Comment by nickstefan12 | Hacker News Reader

Comment by nickstefan12 | Hacker News Reader

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Your analogy is logically sound, but it doesnt match what I've seen in reality. I think the extra factor is that rich people seem to attract more rich people. That is the number that I think can't be out built. The rise in prices attracts more of them. Or rather, the fewer poor people around tends to mean rich people find it even more desirable. In practice, no government or real estate boom can out build this network effect of rich people attracting more rich people who eventually decide they like things the way they are. Not just real estate, but everything about the place. And they now own it, so its not that crazy to imagine they get to decide this. Im not morally in support of it, just stating history.

Rich people are especially into "knowing the best", whether its vacations, cars, and yes, places to live. Thats what I meant about them wanting to come buy stuff in your town even if they don't currently live there. And the data kind of shows this. California has an outflow of poor and and inflow of richer.

Basically, desirability is inelastic. California has better weather than a lot of places. The only people who can pay up the vertical inelastic curve are rich people. There are a bunch of them who want to move to your town from elsewhere.

> I think the extra factor is that rich people seem to attract more rich people. That is the number that I think can't be out built.

That isn't a real problem though. If people are coming who actually want to live there, let them. There are zero cities in the world that are entirely covered in buildings the height of the Empire State Building. Every time you sell a housing unit for more than it cost to construct, you have that much more money to construct more housing with.

The actual problem is that the existing residents pass zoning regulations preventing high density new construction, because they know it would reduce housing costs, but once they live there their housing costs are fixed and what they're worried about is increasing their property values.

You may argue that the solution either way is to build more, but I think its important to take problems on at their source. The debate about supply and demand just seems to be the wrong level of abstraction when there's a more sociological root cause for pulling up the ladder.

> "Or rather, the fewer poor people around tends to mean rich people find it even more desirable."

If we don't address this, it will be impossible to convince people to build more, no matter how blue in the face people get about supply and demand charts.

> "Or rather, the fewer poor people around tends to mean rich people find it even more desirable."

But why is that a problem? It's like complaining about free money appearing out of thin air. If every rich person in the entire world wants to move to your city, that's really good. It would be a wonderful tax base. And there are a countably finite number of rich people, so there comes a point when you have literally every last one of them.

Having to build enough housing for every rich person in the world is ridiculous, but the reason it's ridiculous isn't that you couldn't physically do it (if there are a hundred million rich people, that's only a single digit factor more people than live in Beijing or Shanghai). It's that they would never all move to one place like that -- especially because every other city would be competing to keep them.

And if density is actually such a wealth magnet then every city should do it. Then the outflows and inflows would net balance and there would be no net migration of rich people to any city in particular. If you somehow got more than someplace else, what are you complaining about? Build even more housing to see if you can get some more, then go spend their money on your roads and schools.

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