It's probably cheaper and certainly more environmentally friendly to keep building upward in urban centers than to build mass transit to exurban areas. Urban areas already provide significant subsidies to exurban ones via taxes and cross-subsidies - see, e.g., [0] and [1]. The comparatively high cost of living in high-density areas is driven by a combination of those transfers and pricing distortions created by local governments, not by the fact that high-density housing is inherently less cost-efficient (and I'd argue that the opposite is true).

[0] https://medium.com/by-the-bay/financing-suburbia-6076dae990f...

[1] https://johnhcochrane.blogspot.com/2018/06/cross-subsidies.h...

It's certainly not cheaper, for developers, to build highrise aparments in the city than upscale tract homes on tiny lots in an exurb. And environmental impacts and the responsibility for transportation are both externalities easily pushed to someone else. This is what actually happens.

>It's certainly not cheaper, for developers, to build highrise aparments in the city than upscale tract homes on tiny lots in an exurb.

Why's that? At the margin, at least, it seems unlikely that this is the case - it's probably quite a bit cheaper to add an additional floor to a 50 unit/floor high-rise (when it's being constructed, not after the fact) than to build 50 detached single-family homes in an exurb, for example.

It's true that externalities can be, well, externalized, but that doesn't mean the difference in absolute costs shouldn't be considered. At the end of the day, someone still has to foot the bill.

It costs a very small amount compared to the actual value that they create.

Adding more houses in a place nobody wants to live is worth very little.

Adding more apartments to a place EVERYONE wants to live is VERY valuable.

I want developers to be doing the thing that everyone wants.

Large cities have higher productivity than smaller cities. Smaller cities have higher productivity than rural areas. Generally speaking cities' productivity is proportional to their size This happens because cities achieve agglomeration economies through the clustering of activities, labor pooling and knowledge spillovers.

http://www.nber.org/chapters/c7977.pdf

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

Everyone in dense areas is the only sustainable settlement pattern. The energy alone needed to maintain existing levels of sprawl cannot go on much longer.

I hear this a lot. But the fact remains that it is significantly more expensive to live in a dense urban area. Until the claimed efficiency improvement can be translated to an actual day-to-day cost improvement, people will continue to live where their dollars go farther.

I think there are different concepts of "cost" and "expensive" at play in this discussion which can lead to this kind of misunderstanding.

Having the population located in dense urban areas is more efficient and therefore cheaper in terms of the real resources that are required: infrastructure is cheaper to build, distances are smaller so that less time is wasted commuting and transport is cheaper (not to mention that highly efficient public transport becomes viable).

So in real resource terms, urban sprawl is more expensive.

But since land is still a limitation and zero-sum, competition can drive up housing costs in attractive dense urban areas to the point where it more than cancels out the efficiency gains of the urban density, and the cost of living in the urban area to the individual becomes higher than the sprawl.

This is why some sort of collective planning is required to make sure that as much as possible of the efficiency gains of urbanization are actually realized. This means having proper infrastructure mostly in terms of public transport.

(Of course, the other part of it is that you need to be careful not to look at just housing costs in the first place. For example, I don't even have to pay for a car, and I benefit from city infrastructure in many other ways.)

The land that can be used as "dense urban area" is strictly upper-bounded by zoning, precisely because it is so economically efficient: a few suburban homeowners cannot hope to compete financially with the ~400 potential high-rise condo owners vying to live on the same block, so instead they fight (and generally win) in the public-policy arena.

For the efficiency factor to overcome the desirability factor, we would have to actually issue the building permits to allow thriving urban areas to overtake some of their surrounding lower-density neighborhoods.

We've decided as a society that this is unacceptable, so urban areas will probably maintain their premium indefinitely. In a sense you're right. But only for self-inflicted public policy reasons.

> Until the claimed efficiency improvement can be translated to an actual day-to-day cost improvement

I don’t own a car, offload a bunch of concerns into City infrastructure, walk to a corner grocery store, and go from idea to meetings inside a single day, thereby letting me dance circles around competitors who have to schedule a call or flight out.

Cities don’t make sense for everyone. But they do for a lot of people. They make so much sense for enough people, that those people will pay a premium to have everything else nearby.

Energy is poised to get cheaper. Consumption will go up and mostly come from sustainable sources.

Mass transit eliminates the energy problem. Two far away cities connected to each other via high-speed rail might as well be next-door-neighbors.

Sure, between two cities. Not so useful for rural-to-city commuting.

I think we can all agree that if the costs of high-speed transit were low enough to support hubs in every city city with spokes going to all nearby suburbs, all sorts of problems would be solved.

