The Unaffordable Urban Paradise

https://www.technologyreview.com/s/607957/the-unaffordable-urban-paradise/

by piquadrat • 9 years ago

52 76 9 years ago

akanet• 9 years ago

The author's recommendations are certainly apt, though I wonder if he realizes how much of a political nightmare trying to get cities like Berkeley to build more housing is. Berkeley is probably the staunchest NIMBY city of the major Bay Area cities. The mayor and city council recently outright denied a simple rebuild of a house on Haskell St (heh) that would have added a couple extra units of housing.

We believe this to be in violation of the Housing Accountability Act, and have brought a lawsuit against Berkeley that you can read about if you're interested! http://www.carlaef.org/berkeley

More broadly, the Bay Area needs to build housing as quickly as possible. If you work at a tech company, please consider getting your company involved. If you can't participate directly, there are increasingly many groups in the Bay Area dedicated to lifting outdated zoning restrictions and accelerating the pace of housing development. We would love to have your patronage! http://www.sfyimby.org/

muninn_2• 9 years ago

Or you can move if you can't afford the area. There are plenty of places with lower costs of living. You can't live in what is perhaps the most desirable area in the world and then be upset that people want to protect/increase their property value or not change how their community is. Not everybody wants to live in a sea of imposing skyscrapers.

-edit

So I see a few comments discussing things like commuting, urban sprawl, etc.... Those are fair comments and I largely agree. But the solution proposed is not the right answer either. We need mixed-use developed walkable neighborhoods. We need our work places to be mixed within our neighborhoods along with our parks, convenience stores, and everything in between. Obviously I'm not a fan of sprawl, but I'm not a big fan of skyscrapers, and I'm also not a fan of others being upset about the affordability of the world's most desirable areas. While it is true that there is much more economic opportunity in a place like San Francisco than, say, middle-of-nowhere Arizona or something, it would be incorrect to suggest that there is no economic opportunity. Frankly, the assessment being made here is that you're choosing to suffer a 2-hour each-way commute and unaffordable rent for the opportunity to work at really cool companies, but the solution, which is to force other people to change their way of life, even if you find it contemptable, is an inherently immoral stance. If a town votes in a mayor who does what the town wants, what is more American, and democratic than that? Is overrunning the town with lawsuits and fights an ethical thing to do? I don't think so. Pack your stuff, and move. When (insert company here) can't get employees to relocate to the insanity that is the Bay Area, they'll move their offices, and things will resolve naturally and peacefully.

Disclaimer: I have never lived long-term in the Bay Area and I have no vested interest in how any of this turns out. If anything, reading the horror stories about people subletting camping spots in their backyard and the like amuses me (obviously I feel bad too). I do confess I have a vested interest in promoting mixed-use development neighborhoods and I would like to see more people move out of the Bay Area and back into the rest of the United States as I believe that the concentration of wealth and knowledge in one (or a few) areas is contributing to the fractures in our society and anti-competitiveness of our second and third-tier cities.

zucchini_head7• 9 years ago

Doesn't solve the problem. This approach contributes to urban sprawl, which is normally bad for the environment (people doing 2h car commutes is incredibly polluting, verses a shorter and commute or using public transport).

A good summary of the bad effects of urban sprawl is available on Wikipedia [1].

[1] https://en.wikipedia.org/wiki/Urban_sprawl#Effects

dsfyu404ed3• 9 years ago

Commuting has a cost that is more than just dollars especially for people who can't afford to outsource most non-income earning aspects of their lives.

twobyfour3• 9 years ago

1) A city can't survive if the people needed to work the jobs to make it an appealing place to live can't afford to live within commute distance.

2) The more affordable places tend to have less economic opportunity (which is part of why they're in lower demand and more affordable in the first place), so moving there isn't necessarily a win.

raldi• 9 years ago

It wouldn't take a sea of imposing skyscrapers; just a small amount of land close to transit would need to be upzoned from single-family houses to six-story apartment buildings like they have all over Europe's most beautiful cities.

http://tinyurl.com/6storySF

Bartweiss• 9 years ago

We need mixed-use developed walkable neighborhoods. We need our work places to be mixed within our neighborhoods along with our parks, convenience stores, and everything in between.

I strongly endorse this. I'd argue that it's totally compatible with expanded housing, though.

The population density of Somerville, MA is 18,000 per square mile. It's the 16th densest municipality in America, only narrowly behind San Francisco itself (18,600). That's almost 3 times Berkeley, CA (6,400), and 7.5 times Palo Alto, CA (2,400).

