
The best cities to get ahead are often the most expensive places to live (2014) - Futurebot
http://www.theatlantic.com/business/archive/2014/11/why-its-so-hard-for-millennials-to-figure-out-where-to-live/382929/?utm_source=SFFB&amp;single_page=true
======
mattgibson
This is not a paradox, it's one of the best known axioms of economics:
[https://en.wikipedia.org/wiki/Law_of_rent](https://en.wikipedia.org/wiki/Law_of_rent)

The key driver is that land values rise when earnings rise. You can't move
land, so there is set amount of it within commutable distance of these cities.
Also, each bit is in a unique location relative to all the other bits, so
every bit of land is either better or worse than the others in terms of your
earning potential when you live there. Close to the centre = cheaper and
quicker commuting, whereas further out means more expensive and slower. Buying
or renting a bit of it to live on is always an auction, so the best bits
(where you earn most) are won by those who those who feel it's worth paying
extra to get them (because they are the ones who earn the extra income by
living there).

In this way, if wages rise, then the maximum bid that a person can justify
paying in order to live in that city rises, and therefore property is more
expensive.

This is not a free market, BTW. Land is monopoly.

~~~
chimeracoder
> This is not a paradox, it's one of the best known axioms of economics:
> [https://en.wikipedia.org/wiki/Law_of_rent](https://en.wikipedia.org/wiki/Law_of_rent)

I wish more people understood this principle, because so many superficial
economic "analyses" I see in the news completely ignore it.

By the way, you're giving the example of physical land, but the general form
actually applies to property ownership of any form. (That is, the rent on any
property will rise to be equal to the surplus that the renter receives from
it, after accounting for transaction costs. In the long run, the property
owner is always able to claim all of the surplus from the renter.)

~~~
eevilspock
_Landlords grow richer in their sleep, without working, risking, or
economizing. The increase in the value of land, arising as it does from the
efforts of an entire community, should belong to the community and not to the
individual who might hold title._ \-- John Stuart Mill

> In the long run, the property owner is always able to claim all of the
> surplus from the renter.

Which to me is what's broken about land and other natural resources as private
property. If the spirit and intent of a free market is to reward people for
working hard, for innovation, and for solving problems, then this is the
opposite. It rewards people for just sitting on their wealth. That a finite
sum of money can buy you an infinite source of income is antithetical to free
market principles.

> This is not a free market, BTW. Land is monopoly.

The only mitigating factor is property taxes, which as a stand-in for ground
rents that geolibertarians and Georgists argue for. By the way, the latter are
the more honest of the libertarians, as most other schools of libertarianism
especially the popular form continually consider property taxes theft.

I wish more libertarians understood the Matthew Effect as well as they did
supply and demand.

~~~
ethanbond
For other readers (I assume you've read it or are aware of it), I really
highly recommend at least skimming Progress and Poverty by Henry George [PDF:
[http://www.henrygeorge.org/pdfs/PandP_Drake.pdf](http://www.henrygeorge.org/pdfs/PandP_Drake.pdf)]

It's mindblowing in its simplicity and how obvious it is in retrospect.
Essentially that rent, so private land ownership, is the root cause of the
persistence of poverty despite huge growth in production and capital. He goes
on to make fairly strong (albeit polarizing) ethical arguments for the
abolition of private land ownership and so on.

Easy to read, pretty entertaining, and eye opening.

~~~
gohrt
abolishing private land ownership has problems -- who decides how the land
gets used? Ownership enables execution.

