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Why Don’t People Who Can’t Afford Housing Just Move Where It’s Cheaper? (nytimes.com)
53 points by jpm_sd 10 months ago | hide | past | web | favorite | 81 comments

Family/friends. Real-life social network/support often outweighs the gains of moving somewhere cheaper.

Having a support network of any kind is something very difficult to weigh economically; but it is invaluable at the same time.

If you've ever helped your friends move or have had them help you, you can weigh the economic benefit very easily.

Not only does it strengthen your friendship, but it takes the profit margin of a moving company out of the equation - that's the economic gain your group gains (even after you buy your friends beer and lunches - you should still be in the plus)

Because places where you can buy a house for $75,000 have jobs that pay poorly. I can't afford a 3BD detached home in the city limits of Vancouver, but I sure could move to rural New Brunswick. If I wanted to be bored to death and suffer through the winters.

Exactly ... it's a trap, moving somewhere cheaper for reasons of saving money.

How would that explain why probably upwards of 95% of people moving to the west coast (and trendy cities in general) have no family there, and likely no meaningful friend group or social networks there either?

The vast majority of people I talk to piling out west have no connections here whatsoever.

How many of them had strong connections and opportunities back home? How old are they?

I could move to rural Texas and live like ... well, better, maybe ... but there's no opportunity there, I'd make about a quarter of what I do now, if I could even find a job I wasn't overqualified for and not know anyone.

If I moved to the West Coast, I could up my pay, maybe, but that's about it. I'd still not know anyone.

All that stuff plays a part the older you get.

Bingo. The potential support amplifies for those that have (or are planning to have) children.

Similarly, people don't move to countries in southeast asia and live like kings. When asking "Why people don't just move", should ask the self "Would I move to southeast asia?"

Moving to a cheap tropical paradise sounds pretty nice, really.

But for anyone who has looked into it, you learn the visa situation is a nuisance. They don't want foreigners longer than a vacation.

Indeed. Many people fail to realize or acknowledge just how valuable those things are until they lose access to them.

yeah. an article that makes you say "duh" i guess i should have known that.

Precisely, the network effect is real.

I wonder about this often, but not about in California

Based off this article about hookworm being alive and well in Southern Alabama. https://www.theguardian.com/us-news/2017/sep/05/hookworm-low...

In the article, there is a woman without a sewage hookup paying $611 for her mortgage, and $300 for electricity.

In the city of Atlanta, and much less, some of the suburbs, paying $900 for a single wide's square footage for a house or apartment is entirely possible. This woman doesn't have much family that's not staying with her, etc.

The other logical frustration from this is that density solves a lot of problems. From cheaper insurance, heating/cooling up to 5 fewer walls, to shared sewer connections - an apartment solves a lot of problems compared to a trailer home.

Not sure what 'My friends front following' means, but

> Maybe people want to live in their own place, not an apartment.

isn't that the point of the article? people living in high cost cities cannot afford their own place?

As a divorced parent, moving to another city would mean losing access to my kids. That definitely weighs into my consideration. With the number of marriages ending in divorce, I wonder how common this situation is and if it also plays into the equation for them.

This definitely comes into play, I know several people who want to move or relocate but their ex can't/won't and therefore they're stuck in place.

I live near the beach in San Diego, where house prices are pretty damn high, so my wife and I still rent. On the weekends, we ride bikes or walk to the beach and hang out. It's how we like to live our lives.

I've been to a lot of areas in the country, and I simply don't want to live in them, regardless of price. I can walk outside in a t-shirt 365 days a year where I live and not die from exposure in a few minutes. I have no need to shovel snow. I am surrounded by mountains, the ocean, forests and desert are a few minute drives away.

Plus friends. And family. It's also nice living in a place that people want to visit, old friends pop in all the time simply because we live where people want to vacation.

Living in a large house with land next to farms and skiing mountains in an interior rural state, I have different priorities then you.

But you hit the nail on the head: most people like to live in a place with temparate weather, scenery, and things that only come with population density. So most people want to live in the same place, despite (or even indirectly because of) other people wanting to live in the same place too.

Cheaper does not always mean a desirable place to live. This question somewhat assumes that all places to live are created equal.

As someone who lives in an uncool but vibrant metropolis, I think people from more well known coastal cities vastly underestimate how much... world there is out there.

I know many Californians would shudder at the prospect of moving to Houston, but it's actually a progressive, vibrant place with lots of cool stuff to do. Don't like Houston? That's fine. There's a hundred other cities to choose from.

What's that fallacy where you overestimate something's value because you paid a lot for it?

To be clear, I think anyone living in the Bay Area must be nuts. But, then again, I think anyone living in big cities is nuts. Give me fresh air and neighbors you can't see any day.

I'd say it is a bit of a gold rush.

There is tough a certain point where things become vastly more difficult.

Here in Poland it is below 200k people of working age apparently in roughly 50km radius. Less than that, bigger business doesn't want to invest, educational opportunities, work opportunities, transit suffers etc.

Sunk cost fallacy maybe?

Strange how it’s only people who already own a house who suggest this.