Suburbs are unlikely to support everyone walking to the train station unless they were explicitly designed for it. You’d need immense parking lots/garages at the suburban stations (which most transit advocates oppose and are trying to remove), blanket coverage with local bus service (expensive and structurally difficult in a suburb), or to remake the local streets around bicycling. Plopping down a station without a last-few-miles solution doesn’t get you much.

Suburbs (and small towns) can implement local bus circulators for last-mile solutions to connect with central stations.

Local bus service can be helpful for the disabled or in extreme weather conditions, but rarely beats a brisk walk. They usually average under 10mph while in motion; then add 10+ minutes of 0mph waiting.

A 40 minute walk and a 40 minute train ride are both reasonable commutes, but added together are nightmarish. I’ve tried.

This is so wildly off base it is not even funny. The most sustainable forms of life is decentralized subsistence hunting and gathering or small scale farming. When civilization collapses, which it does and will, that is the only form of human life that survives. Cities rise up through political power and exploitation of the rural areas around them but they are a graveyard. Just a matter of time.

>The most sustainable forms of life is decentralized subsistence hunting and gathering or small scale farming

i.e. staying within the radius you can traverse on foot. Our oldest villages may be small, but they are unthinkably dense compared to midcentury American suburbia.

> Start with food, get a meal down to less than a dollar.

I know food prices vary a lot from place to place, but in the UK right now (at current exchange rates) you could eat for a bit over $1 per day, never mind per meal. I’ll grant you that’s student meals, a balanced mixture of rice lentils and vegetables, but it’s all your protein, vitamin and caloric needs.

1$ is 75p and I doubt that you can have a fully balanced meal on just rice and vegetables or th at you could do this for 75P double it to 1.50 maybe but wouldn't be a very good long term diet.

Rice: 3535 kcal/67g protein for £0.45

Lentils: 3530 kcal/258g protein for £1.75

Together they form a complete mix of all the important protein subtypes. Mix 9:1 because lentils have a lot more protein and rice is a lot cheaper. Scale down intake to match calorie requirements. @2500 kcal/day: £0.29 rice, £0.125 lentils.

Vegetables: 5 portions for £0.45

(Government recommends 5 portions per day for healthy diet).

Total: £0.855 per day for recommend daily male calorie consumption. £0.76 for women.

$1.13 for men. $1.00 for women. Close enough.

Seconding this. I was amazed at how inexpensive good, fresh food was in the UK when I visited recently.

But why does everyone want to move to dense urban areas? You assume that there’s some small, easy-to-offset group of factors, like public transit or “jobs programs,” and that if the government just did something with these things, it would equilibrate population dynamics appropriately.

I’m not convinced. I think people are more driven by status symbols and glamor. Living in a city is considered relatively more “high status” and a “glamorous” lifestyle. Even poor people in cities are glamorized as having greater access to sex, subculture groups, participation in civic functions like meaningfully large protests, proximity to celebrities or wealthy people.

I think it’s plausible to argue that as developed societies progress, competition between people becomes increasingly focused on intangible social status, and one side effect is that people become more and more willing to sacrifice material comforts to crowd into cities for the chance to possibly compete for higher social status.

It wouldn’t matter if you incentivized people with cheaper housing, “jobs programs,” or anything else, “Ruralness” itself would be such a direct negative thing, in terms of social convention, that people would pay to avoid it, in the form of impossible rents, overcrowded infrastructure, etc.

I conjecture you’d need a generational propaganda campaign to glamorize rural living, combined with some huge changes in how employment is structured, before anything could even start to incentivize meaningful redistribution of population to rural areas.

The jobs programs thing is especially tricky, because there is a chicken and egg problem with modern employment and rural areas. It’s not just a matter of retraining people, because they’ll still want to move to cities independently of jobs, and then employers will want to be located in cities to have high-status clans of employees and to be colocated with other high-status people.

Jobs training doesn’t really solve anything unless you change the underlying culture such that employers can participate in some virtue signalling by locating there.

It’s why you might see start-ups in Grand Rapids, MI, but you don’t see Google opening a new 500-engineer research lab there. The people who want those engineering jobs want a life with status signalling only found in big urban centers associated with cultural progressiveness.

I’m not saying any of this to argue one way is better or is right. Only that I think any theory about why people accumulate in dense cities has to be primarily based on social status effects that exist by convention and not by any material factor.

Google doesn't open a 500-engineer research lab in Grand Rapids, MI because there are not 500 Google-caliber engineers already living in Grand Rapids, MI. This is not a statement about the average talent there, but simply that the starting pool is not sufficiently large; hence the need to build offices in high density urban areas.

Google doesn't open an office in Denver so that Bay Area engineers have a slightly cheaper place to work, they do it to tap into the talent of folks who already live there.

