Housing Rant (Part Infinity) and the Economics of Hookups

I am on an on-going rant about housing prices (take me out to lunch and I will rant gratis). Today again, we have an article in the New York Times talking about a housing "glut" in Brooklyn, due to the construction of thousands of new units in Flatbush.

Glut is a political word. It means that there is too much of a resource, and implies that the price of the good will eventually be priced below the suppliers cost. A glut in the oil market means prices are "artificially" low — even though such prices are clearly good for nearly every consumer in the country.

Maybe that language makes sense in the oil markets where oil companies, particularly those who frack in

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Is San Francisco Too Expensive For Startups?

There is a growing international understanding that cities have become too expensive for the people who live and work in them. It is an affliction across the United States, but also around the world as well. Just take some recent coverage of the issue:

  • Vancouver has been one target lately, with home prices rising to an average of C$1.3 million. Unsurprisingly, many workers are leaving, decamping for other nearby cities in a bid to try to lower their housing bills.
  • London has experienced an almost apocalyptic increase in housing prices, driven by Russian and other oligarchs moving huge dollars into the city’s real estate market. Rowan Moore shows in his book Slow Burn City just what the cost of that situation has
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The Housing Paradox

Yes, I am on a bit of a housing rant these days, what with rents increasing rapidly.

But as a venture investor, it pains me to see the prices of housing in relation to nearly every single good and service we offer in the economy. Nearly everything today is faster, better, and cheaper than before. Computers that once took up entire rooms to calculate a differential are now sitting in our pockets, and cost less than $1,000 to boot. Content has gotten to the point where the marginal cost is vanishing toward zero. Even taxis are getting better and cheaper!

Then you look at housing, and suddenly all of this progress -- all of our dreams of the future -- seem to have stopped.

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The Radical Idea of $1000/mo Rent

The Wall Street Journal had an article today talking about the plight of people with six-figures unable to rent in cities like New York, San Francisco, and Cambridge, Massachusetts. Simply put, rents have increased far faster than incomes (in many cases, by more than 2:1), and that means that access to these cities is increasingly limited to an extremely small fraction of the population.

We have heard about lowering the rents, and programs like the one featured in the WSJ article that involve middle-class lottery allocations of rent-stabilized apartments.

Yet, we never really hear about the need for a much more radical approach: to simply do whatever it takes to drive costs of housing down to $1,000 for a one bedroom in rent,

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