Strictly speaking, it isn't - it's easy to find stories of people who moved somewhere cheaper because it was cheaper. Lots of people suggest and do it.

But it's much much much easier to do from the middle than from the bottom.

People without housing who are not moving already know the answer.

It's a lot harder to pick up and move if you have a mortgage vs. renting some place.

Yes, but if you have a mortgage and have been there for a long time, you're probably sitting on a gold-mine. i wonder if bay area residents ever consider how much money they could make if they just picked up and moved some where else. I bet many of their houses (or the equivalent amount of equity invested in rent ROI optimized houses) could out-earn the people living in them, if they bought more than 20 years ago.

It's not like that in most places. I bought my house at the right time and it's only increased in value maybe 50% in nearly 20 years. I mean it ain't nothing; it beat inflation, but tack on the interest and I'm probably negative. At least I have equity built into it, which I wouldn't if I had opted for an apartment for 20 years. Most houses only make you rich in the fact that you own something after all the years of paying for shelter.

Being able to remote 100% of the time is not as common as people want to think here.

A lot of managers aren't comfortable with that notion, and basically ignore you when you make the case that a position is essentially impossible to fill when just letting it up to local market for labor.

Why would you want them to? A city consisting only of people who can afford $1.5m mortgages is missing most of the amenties and services you rely on and value. They only function in San Francisco today out of inertia; their ability to hire and retain staff is plummeting.

Everyone I know hase gone through a "power-saving" phase at least once in their life, typically on the path towards buying a home. This is inherently a period of austerity for the individual, or, as the article describes, "great discomfort".

If you're going to be depriving yourself, you may as well do it where people are getting paid the most, and just live like an itinerant/vagabond while there. It's the high salaries and abundant opportunity that attracts all the well-paid housing seekers. Join them, just don't bother with the housing, and watch your savings blow up.

You'll probably learn a bunch about yourself and how to live simply in the process as well.

I'm actually someone who's very much a fan of power saving then retiring early.

Indeed, if I were to make a good salary in Silicon Valley and move to another metropolis, the math would work in my favor. But what if I found a partner? What about my friends and networks over there?

Retiring to a city where I didn't know anyone would suck.

Affordable housing is a symptom, not an issue. The basic issue is that living in a nice city falls prey to basic supply and demand curves.

The unit of supply is not the house itself, but everything that's included within a city - opportunity, lifestyle, family, friends, food, etc. These things are subjective to each individual, but have some universal similarities (ie: people generally prefer more opportunity to less).

The population of demand is theoretically the entire world, and more practically, the body of people that wants to live in that city due to opportunities and lifestyle. Just speculating, I'd estimate demand to live in a nice city is much greater than the population by 10 or 100x.

When supply is short and demand is not, you reach equilibrium at the point where only the people who can afford to live there do. "Afford" is subjective too, as some people are willing to pay much more in terms of rent and lifestyle sacrifices. In the case of SV, since wages are still extremely high, I think the cost of housing will still increase. It will squeeze the middle class lifestyle heavily (if its not doing so already).

If you want to look at a mature housing market in the dystopian sense of the word, visit Hong Kong. An abundance of high paying finance jobs, low income taxes, and a crazy amount of powerful real estate investors made HK some of the most expensive housing in the world. But finance is no longer growing, real estate is squeezed of its profits, and the affordability of housing in HK is in serious crisis. Haven't lived here for too long, but it seems that lifestyle has been constantly compromised (small houses, live with your parents forever) by the expensiveness of housing. Or that affording your own house is actually a luxury, not a basic human right (depends on your perspective).

Is there a long term solution? Quite simply, not unless we dramatically think of cities differently than we do currently. Fixed housing costs doesn't solve the basic situation that a city is a very attractive place to live, and that many people would like to move there if they could.

Housing cost is currently the way of deciding who gets to live there, and what they're willing to give up for it.

Cost of moving: Lost income while looking for a new job at the new location, security deposit, first and last month's rent up front, moving truck, loss of income while moving, lack of security at new job, emotional toll if also moving children, loss of pay due to a different cost of living...

Sure, why not move all the time?

The cost of moving is never trivial, and it requires you to be prepared with sufficient money in your savings account. If you don't have that savings and you don't have a support net to catch you, you're not going to be able to move and remain off the street.

Family ties are indeed extremely strong. However, here in Idaho we have lots of former Californians and it seems that it only takes one family member to make the "leap" to move up here, and before long (usually within 5 years) the other members start to see the benefit and move themselves.

My grandmother just moved here after living 80 years in CA. The family next door is 4 generations, each gradually moving up from CA.

The reason is the same: Family. But once someone made the leap, the others followed.

That was easy: "The same reason they can't just go to an ATM and pull out more money. Don't well-off folks ask the darnedest questions?"

As a side note, over the weekend I a report that said housing sales have gone soft on the coasts. The reason given was the recent changes in the tax laws. Perhaps, if prices drop so might the cost of rentals?

It continues to amaze me how the (policy) talk is pro-affordable housing, but the walk is more wealth - of which property ownership is a great conduit - in few hands.

