
Priced out of Paris - bergie
http://www.ft.com/cms/s/2/a096d1d0-d2ec-11e2-aac2-00144feab7de.html#axzz2WSyQOXWl
======
JPKab
My cousin is a .01%-er. My father's brother, due to a position of political
power he held in the late 1970's, met and married a woman who is an heir to an
American old-money family. (if i were to name them, you would know. If you
listen to NPR for more than an hour, you will hear their name mentioned as a
donor)

The contrast is insane, since my entire family is Appalachian coal mining
stock. She NEVER visits, so the only time I see her is by visiting her at one
of the many properties she has in the various 'global elite' cities.

She has an apartment which takes up 3 entire floors of a building which
overlooks the East River in Manhattan (in the "50's" of the street numbers,
but I won't name the street for anonymity purposes). She is almost never
there, perhaps once a year. She has an equally large aparment in London. She
has a mansion in Greenwich, Connetticutt. She rents out none of these
properties. They are all left vacant for her to use at a whim. She isn't very
educated (despite the efforts of her mother, her friends and her see little
use in education. They have everything already.) and once had a major cocaine
problem, along with half of her friends. I've met most of them, and attended
parties at THEIR vacant-most-of-the-year apartments too.

I love my cousin, but she and her friends are parasites, sucking off of
economic rent, delegating the management of their huge hoards of capital to
investment bankers in their social circles. They produce nothing, but buy huge
amounts of property on a whim wherever is "hip" and then leave it artfully
furnished, beautiful, and vacant 11.5 months out of the year.

~~~
jjsz
The old-money lifestyle is _designed_ to sit back, enjoy, and let the
investment bankers handle the rest- exactly what she's doing so they're not
parasites, they're living an elite's way of life. If you would get closer to
her she would produce a lot of good times and memories. Just because you will
travel, stay in the house and read more doesn't mean someone is going to sit
down and become an inventor / iterator like you. Her view is that the whole
world is working for her, and drugs are her way of coping with what she's
missing. What's wrong with that? A decent amount of the elites believe that,
what are you going to do- sit there and be proud of your humble life- right?
Chill. There's no point of being envious and no point for me being an
apologist but if it bothers you so much become one of her investment bankers.

~~~
JPKab
1) I'm not envious, and somehow you take my disapproval of the elites wasting
valuable space as envy. It is not. If I express disapproval at someone who
dumps toxic waste in a river, do I envy them also?

2) Your comment made zero contribution to the conversation. Do you think I
haven't hung out with my cousin and had a good time? I have. This changes
nothing. Every person on the planet is capable of "producing good times and
memories." She is also capable of taking her wealth and helping people at
levels of magnitude that the rest of us can't, yet she does nothing. I don't
envy, I observe and draw my conclusion that she spends zero hours a day
working and 24 hours a day worrying about herself. Spending 1 hour a day
running a charity would still allow her to "sit back, enjoy" and help people
at the same time.

~~~
jjsz
In some type of way you're longing for her money to change the world. I hope,
instead, you long to change her mind, convince her that she needs to start
donating. That was the point of me commenting, for you to treat this as a
reminder to call her and put your perspective down. Not in casual way, she
won't take you seriously. Throw a form of guilt, cause obviously that's what
she needs. Value your principles man. She's your cousin and she has the
potential to change herself and the world. Understand that power. I wish one
of my distant cousins were like this. Her elite world view would come down to
Earth at least once a month. Don't take it the wrong way.

~~~
nerdo
Donates to NPR, no?

------
stevoski
The article talks a lot about cities now being the domain only of "one-
percenters" and "global elite". This is demonstrably false. Consider the UK.

UK's population: 62 million

London population: 8 million

13% of the UK's population, therefore, resides in London. To say that only the
"1%" can afford London is clearly not the case.

In France's case, 15% of the population live in Paris.

