I've seen quite a few takes suggesting NYC will be transformed by the sudden arrival of high earners, like the Seattle city councilors who went to NYC to warn the city about their mistakes.[1] Whatever Amazon's merits, the specific arguments seem ludicrous.

Seattle lawmakers talked about how Amazon took up 20% of the city's office space. That was 45,000 workers in a city of 730,000 (6%), and a metro area of 3,800,000. NYC was looking at 25,000 Amazon employees against a city population of 8,600,000 (0.02%), and a metro population of 20,300,000. This claim looks similarly awful. NYC and Seattle have surprisingly similar average salaries ($69K), but the relative impact of 25k workers earning double that is 1%-5% as large in NYC. Manhattan is already the highest-earning county in the entire nation, so much so that adding Amazon employees there would bring down the average salary!

If anything, what I find wildest is that NYC has kept its housing prices halfway sane. It's wrapped around a river and a bay, half on an island, in the middle of an area so urbanized it inspired the word 'megalopolis'. A huge fraction of its development is pre-automotive, so transport in and out ranges from 'tricky' to 'crisis'. It has the highest-earning county in the country, which is also one of the highest wealth-throughput areas in the world.

And so the median house price there is... perhaps 20% higher than Seattle's, despite 4x the population density? Manhattan prices are at the same income multiple as Seattle and the rest of NYC? What the heck? It's not that people don't know Seattle housing prices are excessive, and the boom is pretty recent, but I don't understand why it's viewed as a narrow issue of wages and population growth. Whatever raised those prices, they still point to something seriously wrong with the way things are functioning now.

[1] https://www.theguardian.com/technology/2019/jan/07/seattle-l...

What a lot of people don't realize is Manhattan in 2018 still has less people living in it then it did in 1950. The massive immigration of young working people in the 1920s led to large scale development high density housing.

Living costs were out of control and people lived 8 to a room in extremely unsafe tenements but the upside is the city's housing and transportation infrastructure was built for a capacity it still has not yet claimed back today.

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

This is a really interesting point, thank you.

I hadn't realized NYC's population as a whole was only up 300,000 since 1950, either. Maybe most interesting, the 2 boroughs that gained population are larger (combined) than the 3 that lost it, and even today Queens and Staten Island have the lowest population density. The metro area has grown massively, but for the city proper it looks like not only has growth been slow, it's been steadily evening out density.

I wonder how this has played out elsewhere; are there patterns of outcome (and relative unhappiness cause) for population spikes/declines and for lower, prolonged levels of excess demand?

I've found that people the Bay Area at least often don't have an intuitive grasp of the scale of NYC. Something like they think that a borough is more like on the scale of a neighborhood, like the financial district is like Manhattan or Brooklyn is roughly like the Mission.

That has more due to the local zoning law, I don't think Seattle housing would be this expensive had there be more high rises like NYC.

> SF's issues aren't caused by swanky new jobs, they're caused by NIMBY politics.

A fun stat I just learned: Seattle's population density is 13 people per acre, but its parking density is 29 spaces per acre. Complaining about too many high earners and too much migration into a city seems like a pretty hostile place to start when there's still room to have two parking spaces for every human.

New York definitely has an affordable housing issue but a vast over supply of luxury housing (a lot still going up to) that I'd imagine a good portion of these hires would be taking up.

In what sense is there an oversupply of luxury housing? Are there lots of vacant luxury units?

The number of vacant apartments and the number of apartments listed for sale/rent are both at an all time high. Despite this, most new construction is priced at the high end of the market. In addition, there's been a big boom in ultra-high-end multimillion dollar apartments.

https://www.6sqft.com/nearly-250000-nyc-rental-apartments-si...

https://www.nytimes.com/2018/03/16/realestate/brooklyn-devel...

New construction of expensive high end apartments help lower the prices on other units. Wealthy people will move there rather than driving up prices on dilapidated brown-stones. Its kind of how the average new car price is 30k, which is off limits for many Americans. But the new car inventory drives down the price of older models.

The problem is likely more rooted in wealth inequality. As a smaller group of wealthy individuals control a larger portion of the nation's wealth, they will inevitably acquire all sorts of investments (stocks, real estate, etc) driving prices up.

If there weren't luxury multi-million dollar apartments to buy, they'd be buying the brownstones anyways. And given that the multimillion dollar units sit on the market far longer than the more affordable housing stock, is there even really high demand among the wealthy to own premium housing?

