premium to live there. The answer should be removing the barriers preventing builders from supplying that demand.
- pclmulqdq 1y agoI don't think this is actually quite the case when you look historically. What seems to be the case is that cities have a sort of S-shaped demand curve, where a fraction of people are willing pay a huge premium to be near their job and their entertainment, and many others need housing to be dirt cheap to live in the metaphorical pod. In other words, it's not that the demand curve is just higher than the suburbs: the demand curve is more sloped. Cities then constrain their housing supply so that landlords end up only serving high-premium customers, ensuring that the surplus here goes to landlords and not to renters.
- gdubs 1y agoI mean, the South Bay is a gigantic suburb and it costs more than that a month.
- acdha 1y agoDoesn’t that suggest that there is so much demand that successive waves of people have settled for the closest in they can afford? I remember people talking about being priced into a hefty commute during the dotcom bubble and only the top tech workers saw income growth keeping pace with real estate prices since then.
- kstrauser 1y agoPeople often talk about supply and demand until this subject comes up. “How can you stand to live somewhere so expensive?” “Because it’s so nice that many people want to live here.” “Impossible!” The high COL is proof that people enjoy it and are voting with their wallets. It’s not as though everyone here is ignorant of the existence of Oklahoma. I’ve lived there-ish. I pay extra not to have to anymore.
- aydyn 1y agoThe demand is due to high paying jobs in the area not because San Fran is a nice place to live (lmao). The massive outflux due to COVID WFH is proof.
- kstrauser 1y agoSo the open market voted and decided that the area can support a high COL, but we'll choose every explanation other than that people want to live here.
- aydyn 1y agoPeople do want to live there because... of... jobs. How is this hard to understand LOL. You really think if high paying jobs were more spread out we'd see this insane Calhoun-like concentration of people in geographically tiny areas?
- acdha 1y agoNow, why are the jobs there? Is it because everyone wants to pay tons more for housing, or is it because people with higher incomes are willing to pay for better living conditions and everyone else is pulled along? Tech didn’t used to be anywhere near this concentrated but over the decades people moved out of declining cities and that produced the current hyper-concentration. That cycle is brutal - you have cities like Rochester which have a lot of comparatively cheap real estate but until the senior management want to live there, they won’t have enough businesses for any skilled workers not to think they’d be screwed if their current employment changes because there aren’t many alternatives.
- aydyn 1y agoYes, I think what it comes down to is its more efficient for companies because of that positive feedback network effect. WFH could have changed that equation and made life better for everyone. Too bad we can't have nice things.