Property taxes are a way to recover some rent from the property owner, while
still enabling the independent decision making that capitablism relies on for
its productive success

~~~
njs12345
I haven't read George's original works, but his philosophy allows for private
ownership of land - it's just that the 'rent' of the land - the value derived
solely from e.g. its location - will be taxed at a very high rate.

------
nfriedly
As someone who's lived in both the Dayton and San Francisco areas, I have to
say: SF has a lot more going on and might be my choice if I were still single.
But with a family, I'm a lot happier living in the Dayton area now.

It helps that my mortgage here it ~1/2 of what rent was in the bay area (and
~1/4 of what I would have paid for a smaller place in SF proper.)

Of course, the big differentiator in my case is that with working in software,
I can work remote - I've spent more time working for California companies from
Ohio than from California.

------
Xcelerate
As someone who is trying to convince my girlfriend about why living outside
the south for at least a few years is necessary to get a good career start,
this article is invaluable. I wish it were the case, but the good jobs
(particularly technology-related jobs) unfortunately don't happen to be evenly
spread over the United States.

~~~
devonkim
This applies for jobs outside of technology, but the unfortunate part my
household is finding out is that even if you get a name brand institution on
your resume, moving to an area with very scarce jobs like most areas in the
South outside an international airport means your credentials don't matter
perhaps as much as your last name because the tier of jobs you're looking for
with a solid middle class job is the .1%er jobs of big cities equivalently.

~~~
Tenhundfeld
Your exclusion of cities containing international airports seems odd to me.
You're excluding most major cities. You're basically saying there aren't many
solid middle class jobs in the rural areas of the South. I think it's
generally true, outside of the South as well, that urban areas have more
middle class jobs.

I'm not trying to invalidate whatever experience you and your household are
having.

I'm just saying there are tons of tech jobs in the South. Many Southern cities
are in the top 25 cities/metro areas for software jobs, e.g., Austin, TX; the
DC suburbs in VA and MD; Jacksonville, FL; Raleigh, NC. And while they
typically don't show up on lists, I know first hand that cities like Mobile,
AL; Huntsville, AL; Tampa, FL; Richmond, VA; Nashville, TN; Knoxville, TN and
Atlanta, GA have healthy tech sectors as well.

I find it mildly ridiculous when people act like you can't find a good
programming job outside of West Coast / Chicago / Boston / NYC.

~~~
devonkim
All of those places have international airports except Knoxville, Richmond,
Tampa, and Alabama. My point is mostly about having sufficient population
density that an international airport is justifiable for the region, and that
spurs sufficient mass of _high quality_ information-centric jobs rather than
primarily jobs low on the capitalist value chain. To further elaborate and
simultaneously move the fence posts (but was part of my snarky intent) is that
the tech jobs that are in these places aside from mobile software are almost
always ones people on HN overwhelmingly do not want. These jobs are
disagreeable from either an ideological perspective (defense, oil) or
ambitious career perspective (industry-specific CMS apps, subcontracting
support / maintenance on legacy applications, outsourced enterprise J2EE
development, IT).

To me, the equivalent of "there's tech jobs all over the place in the US" is
"there's jobs all over Craigslist, why are you complaining about lack of
jobs?" Trust me when I say that most of the jobs I've seen outside areas with
strong tech sector presence are likely not very good "tech" jobs. There's
absolutely exceptions, but they are oases in the Sahara desert to me.

~~~
Tenhundfeld
I agree that population density is the key point. The South inarguably has
lower population density overall, but my point is there are plenty of urban
areas dense enough to have healthy tech sectors with "good tech jobs".

I live in Virginia. I lived in Alabama for a long time. I have friends who are
good, solid developers living throughout the Southeast using technologies like
Ruby on Rails, Go, Clojure, Node.js, Elastic Search, Cassandra/Spark, etc.
Sure, some are consulting gigs, but plenty are startups. And none are for
ideologically-questionable industries, unless you include NASA in defense.

My "anecdata" does not disprove what you're saying, but your statement doesn't
mean much to me when you add qualifiers like "outside areas with strong tech
sector presence." Sure, you're going to have fewer options for jobs in rural
areas, but isn't that true everywhere?

In other words, the South has lower population density overall, but it still
has areas of high population density, i.e., cities. And in my experience, the
jobs in the Southern cities are no worse than jobs in other cities. You can
find smart people using new exciting technology to solve interesting problems
all over the South.

~~~
devonkim
I think we agree overall, just some nuances and me being a pompous jerk.