Perhaps we can't all live in London's Chelsea and whatever the most desirable
part of Paris is. But both cities have excellent public transport...

~~~
rdouble
The 1% buy multiple properties in many different cities. There have been
articles about how the City of London has neighborhoods of empty luxury
apartment developments owned by various sheikhs and russian/central asian
commodities oligarchs.

In SF when you buy a house you are also competing with dozens of investors
from overseas paying cash who don't have any intention of ever living there. I
believe that the Vancouver real estate market was also affected by overseas
investors in a similar way, making it the least affordable housing market in
North America.

Multiply this speculative real estate investment by 1% of 7 billion and it
could very well be a major factor in pushing up rents, especially in certain
super desirable cities like Paris. There's about 1.7 million residences there.
Even if only 1% of the 1% want a pied a terre there, the rest of the people
trying to live there would feel the squeeze.

I have personally seen the effects of this. When I lived in on South 4th
street in Williamsburg Brooklyn in 1998, my floor through apartment was
$700/m. Now the same apartment is renting for $3700 a month. That particular
street is still a dump! The only people I know who can afford to live in nice
apartments in SoHo or Tribeca are the children of super rich people.

~~~
twic
Nitpick: the City of London _does not_ have neighborhoods of empty luxury
apartment developments, because the City of London is the one square mile of
the city where the financial industry lives. It's equivalent to the Financial
District in New York. The only significant chunk of residential building is
the Barbican, which is not empty, just awful.

The name of the city as a whole is simply London. You could even call it the
city of London if you were being poetic. But as soon as you capitalise it,
you're talking about the City of London, and that's something different.

Yes, that is confusing, arbitrary, irritating, and only justified by arcane
details of history which predate the printing press by five hundred years.
That's because this is England we're talking about.

~~~
rdouble
I actually know the difference between City of London and London because I
watched that one clever Youtube video explaining it. However, I don't really
have the details internalized as I've not been to London.

To explain what I meant, I was thinking of this article that I read about One
Hyde Park: [http://www.vanityfair.com/society/2013/04/mysterious-
residen...](http://www.vanityfair.com/society/2013/04/mysterious-residents-
one-hyde-park-london)

I had merged this info in my head with another link that someone else had
already posted, about empty buildings in London owned by offshore
corporations.

~~~
EwanG
I wonder if there is a need here for a Luxury AirBnB so that folks who aren't
millionaires could spend time in these places that are otherwise going empty.
Seems like space could be offered for less than normal rent since anything
above $0 would be a gain as long as there was a decent screening process.

~~~
dagw
You're ignoring the physiological 'cost' of knowing some filthy stranger will
be poking around your nice house. Also renting out a place means you cannot
store anything of value in the place. For many people who can afford top end
apartments in central London, those two 'costs' will be much higher than any
income they might get from renting.

Also the value of having a flat like this is knowing that when business
requires you to fly to London on 90 minutes notice, at least you'll have
somewhere nice and familiar to crash. That is completely lost if there is a
chance the someone else might be staying in your apartment when you arrive

~~~
jzwinck
If a few people are staying in your six-bedroom apartment when you touch down,
surely you can either tolerate their presence for a day, or pay them to go
away. You're right to bring up psychology, but it's more abstract: one might
trust strangers not to make a mess, or the maids to clean it up, but having
one's apartment listed for short-term rental is unthinkable.

------
carlob
An interesting phenomenon in Paris is the fact that there are still many
housing projects inside Paris proper. Which means that effectively only the
middle class is getting priced out. Only the really rich or really poor get to
stay.

In the meantime democratic representation is failing: Paris is a metropolis of
12 million inhabitants and only about 2.2 millions vote for the mayor. The
government needs to expand the municipality like it did in 1795 and in 1860.

~~~
epsylon
I live just nearby Paris (in Issy-les-moulineaux) and I do vote for a mayor,
just not the mayor of Paris. I also vote for a few local representatives
(département, canton and région). Representation isn't a problem, since many
projects are handled by the départements or région.

> An interesting phenomenon in Paris is the fact that there are still many
> housing projects inside Paris proper. Which means that effectively only the
> middle class is getting priced out. Only the really rich or really poor get
> to stay.

Access to HLMs (housing projects) is very, very complicated, with waitlists of
a few years and strict conditions. In practice there are way too few of them
to even cover all the demand (even though construction of housing projects is
required by the French law for every town of a minimum size), so the really
poor will usually stay way outside in the suburbs.

~~~
carlob
> I live just nearby Paris (in Issy-les-moulineaux) and I do vote for a mayor,
> just not the mayor of Paris. I also vote for a few local representatives
> (département, canton and région). Representation isn't a problem, since many
> projects are handled by the départements or région.

I lived in Montrouge and in Le Kremlin-Bicêtre, so I know what I'm talking
about.