Luxury housing gets built because it's the only thing that's profitable to the builder once you take into account zoning and permits and regulations that need to be satisfied in order to build. What we really need is relaxed policy that allows for the profitable building of run-of-the-mill, average housing.

Wealthy people are less likely to stay put in one place I think. Thus, there's a demand to rent multimillion dollar units for 1-3 years at a time, but not necessarily own one.

Poor or average people buy a house in order to save money on rent. Rich people don't care about that amount and can easily get their stuff moved with company money. They recover the rent vs mortgage cost via increased flexibility.

With a few exceptions new construction is high end.

There are a few areas that were designed as slums from the beginning: Lower East Side in Manhattan, parts of the West Side in Chicago.

Taking Silicon Valley, if 25,000 high end apartments were built, that would take a lot of pressure off low end, because well paid people wouldn't be taking them out of desperation.

> In what sense is there an oversupply of luxury housing? Are there lots of vacant luxury units?

Short answer, yes. If you're interested in detailed information about NYC housing, I definitely recommend checking out the Housing and Vacancy survey data (https://www1.nyc.gov/assets/hpd/downloads/pdf/about/2017-hvs...)

There are a lot of vacancies and nearly unheard of concessions being thrown out there. A ridiculous amount of construction as well. If there's prolonged weakness, concessions eventually turn into rent decreases.

https://ny.curbed.com/2018/4/12/17227574/new-york-rent-marke...

All of that seems good and necessary - given that the median net effective rent is still over $3k/month in Manhattan, and that there's apparently room to profitably continue building, it sounds like things are headed in the right direction.

Its a great example of how just building more housing isn't a complete solution, because all builders are going to target the top of the market if they at all can.

No. The price of housing is not determined by the builder. Like any good its price is driven by what people are willing to pay. Here in SF, even 230 square foot studios are considered "luxury housing" because the shortage of housing is that extreme. Any new construction commands a premium over old housing. In effect, restrictions on building more "luxury housing" restricts the construction of most new housing even if it is high density.

Building more housing, and giving incentives to build as much housing as possible is indeed a complete solution.

Tell that to china https://news.ycombinator.com/item?id=19171099

They have something like 65 MILLION excess, unused apartments, almost exclusively targeting the luxury market (because they are created and valued as investment first, housing second), and they still have extreme affordability issues.

Building more housing is absolutely not a complete solution.

Much of those houses in China are not built in desirable cities but in ghost town that have little to no people living in them. There aren't million of chronically vacant units in Shenzhen. One could just as easily point to vacant houses outside Detroit.

Housing isn't just about the number of houses in a given country. It's about having available housing where the demand is growing.

I really don't think it's fair to compare China's housing policies to the United States' policies as they couldn't be more different.

Of course there are differences, merely pointing out if building more housing, even building more housing to an almost comically absurd extent solved affordability issues by themselves, China wouldn't have them.

I still don't see your point. No one acts as if housing supply is a magical fix-all to affordability. Almost all housing issues in America are caused by multiple factors and New York is no different.

They target the top because the regulatory environment is such that it’s too costly to target middle and lower range properties. In places like Houston, there are tons of “normal” places being built. With land prices in places like New York and requirements to subsidize “affordable” units within the building, that necessarily means the market rate apartments have to be much more expensive to compensate. In Houston, there is no such thing as “affordable” set-asides because their isn’t a need for it. Houston also doesn’t set aside thousands of acres of prime land as “open space preserves” like they do in the Bay Area, further constricting available land. We can debate the quality of life value of “open space;” it would be a fair debate, but you can’t have lots of available but politically unbuildable land while simultaneously lamenting the lack of affordable housing.

A high paying job doesn't mean alot when a pack of cigarettes are $15 and rent is $4K a month. The issue with NY is the HIGH cost of living. You can only eat $1 slice pizza for so long.

>NYC has easily 10x the number of high-earning jobs as SF, no matter how you define high-earning.

Well it does have 10x the population so you'd expect around 10x the number of high paying jobs.

True enough, and the two cities actually have similar average salaries. But Amazon wasn't proposing to bring in 10x as many workers to NYC as Seattle; they were proposing a bit over half as many. In both wealth and space, one Amazon office is just a far smaller deal in NYC than Seattle.