The people that _make_ node.js, ES, Cassandra, Clojure, etc. are not in these
areas so much - plenty of _users_ of technology all over the world (pretty
sure South Africa has RoR users and Arduino hackers). Compared to the relative
population sizes of these metro areas to, say, just SF and NY (let's exclude
Seattle and even Boston) there is a clear and obvious _lack_ of comparable
companies like those making OSes, databases, compilers, etc. in the Southeast
(the Northwest is overweight considering how few people live there compared to
the rest of the country). Integration is pretty common, and that's one of the
areas of software that is kind of plug and chug and mostly innovative in a
business sense rather than technology. For relative population sizes counting,
we should have one company in the Southeast like Facebook, Google, Yahoo, or
Microsoft. But there just isn't. Heck, Zappos is in Vegas but they were
_moved_ there last I remember (but is Zappos a tech company? I dunno
actually).

But I must insist on distinguishing between companies that make revenue from
tech and companies that use tech to make revenue, and that this business
driver creates major differences in the distribution and attractiveness of job
opportunities available for tech folks. It's the difference between the very
typical non-tech companies that outsource all their software development for
key products to the South for cost reasons while their sales folks and
executives' families stay in the Bay Area and those that are paying $400k+ in
comp packages for world-class Javascript developers they scour from all over
the world.

I'd like to pull some hard numbers, but laziness prevails here. Searching
through jobs before in the past before I moved between the West and Southeast,
your boring J2EE job is 80% of the software jobs in software in the Southeast,
but it's maybe only 30% of the jobs in the Bay Area. The mere presence of good
software jobs (and middle class jobs) is not what I'm debating though but the
relative number, and that (the real questionable assertion to me) that this
spills over to lack of _other_ middle-class jobs in comparison that are also
related to the capitalist value chain.

~~~
Tenhundfeld
Yeah, I think you're right. You make a good point about there being plenty of
_users_ of interesting tech everywhere, but the _creators_ of interesting tech
are rarely in the Southeast. I can't think of any big players really.

To be fair to you, I was partially responding to a general attitude I find on
HN that if you're not on the West Coast, then you're clearly not a
real/good/respectable software developer – which is _not_ what you were
saying.

And I'm probably somewhat biased by the awesomeness of my little town
(Charlottesville, VA), which has interesting startups like VividCortex
(creating awesome DB monitoring tools using Golang), RoomKey (since purchased
but started here as a Clojure shop), Center for Open Science (creating
frameworks and doing cool stuff in Python), etc. And people in my circle are
committers to Elastic Search, Kafka, etc., but I acknowledge that's uncommon.

~~~
devonkim
There's a fair chance I met you at a meet-up in the DC area, which smaller
professional communities can be good for. I'm familiar with VividCortex and
met a few engineers up there at DevOps DC. When there's less companies, it's
easier to form tighter bonds and there's less chance for negative competition
like in much denser areas of competing professionals.

Charlottesville, VA is a sort of Sunnyvale, CA in my mind - it's about the
same mental distance as the craziness going on in the real urban area up north
of it, and it has some history with some access to capital (UVA / William &
Mary alumni really). Heck, I considered moving there but I consider it still
tough for local jobs without the relative drop in cost of living. Granted,
where I moved it sunk potential income harder, but the even lower cost of
living is critical when bootstrapping companies, and cheap craft beer is a
perk few areas where you can buy a great house for under $200k can claim.

------
xlm1717
Is it a paradox? It makes sense if you think about it. If you are in a city
that is very good for moving up, then you will make more money. Then
homeowners can sell their houses for more money and property owners can charge
higher rent. If you are in a city with little opportunity for moving up, then
you won't be able to afford to pay higher prices for housing, so homeowners
and property owners will be forced to lower their prices to make a sale or
land a tenant.

~~~
MadManE
I agree with this, but I don't think that it accounts for everything. For
example, my experience in Denver is that wages are below national average, but
cost of living is much higher. The consensus that gets spouted here is that
the _opportunity_ to live _near_ the mountains is great enough to offset
whatever monetary discrepancy there is.