Look at all the trouble they ran into when they tried to extend bike sharing
outside the Paris municipality. If such an artificial barrier were eliminated
and the first couple of rings of neighboring towns were to be absorbed in
Paris proper such a thing would never had happened.

~~~
epsylon
I don't remember any specific issues about extending the Vélib outside Paris,
but perhaps I didn't pay attention too much. Can you develop ?

I don't thing centralizing things more than they are today would significantly
improve the issues faced by the various neighbouring municipalities. _Au
contraire_ , I'm a proponent of decentralization.

~~~
carlob
I agree with the sentiment of excessive centralization in France. However what
really is happening is that things are still centralized, only not everyone
gets to vote for the mayor that makes the real decisions.

As far as the Vélib' affaire goes: it opened in July 2007 in Paris and they
announced it was going to expand to the banlieue as soon as it started.
However JCDecaux's main competitor Clear Channel claimed it was a new service
and a new competitive tender was needed. The trial dragged on for 18 months,
but eventually JCDecaux won and Vélib' was extended, but it wasn't finished
before the end of 2009, two and a half years later than in Paris.

You can read more about it in the history section of the French wikipedia
article.

------
contingencies
So in short, this guy gets paid enough writing speculative narrative-fictions
to live in Paris, but a family with decent incomes and kids can't? Maybe the
kids are the difference, or their parents - unlike the writer - aren't
nebulously attached to the great black fiscal hole of the financial services
industry.

------
mrmagooey
The story of "things used to be better" is one that apparently never gets old.

PS. Anyone who bemoans the lack of "ribald proletariat banter" without a trace
of irony is putting themselves squarely in the sights of the same banter
("wanker"), IMO.

~~~
vixen99
Good graffiti style rhetoric but no argument or pertinent observation.

------
kiba
Why is Paris really expensive? Constricted supply and high demand. Why is the
supply constricted? Because Paris refuse to build anything in the center.
That's because the center is a historical preservation district writ large. If
you build anything modern, it would "ruin" the image of Paris.

So, Paris would need to change its policy and start demolishing old buildings,
and build higher density buildings. Certainly, the rich will keep buying the
most desirable parts of the cities, but the inability for the poor and the
middle class to live in the center will be less acute.

~~~
bru
According to Wikipedia[1], Paris is the 34th densest city in the world. 5
French cities are denser, and all of them are Paris' suburbs. Only 3 non-
French European cities are denser than Paris.

Your comment lacks foundations.

1:
[http://en.wikipedia.org/wiki/List_of_cities_proper_by_popula...](http://en.wikipedia.org/wiki/List_of_cities_proper_by_population_density)

~~~
rayiner
Its relative. Paris would be even denser given the extreme demand in the city,
and with modern technology could be say the 10th densest city and still very
livable.

~~~
subsystem
I'm not sure what the point would be though. You could build all the
residential skyscrapers you want in La Defense and still be within 15 minutes
of most of Paris proper.

------
no_wave
This is transparently false - the median household income in Manhattan is
somewhere around 65k. This is high, but it is not remotely the reality
presented.

If people are being "priced out", it's by other peoples' willingness to pay
more for rent. The masochism of people moving to New York City these days
astounds me - they're willing to live in some really terrible conditions to
live in New York. Similarly, when I lived in Paris I lived in a ludicrously
small apartment with a bathroom in the public hallway. My willingness to pay
even a small amount for even that crappy setup "priced out" the potential of
combining the space with another apartment or something. What an asshole I am!

------
NatW
I'm an American ruby/python developer living in Paris. The cost of living in
Paris is comparable to living in New York City or San Francisco. In some ways
it can be cheaper. You can find affordable places to live and work all over
Paris, and you can find all kinds of ways to spend or save money in any city.

~~~
hilko
You can live in a nice one-room apartment in Berlin for about 390 euro a
month, 15 mins away from the hip boroughs by great public transport, and 10
mins by bike. What's the price like in Paris (honest question)?