The more controversial part is whether that just means "less effect", or can actually change the role played. I'm very much in the second camp. The conflict here is not so much over "good or bad" but timeframe; rising demand helps cities and raises the standard of living for residents, but demand shocks can destabilize people and produce housing shortages even under good policy. Seattle saw 18% population growth by migration in a decade, with Amazon staff becoming 6% of the population, and housing prices rose about 80% in seven years. That sort of disruptive change just isn't on the table in NYC.

Simply the rate of change/growth, and the pressure it places on cities and long-time residents, are valid reasons for caution.

You imply that these issues are easily solved, if people like NIMBYs "simply" change their mindset. But history shows that mindset-change is a slow and stressful process.

Cautionary tales are a chance to study such issues, and find solutions, or at least strategies -- something that govt is usually bad at. Not blame the victims.

How is it putting a pressure on long-time residents exactly? New York is always changing it's a very expensive city to live in and it's getting more end more expensive. That's how it is for us living here. Everyone.

I don't see the argument in what you are saying.

In Chicago I saw first hand how it turned the Mayor into everyone's favorite punching bag:

Housing prices go up. Developers move in and scoop up desirable properties, remodel the kitchen, paint it grey, and sell to a young tech worker for 3-4x what they bought the property for or demo a 100 year old beautiful greystone and put up a modern shipping container on stilts with 8 apartments and no parking.

Property values go up, long time residents are getting older. The ones who CAN move sell first and you get a runaway housing bubble. The ones who CAN'T move? They're on a fixed income. They need public services but they can't afford more taxes. Property taxes go up. Sometimes older people on fixed income can get a freeze, but taxes go up anyway. More people, more services.

People don't like taxes going up so either you put it off as long as you can while services atrophy and you make it the next guy's problem, or eventually schools start going bankrupt. Teachers go on strike, not enough police, not enough money to keep up transit and infrastructure, and you've got a lot of upper middle class people living in a very expensive post-apocalyptic hell hole.

That's Chicago.

Many long-time residents are renters, who get pushed out. Isn't New York over 50% renters?

People see and fear gentrification. Granted, it can't be stopped, but it shouldn't be ignored.

This is exactly the kind of thinking that makes no sense.

First of all the prices have gone up long before Amazon came in that's just how New York work them moving in will affect housing prices NOT renting prices.

There is no way you can spin this in favor of the local politicians. They just cost many of their fellow neighbours 25K jobs many of them high paying which is important in New York.

I'm trying to explain the mindset and circumstances of people who relate to a "cautionary tale". I like to understand what makes people think the way they do, vs simply calling them batshit crazy.

If such people truly have enough power to quash the NYC deal (I'm not convinced they do), then isn't it worthwhile to figure out how to allay their fears? Do they have a shot at the new jobs? Do they have the necessary skills? Is training being offered? Will their schools become overcrowded? Is rent control adequate? Will their unit be upscaled or bulldozed?

Most humans are adverse to change, so the rate of change is also a factor.

I understand their mindset and circumstances, I live here. It's the same mindset that you see everywhere in the world and I have lived a lot of different places. People don't' like things to change and sometimes they have the political power to ensure that doesn't happen and it turns into this or NIBYISM or neighborhood battles.

It's really that simple. You don't need to turn them into victims or anything like that to explain it.

There is nothing new about the rate of change with regards to Amazon. Had it been another company you wouldn't even have heard about it and it would have been installed. It's purely political opportunism.

All that is left is that these politicians cost new york 25K jobs. That's it.

> SF's issues aren't caused by swanky new jobs, they're caused by NIMBY politics.

What are Seattle's issues, caused by, then? Because if you look at the Seattle city skyline, you'll find it absolutely covered in cranes. This town of 700,000 people, in a state of 7 million people, has more active cranes then any other city in North America.

It's a construction free-for-all here. And I consider that a good thing - but clearly, its not enough to keep me from having to step over human shit on my way to work.

We also have no rent control, no proposition 13, we aren't surrounded by water on three sides, and our suburbs are actually developing - so you can't blame those boogiemen, either.

But we do have an explosion of incredibly well-paid tech professionals... With the only thing trickling down to normal people being rent increases.

Rents have been doing better over the while haven't they?

Still have a massive shortage of housing to buy. :/

Growth of the average has slowed, but rent for lower-end units is growing.

Growth in housing prices has slowed, but at this point, the only homes normal people can afford are an hour out of town - North Bend/Everett/etc.

And, even if things magically get better tomorrow, the lower class has gone through a decade of pain to get there.