Edit: I am basing these claims off of my own experience. I work at a satellite office of one of the big tech co's, and the vast majority of my coworkers are people who are either fresh out of a local university, or already lived here for many years before joining the company.

So Google only interviews candidates already living in the cities where the offices are? Google never relocates a candidate from somewhere else?

This is super false. Google doesn’t open an office in Denver because there is already a sufficient talent market in Denver to staff the whole place. There isn’t.

They open an office in Denver so that when a person passes the interviews and will need relocation they can be relocated more cheaply and paid a relatively lower salary in Denver.

They can only get away with this for certain cities that are granted high-status, like Austin, Seattle, Denver. Companies are trying to create similar status facades for e.g. Pittsburgh and Atlanta too.

It absolutely is wage arbitrage for the company— has nothing to do with the preexisting talent base in the given city, except insofar as that talent base confers some type of mitigating high-status effect.

For Denver it’s access to glamorized nature and skiing. For Pittsburgh it’s centralized around the presence of CMU. And even with these effects, these cities are not looked at as all that desirable for many, many candidates.

If you pass the interview as a generalist, Google absolutely prefers for people to work in their Mountain View office.

1. The cost of relocation is minuscule compared to the total cost of employing someone, so I don't buy that argument.

2. Do you have data to back up that Google engineers in Denver get paid less than their Mountain View counterparts? I believe this is true when comparing US to non-US salaries, but at least where I've worked, engineers get paid the same everywhere within the US (and indeed, you can relocate from the Bay Area to cheaper locales without taking a pay cut).

Based on salarytalk.org and h1bdata.info, median software engineer salary in MV is $127,000 - $129,000. In Pittsburgh: $113,000 - $114,000.

Relocating without a pay cut would be uncomparable, since it would involve pay cut dynamics for an established worker. Google is probably atypically generous in all these areas though, and I don’t think it counters the points about status. They want wage arbitrage to alleviate some headcount, doesn’t mean all headcount, and very likely Google would be among the least worried since revenue per headcount is so ludicrously higher than what they pay in total comp anyway. It still doesn’t suggest they open these office locations for some other reason than urban status or co-location with academic center status. Google US locations look mostly exactly like that’s what they are doing.

We are social beings. We live in a society. Being close to others is not a status symbol, it is what makes us, us. I eat at nice restaurants because the food is delicious. I enjoy the culture. I enjoy a wide variety live music. These are not status symbols, these are the essence of a joie de vivre. I enjoy walking to my local shops and boutiques, not for the status but because it is genuinely enjoyable of its own merit.

Your reply sounds like an absolutely classic reply of someone driven very much by social status signalling. Especially the whole “I don’t buy into status-seeking; I just like ‘quality’ experiences” thing — which just begs the question, where does your notion of quality come from?

“I enjoy walking to my local shops...” is the same as saying you like being high-status and commanding the existence of a local bazaar that caters to the tastes that you and other city-dwellers have glamorized.

> “These are not status symbols, these are the essence of a joie de vivre.”

I can scarcely think of a stronger appeal to status-seeking than this.

(I don’t say any of this to be critical of you. I live in a large city and am fully aware that part of why I enjoy it and identify with it is all based on deep-seated, culturally-ingrained, and even subconcious emphasis on status-seeking. I just mean that it’s so deeply woven into our lives that we don’t realize and often think we’re somehow “better” than that, which is just more virtue signalling.)

You most definitely can separate the fashionable, and status-seeking aspects out from urban culture.

I live in Canada. The traditional cuisine is bland, and fresh produce grows only a few months of the year. I see my love of sushi as a product of globalization and urbanization as much as is my ability to get decent fruit from the grocery store in the heart of winter. Sure I could have a root cellar and eat potatoes and beef all winter, but sushi is delicious.

It cannot be just status. High demand and low supply has a tendency to price the best cultural products in high status territory.

Somehow this reminds me of the history of lobster as cheap food for the poor and imprisoned. People detested it. Until of course the status of lobster changed.

Or the fact aluminium used to be extremely expensive and thus used for the most precious cutlery, ornaments etc. Until of course it became dirt cheap to produce.

Some things really are related to the ideas we hold, not reality itself. You can see this in blind tests of foods or drinks like wines, the blind ratings often don't correspond with their reputation or price.

Bourdieu's book la distinction is quite a good treatise on this topic. Taste and what we consider artful or high quality is much more constructed by our environment than by any innate or objective measure, we tend to fool ourselves on this point.

It is easier to taste the fruit of globalization and interact with a larger slice of society by living in the city.