~~~
lotharbot
Denver has traditionally been very close to the national average for cost of
living, and also has average wages (much lower on both fronts than, say, San
Francisco.)

In the last 3 years or so, rents have gone up largely because laborers who
can't find work in other cities have been able to find work in or near Denver,
driving up demand for housing while simultaneously driving down average wages.
This is slowly being alleviated as new housing is being built, but it'll be a
few more years before an equilibrium is reached.

~~~
MadManE
I guess it's all a matter of perspective. I don't think that comparing
anywhere to San Francisco yields many meaningful results, though. It's pretty
much an outlier no matter how you look at it.

I would hazard to say that the legalization of pot has more to do with these
troubles than anyone wants to admit to. It draws in people who subscribe to
that lifestyle from a huge surrounding area (increasing demand for housing and
supply of labor).

I'm not sure that equilibrium is really something that is in the cards here,
anyway. The job market is just one piece of the puzzle, and the horrific city
planning isn't doing anyone any favors.

Needless to say I'm aggressively looking for other places to be.

------
DIVx0
Minneapolis/St.Paul MN is right in the sweet spot. Tons of really good jobs
out here, plenty of reasonably affordable and interesting housing in the
sub/urban areas. Good education system, great music scene.

There are some downsides of course, the winters of course and there are some
racial social issues (not addressing here to avoid derailing thread).

With all that being said I am looking to add some good software devs to my
green field project at a very big local player in the medical insurance field.

~~~
mattlutze
It's also strangely in that sweet spot of big city that you have to drive
everywhere in. It's in the top couple good case studies of mid-20th century
American urban planning.

I mean, that light rail system is just, man. It's no wonder the Twin Cities
are (one of) the most bike friendly cities in the country -- if you're not
driving somewhere it's the only other way to reliably get where you're going
in reasonable time :)

~~~
rubidium
Except, ya know, during the 6 months of winter :)

~~~
alvern
It's even more reliable then, compared to public transit. I think we have one
of the largest winter commuting populations in the country. The down side is
the trails get plowed last, after the roads and highways.

------
jonnycowboy
Actually this is the same conclusion usually associated with richer kids being
more successful. "The best kids to get ahead are often the richest".

------
calebm
My solution to this problem was to find a remote job.

~~~
iamsohungry
That's simply not solving the problem. Yes, you get the money, but you're not
getting all of the benefits of living in a major hub. You're missing the times
you meet a valuable contact on the train, or at a house party, the free or
cheap events and seminars, the chances to see someone important in your field
and ask them questions directly. And that's not including all the non-business
benefits of living in a socioeconomic hub: good places to eat, public art,
etc.

Certainly it might be worthwhile to trade all that for lower rent, but don't
think you're getting the same thing for less money. You aren't.

~~~
trgn
I do the remote-thing from Louisville, KY. There has never been a moment that
I feel like I'm missing out on the non-business benefits. I've gone to more
concerts, plays, excellent restaurants, operas here than I've ever gone when I
was living in one of the trendy coastal cities. This is directly related to
having more disposable income.

Networking opportunities are less, certainly. There are plenty seminars,
workshops, and what have you to keep up technically, but there are no big name
companies or famous practitioners around. Few SW engineering companies, but
decent amount of industries requiring developers.

There is undoubtedly a trade-off, but I am not wholly convinced that choosing
the high cost/high opportunity trade-off is necessarily the best one.
Personally, I felt like I drank the kool-aid a little too much when living in
Sodosopa.

~~~
mackey
Do you miss interacting with your coworkers in person? That is one thing I
feel like I would miss, and I am talking about both people that I work with
directly and those that I don't.

~~~
trgn
Yes, I do. I go work on site a few times a year, for a couple of weeks each
time. That helps rekindling contacts. Frequent webcam and an open chatbox help
too.