Somerville is also a pleasant, human-friendly city devoid of skyscrapers. It's a perfect example of mixed-use urbanism. The tallest buildings are ~12 stories, and that's government housing on the edge of town - almost everything is far shorter. That's nuts - it says we can massively increase population density while maintaining a Strong Towns approach to urban design.

Somerville cheats a little bit, because so many residents work or go to school in Cambridge and Boston. (Workplaces obviously kill density, since they're sized per-person but exist parallel to residences.)

But Somerville's real advantage is being old - older than stupid zoning laws. There are only 22 residences in all of Somerville that would be legal to build today, despite those old, illegal residences being livable and massively in-demand.

http://cityobservatory.org/the-illegal-city-of-somerville/

I don't think there's really a dichotomy between "live in NYC/SF style skyscrapers" and "overpriced housing with urban sprawl". You can relax zoning restrictions without getting highrises and tenements. It just requires careful planning and a willingness to abandon suburban, parking-lot filled design.

zucchini_head7• 9 years ago

Just skim-read through that story. Sounds pretty part-and-parcel for these kind of things, it's the same where I live too (UK).

The first step is always to include irrelevant statistics, since this bulks-up the case with "we are good people" rabble, and makes it harder to understand. It's essentially used to drown-out the key details of the case and to slow things down by making it much longer to read.

One of my older family members has been a council (our version of states I suppose) member for over 40 years, and some of the stories I hear are incredible.

I've heard stories of people submitting 300+ page testimonials and hundreds of correspondence over just 1-2 days just over small renovations, purely to obfuscate the case's legitimate and important details that are against their favour.

I'm really glad people are documenting things like this so we can actually see how bad it is getting...

maxerickson2• 9 years ago

Town councils are approximately the same level of government as cities/counties in the states.

(there are also often township governments that operate inside of counties, but modern travel makes them kind of stupid and there is a lot of at least de facto passing of authority up to the county level).

tryitnow• 9 years ago

I love what you're doing, so let me tell you what's holding me back from jumping on board.

Traffic. You want more housing, but that almost always means more cars - and how do you handle that? But it's more than just traffic - broadly speaking it's the principle of Chesterton's fence (https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton.27...). Before making rapid changes, let's understand why the status quo is the status quo.

The reason I can't support YIMBY is because it comes off as too much like reverse stupidity - let's just do the opposite of those nasty NIMBY's and then things will be all right! That never works.

As for your claims about Berkeley, I've been frequenting Berkeley since 2014 and I've witnessed a pretty significant amount of construction on Shattuck - and I'm left wondering - how on earth are the roads going to accommodate the massive increase in traffic?

One thing people should consider is banning automobile ownership for residents of new buildings. That would address the concerns of critics like myself and lead to a whole lot less opposition to new construction. Plus, it would create stronger demand for public transportation and car-sharing - both of which are conducive to the goal of greater density. And honestly, a lot of tech-savvy millennials don't even want to own a car.

dgacmu• 9 years ago

Traffic is an important concern. If it doesn't take proposition 13 into account, it's probably not going to be as effective as it should. Prop 13 creates too many financial incentives not to relocate to be near your job -- part of the reason that California has become a commute nightmare [0]. It also creates too strong an incentive to hang on to empty property and not improve it. [1]

That said, increasing the housing density in some of those currently-suburban areas (around Google, Apple, and Facebook, for example) could help them transform into more viable urban areas, without an increase in car traffic.

[0] http://taxprof.typepad.com/taxprof_blog/files/2008-19151-1.p... " observed changes in commuting patterns in major metropolitan areas in California support that hypothesis. In particular, between 1980 and 1990, the number of workers in San Diego, San Francisco, and Los Angeles who commute outside the metropolitan statistical area to work increased 119 percent, 88 percent, and 80 percent, respectively. That is well above the growth in the number of similar commuters in other metropolitan areas across the nation, which generally ranged from 25 percent to 45 percent."

[1] http://www.slate.com/blogs/moneybox/2016/09/22/california_s_...

shawnee_2• 9 years ago

Now everything’s changed. In 2016, the San Francisco metro area was the top location for venture capital investment in the country, hauling in $23.4 billion—more than triple the VC investment in Silicon Valley proper.