~~~
pwperl
I can only speak for NYC having lived there. I paid $1100 for an apartment on
Avenue C in the East Village. In Paris, for a comparable area, I'd be hard
pressed to find the same space for less than €1000 per month in an area like
say, Belleville. Having said that, in NYC, I was making about $60K. In Paris,
I make about 30K€.

~~~
hilko
Wow. It's quite possible to make more than 60K in Berlin (in Euro's) while
paying around 400-500 for an apartment. Crazy how much difference there is
between cities.

------
julienmarie
As a former Parisian, now expatriated to South East Asia, what is the most
striking in Paris is the ratio between salaries and housing costs. Salaries in
France are not high because of the heavy taxations, which has some good
effects – free education, healthcare, etc... A 50 square meters in a really
not nice area of Paris (XIXe arrondissement) would cost around 1400 / 1500
euros ( USD 1800 to 2000 ). As a rule, to be able to rent this, you need at
least 3 or 4 times this amount as revenue, so between 4500 and 6000 euros a
month. A little statistics I like : only 3% of the french household has a
monthly revenue higher than 4000 EUR. Also the renting market is really not
liquid in France, because it is really hard to make someone move out in case
they do not pay ( it can take as long as 2 years ). So as a consequence, the
selection to find a tenant is hard ( you need people to guarantee you, and
more and more often, you need also people guaranteeing your guarantee... )...
Crazy...

------
kmfrk
This reads like an impersonation of a David Brooks and Tom Friedman column.

Can't wait for next week in which he dedicates an entire column to what his
Parisian cab driver told him.

------
jusben1369
What's obvious by this article is that large cities are in a constant state of
flux. Picking a particular moment and bemoaning or applauding the current
state is obviously a relatively futile exercise. Perhaps we should modify that
famous weather statement "If you don't like the state of your major city just
wait 10 years"

------
narcissus
While I'd love to be able to afford to live in Paris (that place is
unbelievable), so long as this 'rush back to the city' is because the rich are
sick of the beaches, I'll be just as happy!

------
datr
I don't want to undermine this piece too much as I think it is an important
issue and what I'm about to say doesn't address all of the details. But I also
believe it's an issue that will be partially solved by automated cars. As soon
as it becomes palatable to live further from the city and commute; and, to a
lesser extent, free up space from car parks, this problem will be dramatically
reduced.

~~~
dasil003
How is this any different from the endless and dehumanizing suburban sprawl
pioneered by America? Frankly, you're better off taking a train from the
suburbs in London than you will be self-driving cars unless they can solve the
congestion problem. The thing is, a lot of people want to live in the city,
because they like to, you know, live in a city, not just work there.

~~~
Thrymr
I guarantee there a plenty of people living in cities who would be quite happy
to live elsewhere if only there were jobs there. Many of those people live in
the city to avoid a long commute, not because they enjoy living in a city.

~~~
dasil003
Yes, and I guarantee you there are plenty of people in suburbs that would
prefer to live inside the city if it were more affordable. What is your point?

~~~
Thrymr
Just that what drives people to live in cities is primarily jobs, not that
they prefer living in cities. I am not arguing that is universal (plenty of
people do prefer to live in a city) but the main factor.

------
salmonellaeater
The article implies that it's a big problem for commodities to go to the
people willing to pay the most for them. Housing is just another commodity; is
it surprising that the people who derive the most value from being in a city
center (professionals in finance, law, business) end up paying the most for
the privilege?

~~~
twic
Housing is simply _not_ just another commodity. An utterly fundamental aspect
of commodities is that their production is price-elastic, and governed by
supply and demand: if demand increases, prices rise, so, supply increases,
prices fall again, and the market remains efficient.

The housing supply has very little price elasticity, at least in London. This
is for the very simple reason that there is hardly any space to build new
housing, and enormous barriers to demolishing existing housing to free up such
space. So, when prices go up, as they do every year, supply does _not_ expand
accordingly.

I'm sorry, but to brush the problem off with an assertion that houses are just
another commodity is simply to advertise one's ignorance of economics.

~~~
salmonellaeater
You're right: I chose the wrong word. My point was more about the allocation
of housing to the people willing to pay the most. I don't see why housing
ought to be special in this regard; most things money can buy are sold at
market prices.

------
tomaac
You should come to Oslo and you will have other meaning of word "expensive".

For comparison: [http://www.numbeo.com/cost-of-
living/compare_cities.jsp?coun...](http://www.numbeo.com/cost-of-
living/compare_cities.jsp?country1=Norway&city1=Oslo&country2=France&city2=Paris)

~~~
epsylon
Salaries in Oslo are much higher than in Paris.

------
rms
"Plutocratisation": Great neologism.

------
ChuckMcM
Does anyone know the property tax uplift? Basically if you're paying $1M for a
property in New York City and stay their 2 weeks a year you get end up paying
taxes for 52 weeks and consuming city services for 2, so that would be a ~25x
the tax per service rendered. Is this noticeable to cities or in the noise?

