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Why is big-city rent so expensive?


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For years, I assumed big-city rent was expensive because the bragging rights, and/or glamour, of urban areas were worth the money in the eyes of their residents. I don't know how sustainable such a situation is; I figure the menial jobs like janitor and grocery store clerk necessary to keep such a city going surely can't be compensated well enough to pay for their out of control rent; but I figure if they decide that it's worth it to go to such a major city, and those who have other priorities opt to live in small towns, so be it. If the rich take over the big cities, then that means that at least their money is going to some landlord instead of to buying a second yacht or whatever. (Though frankly, I'd rather it go into the government coffers to help the poor.)

 

But now I see a massive pandemic that has for the most part spared small towns of the kind of situations where doctors have to decide whether to save you or save grandma. That this has sparked an "eviction crisis" and not an "oh shut up landlord you couldn't pay ME enough to live in this death trap anymore" crisis makes me think there has to be more to it than glamour and/or bragging rights... unless they're literally to die for.

 

What's this all about, anyway? Is it really about how many jobs big cities have? If so, why hasn't the fact that small towns lend themselves (relatively) better to farming (plus said farms are subsidized by the government on top of that) incentivized de-urbanization instead of urbanization? If it's the fact that that can't transport people between small towns as efficiently as between big cities, why not have parking garages in small towns, next to train stations, such that people can just drive to the train station instead of driving to another town and probably hitting a deer along the way?

 

I've been on both sides of this issue. I've been indirectly called a loser hick by people who use that label on people with opinions similar to myself on the above, and I've more directly been called a smug liberal who couldn't survive in the wilderness to save my life by people for merely pointing out that, for all their supposed worship of the "free market," the type of people who typically vote Republican have no problem accepting government money in the context of farm subsidies. They can't both be right.

 

Theoretically, if there were no such thing as international travel, could you have major cities without having pandemics? I suppose it's mostly the city-dweller vote that puts pressure on politicians to keep international travel open, as both the former and the latter are associated with the left, but that still leaves behind the question of whether or not a more direct correlation could be established, and if so, why...

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57 minutes ago, ScienceNostalgia101 said:

For years, I assumed big-city rent was expensive because the bragging rights, and/or glamour, of urban areas were worth the money in the eyes of their residents. I don't know how sustainable such a situation is; I figure the menial jobs like janitor and grocery store clerk necessary to keep such a city going surely can't be compensated well enough to pay for their out of control rent; but I figure if they decide that it's worth it to go to such a major city, and those who have other priorities opt to live in small towns, so be it. If the rich take over the big cities, then that means that at least their money is going to some landlord instead of to buying a second yacht or whatever. (Though frankly, I'd rather it go into the government coffers to help the poor.)

 

But now I see a massive pandemic that has for the most part spared small towns of the kind of situations where doctors have to decide whether to save you or save grandma. That this has sparked an "eviction crisis" and not an "oh shut up landlord you couldn't pay ME enough to live in this death trap anymore" crisis makes me think there has to be more to it than glamour and/or bragging rights... unless they're literally to die for.

 

What's this all about, anyway? Is it really about how many jobs big cities have? If so, why hasn't the fact that small towns lend themselves (relatively) better to farming (plus said farms are subsidized by the government on top of that) incentivized de-urbanization instead of urbanization? If it's the fact that that can't transport people between small towns as efficiently as between big cities, why not have parking garages in small towns, next to train stations, such that people can just drive to the train station instead of driving to another town and probably hitting a deer along the way?

 

I've been on both sides of this issue. I've been indirectly called a loser hick by people who use that label on people with opinions similar to myself on the above, and I've more directly been called a smug liberal who couldn't survive in the wilderness to save my life by people for merely pointing out that, for all their supposed worship of the "free market," the type of people who typically vote Republican have no problem accepting government money in the context of farm subsidies. They can't both be right.

 

Theoretically, if there were no such thing as international travel, could you have major cities without having pandemics? I suppose it's mostly the city-dweller vote that puts pressure on politicians to keep international travel open, as both the former and the latter are associated with the left, but that still leaves behind the question of whether or not a more direct correlation could be established, and if so, why...

I'm not entirely sure I follow all this. But as a rule city housing is expensive because the land it stands on is expensive, due to its location - in the city. People want to live in cities, so demand is high and prices rise in response.

What your question comes down to, it seems to me, is why it is that people want so much to live in cities. It is partly the variety of jobs available - many of them well-paid -  and partly the amenities of cities, I guess: the bars, cafes and restaurants, the entertainment, the night life, the culture (theatres, concert halls, museums, art galleries) etc. Small town and rural life is often thought dull by comparison, especially to the young - who may also be looking for partners and therefore want to be where there are lots of similar aged people in the same position. People have tended to move to the cites for such reasons for centuries.   (The story of Dick Whittington relates to a mayor of London from the c.14th, I gather.) 

There are many newspaper articles at the moment speculating whether the advent of the internet and the pandemic may have changed the attractiveness of cities, since desk workers have learned how to work effectively remotely.  But it seems to me that most of the reasons I have listed will still apply, even post-pandemic. 