Interesting numbers, what seems to be evidence of inflation chasing inflation. There's no logical justification for such a concentrated purse of investment dollars benefiting so few people. Furthermore, it would seem that it's benefiting the same people over and over ... the most obvious driver here is turnover. Probably there are a lot of PMCs in SF who absolutely bet on (hope for) the failure of most of the companies getting these investment dollars, the second they've signed their leases. Because who doesn't lose out when a startup fails and has to shutdown? The rent takers, the leaseholders prepared with aggressive litigation... everybody else loses. (As a side note, I'm pretty sure this is how the current US president's family empire was built: http://www.citypaper.com/blogs/the-news-hole/bcpnews-trump-s...)

In the 1980s, I was part of a team doing research into the geography of the high-tech industry. We couldn’t find a single significant high-tech company in an urban neighborhood. Instead, they were all out in the suburbs—not just Intel and Apple in Silicon Valley, or Microsoft in the Seattle suburbs, but the Route 128 beltway outside Boston, and the corporate campuses of North Carolina’s Research Triangle.

Because companies in the 80's were smarter. They knew that if you wanted to build a company that can build equity, you cannot be beholden to the lease holders and the rent takers. They built in the burbs because that is where they could establish equity. Today the "barriers to entry" for owning in SF are just too high for most; the continual delusion of people who think they can build a sustainable business model while being based in SF is mind-boggling to me.

api• 9 years ago

"Inflation chasing inflation."

Thanks for that concise summary.

ams6110• 9 years ago

Renting has been the standard model for suburban office parks too. Most companies do not own their own office buildings. It's more common for specialized space, e.g. manufacturing facilities but not usually done for offices.

maxsilver5• 9 years ago

Renting has been the standard model for suburban office parks too. Most companies do not own their own office buildings

For small business, sure. But is that really true in SF for mid-size to major companies? I know this is a midwest-skewed perspective, but most mid-sized and large companies really do own their suburban office buildings / HQ buildings here.

The only office space I know of that they rent, is the expensive monopolized spaces downtown. Which would seem to reinforce parent posters point.

shawnee_2• 9 years ago

That is not how it was in the 80's, as the author of this article mentioned. High-tech companies had more intelligent strategies then; they knew that people are the real value of high-tech companies, so it doesn't matter where you put them when you put them all together and give them the tools they need to be creative and build. Why not let them build something in areas with cleaner air, less crime, and more physical room to grow?

All of the companies he mentioned own the land and buildings in these 'burbs where they grew their companies. That is why Apple is building their space ship HQ today... they established equity and are now sitting on more piles of cash than they know what to do with. Their employees own their homes in the areas surrounding them, thus building affluence. In fact, it could probably be further proven that when a company does own its land and buildings, it's inherently stronger and more likely to be able to withstand upturns and downturns in economic timelines (thus giving employees even more incentive to work a fledgling company out of hard times).

There's probably a neat little equation to be written to pithily show the relation. Maybe I will write something up later and post it on ecosteader...

Something about the summation of rents (Sigma) paid by all team members (T[x]) in a startup as a function of runway building. To lengthen the runway, the Sigma cannot grow faster than a company's ability to acquire the top talent needed to build out that runway. There's an inflection point somewhere where you can neither grow, nor afford to attract and hire the top talent because of the wasted and sunk costs in rents and achieving "brand recognition" by being in a place like San Francisco. You can't pay the best people enough to relocate there when the probability of overall success is hinged upon getting more and more VC to sustain there.

ghaff• 9 years ago

Yes, in the 80s, companies built out in the suburbs/exurbs in part because it was cheaper. But they also built out there because relatively few of their potential employees had much interest in living in the city.

I worked for one of those suburban computer companies in the 80s/90s and almost no one I knew commuted out from the city even though many people I worked with had equally long commutes (45 minutes to an hour) in other directions.

bluedino2• 9 years ago

> They built in the burbs because that is where they could establish equity.

I thought they wanted to build sprawling campuses because they didn't want to feel like an old stodgy company in a tall office building downtown?

Not to mention hardware companies like Intel/Apple probably couldn't get the warehousing and manufacturing footprint they need in a big city.

ionwake4• 9 years ago

Please do correct me if I am wrong.

But isn't the whole reason lower class job salaries increased in the USA was simply because they had just won a world war?

I do not know enough about the reasons for affluence in the 50s, but surely it was in large part to success in the war?

If so, how could one suggest the minimum wage is just raised without it causing mass unemployment in the present?

