Hacker News Reader

Comment by epistasis | Hacker News Reader

Many of those suburbs mostly exist as a way to hoard wealth; high earners depend upon the city in order to gain their income and wealth, but use small enclaves to make sure their taxes do not get shared evenly.

So in that sense, they are net negatives in that they cause greater inequality. And inequality lessens the economic efficiency of capitalism and markets.

View on HN

Exactly. In Austin, there are the "cities" of Westlake Hills, Rollingwood and Sunset Valley, each with a couple hundred to a few thousand people, that exist just so their residents can take advantage of all Austin has to offer without actually paying for it. Sunset Valley is a neighborhood of just over a square mile that is completely enclosed by Austin.

Wow I just looked up Sunset Valley, population 700 and a median household income almost double that of Austin. They get fire, EMT and education services from the larger Austin area, but provide their own municipal police. Obviously all this requires a mayor and 5 city council members to manage.

There is even an enclave within the enclave that carves out a single medium density housing complex. Can't have the unwashed masses using any of THEIR community resources.

They outsource and pay for the Fire and EMT services they receive, not sure on education but would stand to reason that it is passed through as well.

https://www.sunsetvalley.org/home/showpublisheddocument/8/63...

Take Silicon Valley as an example. What exactly does San Francisco offer to the valley? The tech industry developed in the suburbs and the city later got the benefits. Northern VA and DC have a similar relationship. Virginia did all the investment to attract tech companies to the area; DC is getting the benefits because young people enjoy living in the city. In the DC metro area, most of the GDP base is outside the city. Same for Atlanta.

Some cities, typically pre-war ones, are an exception, like New York or Chicago. But many pre-war cities (Baltimore, Philly, etc.) are carried by their surrounding suburbs.

>Virginia did all the investment to attract tech companies to the area

Aren't these tech companies all there to do government services contracting? Seems more like DC is providing industry / jobs to Virginia

No. And you can’t credit the federal government to DC, as the federal tax base and governance is almost wholly distinct from the municipal one. Say Rockwell builds an office in Reston because of good Virginia schools and the availability of Virginia Tech and UVA grads. Virginia builds the roads that get workers there, and the schools for the workers kids. If the office works on a federal contract, the Pentagon awards it (which is in Virginia) and the taxes that pay for it come from Michigan and California. DC doesn’t have any involvement, other than being the metaphysical locus of the federal government.

Silicon Valley was founded on defense contracts, so you are correct that the peninsula suburbs is not exist as ways to hoard wealth gained from a larger city. But Silicon Valley is very unique in that regard compared to the rest of the US.

Just like any business if you want a kid to get a good education, live in a school district that is growing.

Don't worry. I'm sure even the people hoarding wealth in affluent cities are still paying 40% of their income to fund rent seekers and their mandatory services.

Reply on news.ycombinator.com