------
saosebastiao
Development restrictions can and will do that. They have been doing it
consistently for several decades.

------
kylebgorman
This would be interesting if, instead of anecdotes, it had actual data.

------
lr
Perhaps it is time for people with incomes lower (and very low assets/net
worth) to be able to deduct their rent from their income, the same way
mortgage interest is...

~~~
VLM
I don't see any point in this. By supply and demand it will just explode
prices upward, probably by about the amount deducted. So the poor will have to
do more paperwork to keep up yet are those least able to do so, and the rich
will get richer because rents will go up. Doesn't seem to be the desired
outcome.

The same thing happens with social engineering of tuition costs or health care
costs or day care costs or pretty much anything centrally controlled.

------
michaelochurch
Someone needs to publish a list of all these 11.5-month-vacant apartments that
rich people buy and that take up so much space, so that burglars can get in
when they're not there. There should be an app for that. I'm sure there are
home security measures up the wazoo, but those are technical problems.

I could never hack the criminal lifestyle-- I have enough anxiety as it is--
but there are cases in which non-violent crime is a necessary social process.

If the law won't provide the 6-month-and-1-day law that these cities
desperately need, then let the burglars do it. When legal measures fail--
clearly the Powers That Be have not shown an interest in doing the right thing
on the housing problems-- then resort to illegal ones.

~~~
epsylon
There has been actually a few actions by some local associations to squat
vacant buildings in Paris. One of the most famous of these squat was _Rue de
la Banque_ , nearby the prestigious _Place de la Bourse_ , which owes its name
to the Palais Brongniart, the old Paris Stock Exchange.

The building had been bought by a bank and left vacant for years. By squatting
it these three associations did a great thing and launched a national debate
on housing conditions in Paris. The building was bought by the city of Paris a
bit later (at a cheap price), and was converted into social housing that
coincidentally opened just a few days back (on the 6th of june). [1]

There was another famous squat, though much shorter-lived. An insurance had
left a building vacated _avenue Matignon_ (nearby the _Palais de l 'Élysée_,
where the French president resides) for 3 years. The association organized a
squat, and they were expulsed 3 days later. I don't know what has become of
this building as of today, though it seems there hasn't been any followup.

[1] [http://www.leparisien.fr/espace-premium/paris-75/rue-de-
la-b...](http://www.leparisien.fr/espace-premium/paris-75/rue-de-la-banque-le-
squat-a-cede-la-place-a-des-logements-sociaux-22-05-2013-2822769.php)

~~~
Jacqued
I am 100% in favor of these actions, not so much the squatting itself as the
fact that the city ends up turning useless offices into homes - there is too
much office space in paris, and an awful lot of them remain empty.

Also, social housing tends to drive the middle class out of the market : since
it takes up 15% of the housing space in Paris and houses people who could not
be on the market otherwise, it actually contributes to forcing the middle
class out of Paris. (Not saying social housing in itself is a bad thing)

SO if you combine : \- too much office space \- 15% of housing taken up by
social housing \- limitations on construction because the city is a giant
museum \- no extention of the city since 1860 (prices go down 20-50% when you
change the postal code from 75 to 93 \- ecological regulations that make
buildings more costly to building every other year

You get why prices have more than doubled since 2000. Paris is going to be a
city without a middle class, with only elites, upper-class and poor workers

------
davidf18
I currently live in Manhattan and I've lived in London (Golders Green,
Hampstead) and Paris (7th, 6th).

The reason why costs are rising is because of land use restrictions through
zoning and building codes that regulate housing and commercial real estate
density. In other words, politically induced scarcity benefiting wealthy
landowners at the cost to those people wishing to buy housing, to rent an
apartment, or to run a business is the cause for rising housing prices.

The answer is deregulating the politically induced scarcity of land use. The
politically induced scarcity interferes with the market efficiency that would
otherwise allow the housing to be more affordable.

This is a basic principle of microeconomics and was initially explained by
David Ricardo when he explained that the Corn Laws that restricted the import
of corn into Britain benefited landowners because it artificially increased
the cost of corn thus making the cost of land more scarce and expensive.

David Ricardo felt so strongly about this that he joined Parliament to
overturn the Corn Laws. Similarly the solution today is to deregulate the
overly restrictive zoning and building code regulations that cause the
scarcity.

Economist (and FT columnist) Tim Harford explains this in more detail in his
book, "The Undercover Economist."