I must be misunderstanding something.

aninhumer4• 9 years ago

I'm not sure how you think winning a war leads "simply" to higher wages?

There were a lot of factors surrounding WW2 which contributed to the success of the US afterwards, but they're nowhere near as simple as the fact that they won.

If anything, the most immediate outcome of the victory is a sudden influx of unemployed soldiers needing jobs, which causes downward pressure on wages.

dilemma• 9 years ago

What the parent is referring to is the US having industrial production capacity that was left intact while Europe was in shambles.

hueving2• 9 years ago

The shattered manufacturing capabilities of Europe put the US in a leading position to be the primary provider to take its place. Essentially Europe was gone as a competitor in the global economy and became a consumer. This led to massive demand in the US which of course led to companies paying lots of workers to fulfill it.

SmellTheGlove• 9 years ago

If anything, the most immediate outcome of the victory is a sudden influx of unemployed soldiers needing jobs, which causes downward pressure on wages.

You had fewer soldiers coming back than you had shipping off. You also had worldwide demand for manufactured goods to meet, and Europe lost basically its entire infrastructure and nearly an entire generation of working age men.

matt4077• 9 years ago

Germany quite definitely lost WW2 and saw incomes rise even faster after the war: wid.world/solo.php#0/countriestimeseries/anninc_pall_992_i/US;DE/last/eu/k/p/yearly/a/false/1844.6039999999998/75000/curve/false

"Winning a war" is surprisingly useless, economically.

A higher minimum wage would certainly not create "mass unemployment". Most research points to unemployment remaining about the same. That's because there are different mechanisms involved that work in opposite directions.

Firstly, very few people would actually lose their jobs. These are the people who create a value of, say, 7$/h, and would therefore be a net loss if their wage were raised above that level.

But that's quite rare. Most people working for minimum wage create value >= their wage. Currently, that value is "captured" by their employer and/or by the customers. Raising the minimum wage would just redistribute that surplus value: Instead of getting a Happy Meal for $6, the customer may have to pay $6.25. And instead of making $1 on the sale, McDonald's may only make 75cents. The employee gets 50cents extra.

Since, by definition, these are the poorest people, any extra cash they get is usually also spent rather quickly, If our employee uses their extra $100 for this month to get his shower fixed, it means extra business for a plumber. Compare to the current situation, where those $100 end up with McDonald's shareholders, and customers, who may use it to buy more shares and inflating the S&P500 without any effect in the real economy.

arethuza• 9 years ago

The Germans had their WW2 debts largely cancelled in 1953 to aid their industrial growth so that they could help oppose the Soviets:

https://en.wikipedia.org/wiki/London_Agreement_on_German_Ext...

This is currently a bit of a sore point with some Greeks...

firebird84• 9 years ago

For your last example, it could give someone the ability to liquidate their position (from the buyers of that stock), get $100 in cash to pay a plumber, or if you're arguing about their social class perhaps the last $100 of down payment needed to finance the new yacht they had built. That yacht-building also creates jobs. Most likely that stock is institutionally owned though, so it goes to a retirement fund redemption somewhere producing income for a retiree to participate in THEIR local economy.

zucchini_head7• 9 years ago

Well, a lot of historians say that the USA's economy flourished post-war not necessarily because they "won" it (hard to define concept these days), but because everybody else's manufacturing infrastructure was completely flattened.

Why do you think the USA automobile market exploded post-war? It's because the two biggest automobile manufactures - Germany and Japan - were flattened to smouldering ashes and took around 30-40 years to recover.

That's why the USA auto industry declined on an enormous scale after the 80's, because in the end the USA was never automobile king. There was never the "good old Detroit days". It was just a temporary market vacuum that the USA capitalised on, while Germany and Japan, who simply were better at making cars (debatable of course, but they make more money and that's probably the most reliable metric here), were rebuilding their entire country from catastrophe.

kasey_junk4• 9 years ago

Were the Japanese auto manufacturers a large player prior to the war? I thought the domestic production there was essentially nothing before the ramp up to war in the 30s.

dsfyu404ed3• 9 years ago

https://www.statista.com/statistics/271608/global-vehicle-sa...

http://www.jato.com/wp-content/uploads/2016/06/JATO-Global-C...

GM VAG and Toyota all have similar shares of the global market. Depending on how you want to nitpick you can make The Americans, Germans or Japanese look like the dominant player in global vehicle sales but it's really too global of an industry to draw the lines based on the country the CEO's office happens to be in.