------
steven2012
This paradox sounds like what my Canadian friends describe Vancouver BC as.

The house prices on the west part of Vancouver are more than $1.5M CAD for a
single family home, but the average salary is around $60-70k. There is almost
no real industry in Vancouver, except for tourism, and some people that work
in HQ for mining companies, etc, so there isn't enough actual high-wage
earners to afford paying those preposterous prices.

And yet the house prices keep going up. Everyone says it's mainland Chinese
coming in a driving up the prices, but that's what they've been saying since
the 1980s, so it can't be true.

~~~
herge
A system like that is very easy to counter. If residents are truly not the
ones buying property, they can simply vote for stringent renters protection,
and liberal squatting laws. That will quickly dry up the market for foreigners
buying property and letting it sit there.

~~~
eru
Land value taxes would be more useful.

------
Magi604
I spent the summer in Provo, UT (45 mins south of Salt Lake) and what I saw
impressed me. Lots of development, lots of tech companies, low housing costs,
low crime, low density. Also of the few cities in the world that have Google
fiber, Provo is one of them.

Some drawbacks: only a little public transit infrastructcure, community has
high percentage of mormons, strict laws on drinking.

Overall though there's a lot to like about it. If I had the money to invest in
real estate, I would be looking in that area first, since I suspect that the
place will boom within the next decade.

~~~
shostack
I wonder if a boom would bring a change in some of the issues that many people
find less desirable (ie. drinking laws).

Part of why the Bay Area sees the demand it does is not just because of jobs,
but because of the combination of great weather, great food/drink, lots to due
in the area, and a highly liberal bent.

Those things would likely outlast any sort of future tech bubble popping (if
we are indeed in another one).

------
jrsnyder
The "Top 10 Cities for Social Mobility, Ranked by Affordability" graph
suggests that the affordability drop is extremely sharp, but as we can see
from the "Percent of Homes Millennials Can Afford vs. Social Mobility" graph,
Absolute Mobility remains fairly steady for a number of cities beyond the top
10 cities. Cutting off at the top 10 makes the affordability vs mobility
tradeoff seem more severe than it is.

------
harpagoxenus
Would you expect the same pattern to be prevalent in other international tech
hubs such as Berlin vs. London or Tel Aviv, for example?

------
rwhitman
I would love to see a much more granular look at the data.

Particularly another source that maps affordability against social mobility to
see if there are smaller communities that sit in the sweet spot but were maybe
too influenced by proximity to another market. But maybe just the original
data sets. Curious if anyone has some tips on where to find that?

~~~
maxent
The first author of the original cited work makes some of the data available
on his group's website: [http://www.equality-of-
opportunity.org/index.php/data](http://www.equality-of-
opportunity.org/index.php/data)

~~~
rwhitman
Very helpful, thank you for this

------
r-w
The third chart should have been a scatter plot, not a sorted line graph—which
isn’t actually a thing, since you’re just plotting scatter plot data sorted by
one variable and not the other, and connecting the dots for whatever reason.

------
humbleMouse
I live in Minneapolis right now and we have tons of jobs and the cheapest
housing ever. The graph is true!

~~~
istorical
Can you tell me any names of companies to look at for applying or
websites/resources/organizations where I might find names? I'm interested in
checking the city and its opportunities out.

~~~
humbleMouse
BestBuy, Allianz, Thompson Reuters, UnitedHealthGroup, Optum, Cargill, 3M,
Target, Oracle, Wells Fargo, USBank.

Also check out the Nerdery. They are hiring, based in Bloomington.

google "minnetonka minnesota companies" for more. All of the big ones are
either in minnetonka, hopkins, eden prarie, or downtown minneapolis.

------
jwmoz
Stop using "Millenials" in titles.

~~~
sprkyco
Can you suggest a better term that would enable a speaker to convey a
generally identifiable demographic?

~~~
mjevans
Postgrads

Youth / Young workers

Entry level? (Though I still don't see enough of this to actually feed the
demand for experienced developers of X).