Status plays a part but is not the primary driver behind satisfaction from urban life.

Google has a large office in Ann Arbor, so Grand Rapids was an odd choice here.

Why?

Because Grand Rapids and Ann Arbor are effectively interchangeable in the point you're making.

Not even close. For one, Waymo has offices in Detroit for obvious reasons. Ann Arbor offers direct connection to University of Michigan and proximity to Detroit and local airports.

In fact, the status effect difference between Ann Arbor and Grand Rapids is a perfect example of my point. What differentiates the two places when thinking of where to locate a new campus? Exactly status effects and network effects from secondary status effects. The talent pool in the two places and costs of living, etc., are not meaningfully different. The choice is down to what places carry a premium in status that is more attractive to workers.

>This is unsustainable

On what basis do you make this claim? I would have thought the opposite to be true.

Because people need to be located where they are most efficiently utilized in the economy.

Everyone wants to live in New York or San Francisco, but the jobs are going to be distributed around the country.

How are people going to construct a bridge in Ohio if everyone is in New York City?

Jobs are still a local thing.

If everyone lived in New York or San Francisco, there wouldn’t be any need to construct a bridge in Ohio in exactly the same way there’s no need to build one over the Onyx River in Antarctica.

Doesn't work that way, since jobs are independent of labor pool location.

A good example would be tourism, where companies draw people to places with no population.

Also, companies that decide to build a factory in the middle of nowhere to take advantage of something else, like cheaper land or electricity.

And suddenly you need to build a bridge in Ohio to get to that factory.

If those jobs are "needed" then wages will rise, and the market will solve the problem.

If wages don't rise for those jobs, then they weren't needed.

Right, and now you just raised inflation, raising prices for everyone and punishing most the poor and elderly on fixed income, since they rely disproportionately on commodity goods and services.

If you want a successful economy, you have to plan for it: find where resources are going to be utilized, and build from there.

You've increased prices for SOME goods, but you've massively massively reduced prices for all others.

Urban sprawl is extremely expensive, and the high costs on infrastructure effects the poor the most.

If housing and infrastructure were cheaper, because we've built more stuff in cities, then the poor beneift the most due to the lower housing costs (which makes up most of their expenses).

So, do people not understand that all jobs, and demand for people, aren't going to be located in a single point in space?

Why have two cities of New York and San Francisco? Why not just one city of New York?

Increasing commodity prices raises the price of all good, not just some goods, because that's how economics works. Every cost is transferred somewhere else.

So, not sure why you want to raise the price of all goods...

No, we don't need only a singular city.

But the status quo of what we are currently in is way way to far on the wrong end of thing.

So once San Francisco and new york rent prices aren't literally 5 time larger than rent prices in the countryside THEN we can worry about the issues you bring up.

But as long as rent prices ARE 5 times larger in the city, I will not worry a single ounce about the issues you brought up.

You are engaging in the extremism fallacy. It would be like if a bunch of people were in the desert, and everyone was dieing due to dehydration, and then you came along and said "Well, you know, if you drink too much water, then you can die of water poisoning! Why aren't you worried about water poisoning!?!?!?".

Yes, water poising can kill people if you drink 10 gallons of water every day. But we are in a freaking desert and people are dying due to dehydration, so why the hell are you talking about something so ridiculously as water poisoning!?!

Yah but you're raising prices on everything anyways by making everyone live in the city where they are unneeded instead of more efficiently where the jobs are.

But the problem right now is the opposite. The problem is that we MAKING them live in the countryside instead of allowing those that want to to live in the city.

Let's very much make it so living in the city is just as cheap as living in the countryside. That way everyone can decide for themselves which life is better, instead of being forced to live in the countryside, because the city is unaffordable.

Most of the jobs are in the cities already, even without the hypothetical scenario. Most developed nations are mostly service sector, and demand for services is mostly where the people are, despite remote working being possible in some cases.

(Does anyone call for new primary industry jobs these days, or is that basically robots first now, with the jobs being mostly service and some manufacturing?)

Everyone wants to live in New York or San Francisco? This is not true.

Deflation causes problems. Better to inflate wages in correspondance with prices.

It only really causes a problem if you don't prepare your economy for it. Prices should really only drop for commodity products and basics, so that one can live for $100/month. You should still offer incentives for people to spend more, such as offering higher end real-estate and products, or just bringing in more people into your economy.

I causes people to delay spending and horde rare goods (gold etc) it also has massive problems if say 90% of your populations mortgages are underwater see Japan

What mechanism causes this deflation for commodities and basics? How much of the economy is basics?

Efficiency and automation reduces commodity prices.

Just transporting food is a huge cost. Get transport costs down and you reduce food costs.