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1 hour ago, ScienceNostalgia101 said:

For years, I assumed big-city rent was expensive because the bragging rights, and/or glamour, of urban areas were worth the money in the eyes of their residents.

Was supply and demand not considered?

 

Quote

What's this all about, anyway? Is it really about how many jobs big cities have? If so, why hasn't the fact that small towns lend themselves (relatively) better to farming (plus said farms are subsidized by the government on top of that) incentivized de-urbanization instead of urbanization?

How many farming jobs are involved here? 

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7 minutes ago, swansont said:

Was supply and demand not considered?

LOL +1 

I wonder what a job is worth, without a farmer???

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19 minutes ago, swansont said:

Was supply and demand not considered?

 

How many farming jobs are involved here? 

I'm not referring solely to farming jobs, but also to jobs that relate to providing services to farmers.

 

For instance, if a town's economy were associated with selling services to people from the surrounding fishing villages, the more fishing jobs there are, the more lucrative that small town's economy built on selling services to fishing villages would be. If the fishery were to collapse, that town's economy would be dealt a secondary blow.

 

I get frustrated whenever rural types vote Republican, as it seems like mental gymnastics to say capitalism was wrong about this one (implied in the acceptance of farming subsidies) and still expect it to be right about everything else. I don't think it's any coincidence they engaged in the same mental gymnastics around the MLB/Georgia controversy.

 

However, that doesn't change the fact that farmers are providing a service the rest of us literally physically need.

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14 minutes ago, ScienceNostalgia101 said:

I'm not referring solely to farming jobs, but also to jobs that relate to providing services to farmers.

But you only mentioned farming.

14 minutes ago, ScienceNostalgia101 said:

For instance, if a town's economy were associated with selling services to people from the surrounding fishing villages, the more fishing jobs there are, the more lucrative that small town's economy built on selling services to fishing villages would be. If the fishery were to collapse, that town's economy would be dealt a secondary blow.

 

Why wouldn’t these business be located in or nearby the coastal town where the fishing is taking place?

 

14 minutes ago, ScienceNostalgia101 said:

I get frustrated whenever rural types vote Republican, as it seems like mental gymnastics to say capitalism was wrong about this one (implied in the acceptance of farming subsidies) and still expect it to be right about everything else. I don't think it's any coincidence they engaged in the same mental gymnastics around the MLB/Georgia controversy.

 

However, that doesn't change the fact that farmers are providing a service the rest of us literally physically need.

What does this have to do with big-city rent?

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Why is big-city rent so expensive?

Properties in a big-city are expensive.  Property tax, is an Ad valorem tax, that is paid annually on the current property value.

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

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

i.e. the owner of the property has to hand it over to the people who rent the property (otherwise he/she would have been losing money every year and eventually going bankrupt).

Such tax is especially troublemaker for elder not wealthy people who own just one property and live in property (so can't rent it). They are eventually forced to sell property and moving somewhere else.

1 hour ago, dimreepr said:

I wonder what a job is worth, without a farmer???

Modern farming does not exist without artificial fertilizers (chemical industry), without fuel to agricultural vehicles, without mass transport of fuel from hole to the refinery and to gas stations. It is a network of connections which will collapse if one piece is missing. A farmer who loses access to fuel would move to the 19th century (and lack of effectiveness of production from that time) if he has sufficient knowledge of how to make a wood agricultural plow... There is very little horses and oxen now, so after collapse, he/she would be able only to feed himself/herself and family.

Therefor of mine previous "pushing on" solar panels, and solar energy: after collapse agricultural vehicles could still work reliably and provide food supply even without oil & gas industry.

Edited by Sensei
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As someone currently living in Iowa, I'll just highlight that yet again our OP is working from cartoonish misrepresentations of reality. Farmers are not mah and pah style couples like American Gothic holding a pitch fork in overalls with a coupla kids and chickens running around. Farms that feed the world are MASSIVE agribusinesses using MASSIVE agri-technology from seed producers and equipment manufacturers. Farming at this agribusiness scale is also a heavily invested in by billionaires in China and Saudi Arabia and other countries. It's time to lose the idea of a dude with 3-teeth chewing on a piece of straw and milking Bessy every morning at 5am and start thinking of folks with 3-piece suits who own millions millions upon millions of acres of land and who exploit the locals. See also: Hog farming. 

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3 hours ago, swansont said:

But you only mentioned farming.

I mentioned it as an example of a job for which rural settings, as opposed to urban ones, are a competitive advantage. Putting aside urban pollution and whether or not customers fear that might affect crop quality, there's also the aspect that high land values in major cities would make it pricier to buy large amounts of land to use for farming, hence the financial incentive to do it outside the major cities. (Regardless of whether or not "farmers" fit the archetypical 1950s stereotype; and by the way, I'm thinking more of farm employees than farm owners. My image of farmers comes from Food Inc., not Charlotte's Web.)

