4 ms·
Expensive urban areas suffer from an excess of demand for housing, while the stock of houses is naturally limited, pushing the rental rates through the roof. A
by gizi 11y ago
Expensive urban areas suffer from an excess of demand for housing, while the stock of houses is naturally limited, pushing the rental rates through the roof. A good example would be London, UK. New York and San Francisco in the US are other good examples. People want to move there, because they are attracted by the jobs. The question is now, of course, why do employers want to move there? Because their customers are there? I doubt it. The economies of SF or NY obviously feed on the rest of the country. Because labour is cheaper there? Also not. With communication channels pretty much of equivalent quality across the country, there is no rational, justifiable reason for an employer to set up his offices in an expensive urban area. He is just pushing down the standards of living for the lower salary rungs of his staff.
- santaclaus 11y ago> People want to move there, because they are attracted by the jobs. I think there is more to it than that: people like functional public transit systems, people like the concentration of others with similar interests, people like diversity, people like living arounds lots of restaurants, bars, entertainment...
- BinaryIdiot 11y ago> The question is now, of course, why do employers want to move there? Everytime I go to NYC I wonder this very thing. Looking at the tiny, tiny offices and how expensive EVERYTHING is I don't really understand why there are so many companies there. I guess it's a bit of PR / marketing but surely having offices there (especially in Manhattan) doesn't make sense otherwise, right? Though I could be missing something. I just feel like it has to be mostly PR / marketing.
- dragonwriter 11y ago> The question is now, of course, why do employers want to move there? Because those places are very good places for rich people -- because they have enough of them close enough together to support services catering specifically to them -- and because employers (at least, the executives making decisions for them) are rich people.
- jseliger 11y agowhile the stock of houses is naturally limited Actually, housing stock is not "naturally" limited; it is quite artificially limited: see e.g. http://www.amazon.com/Rent-Too-Damn-High-Matters-ebook/dp/B0078XGJXO http://www.amazon.com/Rent-Too-Damn-High-Matters-ebook/dp/B0...