Housing costs, which are proportional to average population income, force us to compete in a Red Queen's race - everyone's earnings have to catch up with others'.
If you're not tied by an employer, then you can be way more flexible about how you spend your housing budget
Yes, it is cheaper to live where fewer people want to live.
But, usually, there are reasons fewer people want to live there.
It’s hard to explain how good life is when you live within walking distance of friends and can spontaneously decide to go to the cafe for breakfast rather than having to schedule an event days in advance so people can transport in.
Some of the types of people we desire to be around aren’t going to be in those areas. If you’re into tech but live around a bunch of troglodytes - you’re not likely to make many friends around tech subjects. If that’s your passion and you want friends who share that passion - gotta move.
Some people have incredibly low standards (anyone will do) for friends and lovers. Some have high standards (very few will fit). If you live in niche small towns/villages with little in common - it’s gonna be rough to be someone with high standards.
Moved to the city and some of my friends live here while the others have very easy public transport to the city from their houses so now I meet up with friends several times a week. Often they don't have to travel at all and just walk from the office to my place after work.
For me it's been life changing.
Yes, one is that a lot of people want to live there. That one's inevitable though. Some places are more desirable to live than others. I don't want to live in a small town with nothing to do.
The other factor is when a city refuses to build sufficient housing. This one is not inevitable. It usually comes about due to entrenched interest in the value of existing housing. For instance, north San Jose has built no new housing in a decade, despite a well known housing crisis.
I hope there are some among us who (cf Carnegie) might view building the equivalent of libraries as a positional good?
Personally I opted for no car even though I can easily afford it. It’s a huge amount saved and honestly the lifestyle of walking to places is nicer anyway.
Your increase in rent would have to be over $200AUD/week to be more expensive than owning a car. Not to mention the fact you benefit from living in a much more desirable area and everything else that comes with.
I live in an exurb of a major US metro on the East Coast. It's hard to compare costs directly as I own a house but anything remotely equivalent in the city on public transit lines would be much pricier. As for desirable? Well I have forest trails right out of my house. Don't care that much about walking to cafes and restaurants.
A 1 bdr condo in my city would cost an overall ~$4000 for a really old condo in a shitty building, and there's <9% of people on record in the country who'd be able to afford that without a ton of pressure, and the only people I know that own anything more than that absolutely couldn't pay for it without renting our all of their rooms.
I guess it's still proportional in the sense that eventually renters will literally just have no money left
You are right that prices are raised by what people can afford but we need to be specific and say, which people?
No one forced them to pay more than the minimum for housing.
Not all land in a given area are equal in their attribute and there's fundamental scarcity in desirable lands. The richest presumably purchases houses in locations that has the most amenities, while everybody scrambles for the rest.
Which is not necessarily a bad thing, it is very well possible the lower priced housing has unacceptable attributes, but that leads to different causal factors.
It is also determined by housing supply in a given location and transportation policies, how we decided that homes are investments which increases exclusionary NIMBY behaviors.
It is not merely 'desire to have more' than the other that determine the cost of living.