 

I used the fishing village analogy because one job leads to money in the economy, which can spill over into nearby towns. As for a town surrounded by fishing villages; picture the fishing villages along the coast as being like points along a concave mirror, and the town surrounded by them as being like its focal point.

 

I'm not trying to pre-emptively dismiss the possibility of other walks of life for which urbanization is the more competitive advantage, of course, just that it's doubtful there's one quite as necessary to quite as many people as farming. And as for the fossil fuels farms use... from what I recall, wouldn't oil rigs also be easier to get approved outside of urban centres than within them, if only because fewer people would want that in their backyard?

Edited by ScienceNostalgia101
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3 hours ago, ScienceNostalgia101 said:

I mentioned it as an example of a job for which rural settings, as opposed to urban ones, are a competitive advantage. Putting aside urban pollution and whether or not customers fear that might affect crop quality, there's also the aspect that high land values in major cities would make it pricier to buy large amounts of land to use for farming, hence the financial incentive to do it outside the major cities. (Regardless of whether or not "farmers" fit the archetypical 1950s stereotype; and by the way, I'm thinking more of farm employees than farm owners. My image of farmers comes from Food Inc., not Charlotte's Web.)

 

I used the fishing village analogy because one job leads to money in the economy, which can spill over into nearby towns. As for a town surrounded by fishing villages; picture the fishing villages along the coast as being like points along a concave mirror, and the town surrounded by them as being like its focal point.

 

I'm not trying to pre-emptively dismiss the possibility of other walks of life for which urbanization is the more competitive advantage, of course, just that it's doubtful there's one quite as necessary to quite as many people as farming. And as for the fossil fuels farms use... from what I recall, wouldn't oil rigs also be easier to get approved outside of urban centres than within them, if only because fewer people would want that in their backyard?

Cities are attractive, especially to young people, because of the variety they offer and the social life. If you are not sure yet what you want to spend your life doing, the city offers you the chance to try one thing and change if you find something better. Also it offers you the chance to meet more people like yourself, or more people who are very different, if that's what you are looking for. And it offers a variety of entertainment. Rural life, all too often, has very few types of job available, very few like-minded people to socialise with, and nowhere to go for fun.  QED.   

Of course when you are older and settled, rural life may have much to commend it. You may have a family and have stopped going out for socialising, you may value the peace and quiet, fresh air and walking, etc. In the UK we find the older people often want to move out of the city when they retire: as they slow down, they look for a gentler pace of life. Not me, though. I'm staying in London. 

 

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16 hours ago, ScienceNostalgia101 said:

I mentioned it as an example of a job for which rural settings, as opposed to urban ones, are a competitive advantage. Putting aside urban pollution and whether or not customers fear that might affect crop quality, there's also the aspect that high land values in major cities would make it pricier to buy large amounts of land to use for farming, hence the financial incentive to do it outside the major cities. (Regardless of whether or not "farmers" fit the archetypical 1950s stereotype; and by the way, I'm thinking more of farm employees than farm owners. My image of farmers comes from Food Inc., not Charlotte's Web.)

 

I used the fishing village analogy because one job leads to money in the economy, which can spill over into nearby towns. As for a town surrounded by fishing villages; picture the fishing villages along the coast as being like points along a concave mirror, and the town surrounded by them as being like its focal point.

 

I'm not trying to pre-emptively dismiss the possibility of other walks of life for which urbanization is the more competitive advantage, of course, just that it's doubtful there's one quite as necessary to quite as many people as farming. And as for the fossil fuels farms use... from what I recall, wouldn't oil rigs also be easier to get approved outside of urban centres than within them, if only because fewer people would want that in their backyard?

The thing is, if you live in a town or city, you probably don't have a job farming. Those people live on the farm. It's not high-density labor employment (you were asked for numbers. Where are they?) Besides fishing and farming and a couple of stores to supply them with what they need, what else would attract people to work there? (You could be a novelist and live in Cabot Cove, because you can do that anywhere, but personally I'd keep away from a place like that because of all the murders)

If you attract a bunch of other businesses to the town, employing a lot of people, then it's not a small town anymore. And some companies are going to demand/require infrastructure.  Power, roads, etc. A supply of labor, possibly skilled labor.

And if a lot of people live there, the rental costs are going to go up, because of supply and demand.

 

 

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28 minutes ago, swansont said:

And if a lot of people live there, the rental costs are going to go up, because of supply and demand.

Shelter is a basic need, and in a just society, rental costs should be affordable for all; before it's subjected to market force's.

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43 minutes ago, dimreepr said:

Shelter is a basic need, and in a just society, rental costs should be affordable for all; before it's subjected to market force's.

I don't disagree, but the question was about why things are the way they are, not how things should be. (and there are governments that do something about this)

This could easily apply to real estate that is not being offered to people who are just getting by. My apartment would probably cost half as much if I lived another hour outside of the city.

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7 minutes ago, swansont said:

I don't disagree, but the question was about why things are the way they are, not how things should be. (and there are governments that do something about this)

90% of the children I grew up with, were homed by the state; then the state sold (out) 90% of the home's; in England that's why "big city rent is so expensive"... 

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