JoeAltmaier2• 9 years ago

Hm, doesn't seem to add up. Flattened countries were not buying cars - so the foreign market for US cars would actually go down post-war? As for reduced competition - how many foreign cars did America import before the war? We're talking the excess capacity of pre-WWII Germany - a depressed economy (the indirect cause of WWII) which couldn't have been much.

I'd credit an increased US appetite for goods, a huge influx of trained workers (trained by the military for war purposes) and a excess war-related manufacturing capacity turned to domestic goods with the prices reduced by volume manufacturing.

All of which could be called "because the US won".

ionwake4• 9 years ago

Simple and a great point thank you

dasmoth2• 9 years ago

This is an incredibly "urbanist" piece. No mention at all of companies moving to less-populous locations, let alone alternatives such as remote work. It's hard not to be left with the impression that the author isn't going to be happy until everyone is living like ants.

stupidcar• 9 years ago

Hard not to be left with the impression that you consider people who enjoy living in cities to be insects, and expect every piece you read to reflect that bizarre prejudice.

dasmoth2• 9 years ago

There are many variations on "living in cities". Some of them involve single-family dwellings and lots of private space. It actually seems to be those models which are most strongly under attack right now.

TulliusCicero3• 9 years ago

If companies want to do either of those things, that's fine, but it should also be fine to move to the city. Many people like living in cities, and even people who like living in suburban areas can use transit to commute.

Or rather, they should be able to use transit to commute, unfortunately the state of transit in most of the US is rather poor, to say the least.

petraeus• 9 years ago

Privatize the profits and socialize the losses, the great American dream.

sevensor4• 9 years ago

This piece is by Richard Florida, who helped create the very problem he laments. Ten-fifteen years ago, he was talking up the same cities as magnets for the "creative class." Now all of a sudden he's concerned about the janitors and street sweepers? I'm not taking Florida seriously if he can't acknowledge his past myopia.

jdavis703• 9 years ago

Isn't this an ad homin argument? What is wrong with his actual policy proposals?

sevensor4• 9 years ago

They're pretty thin. Build housing. Build transit. Raise the minimum wage. There's nothing wrong with those, but he's pretty late to the party.

So I'd say this isn't an ad hominem. I'm not trying to attack the argument by attacking the man. I'm just attacking the man. Florida in particular isn't credible because a decade ago he was boosting municipal gold-digging -- chasing after high-flying tech companies and ignoring bread and butter issues like the ones he's lately rediscovered.

kasey_junk4• 9 years ago

Isn't this him doing just that? The creative class came back to the cities, changing what the problems are?

sevensor4• 9 years ago

We needed better transit and affordable housing ten years ago too. Florida just didn't care at the time. That's what I think is missing -- a mea culpa for ignoring crucial urban issues and promoting the kind of growth that would muscle out the non-"creative" people a city needs to function. Big scare quotes for "creative", by the way. My other pet peeve with Florida is that he thinks creativity is the exclusive province of the affluent.

francisofascii• 9 years ago

Yeah, I was thinking the same thing. He created this perception that to be part of the "creative class", you must live in SF, DC, Austin, Seattle, etc. We should get away from that idea. I am all for denser housing, public transit, walkable communities, etc. But I think other cities should also get a share of the prosperity. Good talented people can't afford SF, so they go another, less hip city. I think that is a good thing.

ptero• 9 years ago

Be careful what you wish for -- setting the minimum wage to half the prevailing wage at a municipality is likely to create very weird setups, especially where a richer cluster is next to a residential or poorer one, e.g. Manhattan and Jersey City.

Bank tellers and janitors in Manhattan would be getting a fortune compared to the same job being done (by the same company) less than a mile away. I suspect the "bonus" jobs will quickly have all sorts of semi-illegal strings attached to them; there will be a rush by employers to reclassify jobs as being done in a poorer area (we do not work there, we are just visiting / delivering), etc.

While the current state has problems, the proposed fix may be worse than the disease it is trying to cure. My 2c.

awkward2• 9 years ago

This article is a pretty big turnaround for Richard Florida - he's credited with the ideological underpinning of a lot of the urban renewal that has caused gentrification and other problems.

sgt101• 9 years ago

Or tech companies could pay taxes that allow for proper urban development just like real companies do? Apple, I am looking at you and your $200bn pile of not taxed money and I am not impressed!

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