From @collapsedsquid:

There are more serious matters, like what makes cities like that so great?  What’s the difference between a bustling metropolis and a dense collection of slums?

Moving this out into its own thread because I hate the quote reblog syntax.  

What makes a city?  

Cities basically exploit the hinterland.  @kontextmaschine wrote an interesting post about what happens when a city loses its hinterland (Actually, his/her whole little series there was quite good).  Bolding mine: 

Then finally there’s Philadelphia, which was there because it commanded the Delaware and thus the Delaware Water Gap past the Appalachians, which hasn’t mattered since the Erie Canal and railroads, and at this point is mostly there because Philadelphia was there. White flight, black crime, the underlying fundamentals that “five-story brick buildings in proximity to rail spurs, non-containerized docks, and dense labor-identifying neighborhoods” was no longer an appealing industrial model. At least it still had some finance and culture and tourist and professional stuff to hold onto, Camden and Trenton across the river in Jersey became - and as far as I can tell still are - absolute hellpits.

And back pre-airplane, everything was location, location, location.  

Chicago and Atlanta both basically exists because they are/were the corner on the railroad (Great Lakes and Appalachians respectively).  Even once we got past railroads to roads and planes, Chicago has both O’hare and every east/west freeway from SF to Seattle going 20 miles south of their downtown (80/90/94 with 90/94 going right through).  That’s just the way the geography worked.  

Yes, you’d get brain drain, but the main thing that the cities were providing were single points of markets as dictated by geography, and labor agglomeration effects.  

TODAY, this is subtly different.  Because today we work in atoms and not bits.  Yes, the existing cities won (well, some of them), but that was a first mover thing.  Because almost none of this is about access to natural resources, it’s ALL about access to brains.  

And of course, thanks to the internet and the airplane, these hinterlands can be larger than ever.  London is less than half-British these days.  

Which is great.  

Why this concerns the hell out of me: 

We’re adding jobs and not houses.  

We stopped building housing in 1991. We really stopped building housing in 2005.  i mean this. 7pct of the per-over-16-capita housing stock is GONE since 1991.  We’re missing 5 Million homes since 2002.  The housing “bubble” wasn’t.  

So what’s happened is that as cities rise and cities fall, people can’t leave the falling areas for the rising ones.  And relevantly to the recent election, can’t leave the rural areas for the urban ones.  In fact, in many cases, they’re mathematically forced to flee Silicon Valley, median wage $80,000/rent $40,000 for Dallas ($50K/$15K).  And they do.  In droves.   

(In fact, it’s actually worse than that, because Dallas WAS building homes.  They weren’t next to the jobs, but running away to Dallas was an option.  When I say that the main industry in Las Vegas was building homes for LA refugees, I’m dead serious.  Then we killed the credit markets in 2006 and they had to stop.  Which is why nationwide rents went above 30pct of income recently.  Because houses/over-16 capita fell from .57 to .53).  

Because New York City only built 50,000 units last year.  Or slightly less than is required to keep up with the kids they have, much less Wall Street and tech in-migration. 

If you want to be no-growth, that’s fine.  But the unit of growth isn’t the household, it’s the job.  For every job a house, for every house a job, and god help you if you can’t build infrastructure to connect those two things.  

So what we’re doing is creating 2 Americas. The one in the cities on the red line and the one in the countryside on the blue.  Where the difference goes to rent.  

Because Seattle used to be a nice $50K/12.5K city like Dallas and now they’re at $75K/$30K.  

So OF COURSE it’s great for these cities.  They’ve taken every elasticity the nation has to offer and pulled them taut.  They’ve eaten every last bit of consumer surplus.  You don’t think that iPhones could be a bit cheaper if Apple Engineers were making $100K living like kings in Metro Detroit than $200K in Cupertino huddling in their apartments an hour from work?  Even more so for Google and Amazon since they’re located way further up the housing value chain?  

And it’s been terrible for their residents.  Seattle rents went up $3,000 last year (To wit: $75K annual income/40pct rent/income/10pct annual increase).  Unless the average resident got a $5,000 wage increase (Boo taxes), the average Seattle resident had a falling standard of living.  

Until one day, they give up and take a $25,000 paycut to move to Dallas.  Or Cleveland. Because I’ve been in Silicon Valley for 4 years and my rent tripled while my commute quadrupled.  So I’m trying to GTFO because I’m done June 1st*.  

And they DO.  Net out-migration from those high-cost coastal metros is on the order of 10pct per decade.  Which means that you’re MORE likely to stay in Detroit than San Francisco.  By quite a lot in fact.  

London is doing great.  But half of London wasn’t born in Britain.  Which means that at best Britons in general aren’t enjoying the London prosperity (and are caught up in the London property bubble), and at worst that several Million Brits had to give up and move to Leeds for values of. Anyone want to bet what THEY think of the last couple decades?  

Oh wait, we already know.  Because Brexit and Trump.   

*Quite literally.  There’s 5 bands I want to see at some point, and 4 things I want to do before my knee goes out, and I’m seeing 3 bands and doing 2 of the things in April/May 2017.