I think the government is going to stop subsidizing ocean and waterfront properties. Not sure if this is a cause or the cause.

One of the most striking things I learned about the Rwandan genocide[1] was how many Tutsi simply refused to flee, even temporarily, even in the depths of the slaughter. Not because they wanted to make a stand or affirmatively resist, but seemingly out of some ineffable resistance to change. AFAICT, the same phenomenon has happened in every other genocide, not to mention other large scale disasters.

Economists can and should debate and quantitatively measure varying aspects of and reasons for the phenomenon. But from a high-level public policy perspective the reasons are largely irrelevant; there's simply no denying that on the whole most people by their nature are extremely averse to moving, even in the face of impending death. Any public policy predicated on intragenerational migration in response to run-of-the-mill structural economic dislocation is doomed to fail. Many people will follow straight-forward economic incentives. But a very large number won't, even to their extreme and readily foreseeable detriment. That makes failure inevitable.

[1] See "We Wish to Inform You That Tomorrow We Will Be Killed with Our Families" (https://en.wikipedia.org/wiki/We_Wish_to_Inform_You_That_Tom...)

I guess "people will move and the economy will readjust" is the new "let them eat cake," then, isn't it?

As Sam Kinison used to say: "Move to the food!!!".


Ironically, the source they cite on California domestic migration indicates that, in lots of cases, they do, and that's pretty much exactly what is driving migration out of CA (and, conversely, that people who can afford it are moving in, but there are fewer of those.)

Not much to add, except that this article makes me sad. My family struggled with housing costs when I was a child, but as a newly arrived immigrant family to a city with a tiny minority population, the lack of social support was felt more keenly than the cost of rent.

I don't think they've address some other factors. It's really scary to move especially when you are struggling. Taking a risk like that when you're only just making ends meet isn't the kind of things we humans do well.

Moving itself is a cost, reduced but not eliminated if you are willing and able to abandon literally all your possessions and then live precariously at your destination while the move is sorted out.

Because those places that are cheaper are usually cheaper for a reason. And generally they don't have the same job opportunities that the more expensive places do.

No jobs.

I disagree. I live and work in the Jacksonville, FL area and it’s both extremely affordable and abundant in jobs, both tech and otherwise. They can’t get enough qualified candidates to move here.

Just about any medium city in Florida outside of Miami gives you a lot of bang for your buck, and no state income tax to boot. Jax, Tampa, Orlando are the big (medium) ones.

I personally would like to live in a remote area in Tennessee or something where I can get 10, 20, 100 acres and just remote to work, but corporate America hasn't quite caught on to that yet.

Do those plenty of jobs pay as well, adjusted for cost of living?

That wasn’t the question posed by the article, but let’s just say I’m able to easily support a family of 6 and live in a 3400sqft colonial brick house on a half acre, and I’m under 35 yrs old.

So while I might make a little more than half what typical FAANG engineers do, I get to work on IMO more exciting greenfield projects and live within minutes of the beach and 2 blocks from a river.

The article does mention that actually, though its not the primary theme.

"And low-skilled jobs in a city like San Francisco pay some of the highest wages in the country; the minimum wage here is twice what it is in much of America, a real benefit that weighs against the high housing costs."

It is only relevant if you want to work such a job. Most people I know prefer something less back breaking and soul crushing.

There is one other thing these communities lack - educational opportunities. Especially universities...

Tampa, FL checking in. I make at the low end of total comp for a FAANG engineer ($150k-200k/year) in security, and we can afford for my wife to be a stay at home mom for two kids, 2600sq ft 4 bed 2.5 bath home with a pool and three car garage (~$250k), a part time nanny, a used Tesla, and frequent travel.

It would be impossible for me to replicate this on the coasts.

FANG as in Facebook/Amazon/Netflix/Google?

Yes - and the second A (FAANG mentioned in a sibling comment tree) is Apple.

Why do those jobs need to pay just as well?

There are jobs available which provide folks with a sustainable life and the ability to thrive. To me, having the job you want, in the location you want, near friends you want to be near, with the pay you want, with housing you can afford, is a luxury.

If you want a life that ticks all the boxes, you have to make yourself more competitive. But I don't believe anyone is entitled to getting the exact job or conditions they want, and they shouldn't expect cities to change to accommodate their list of demands.

31 year old Houstonian checking in. Just bought a nice 3 bedroom house in the heart of the city, and I'm not even making 6 figures. I could have bought it right out of college, probably, too.

This is more about low income workers vs tech workers but I do agree that it applies to tech workers too. Also $150k is above the median for the Bay Area so... good job!

Who's hiring? At the junior/entry level?

I can't name one tech company off the top of my head that has setup shop in Jacksonville, FL. I can however name a dozen in the Bay Area or NYC. And half a dozen in Seattle.

Hashrocket. One of the best Rails consultancies founded by the guy that literally wrote the book on Ruby on Rails.

And plenty more.. https://angel.co/jacksonville

Just because you can’t name one doesn’t mean there aren’t any.

web.com is in Jacksonville. It's a banking and healthcare hub as well.


CSX is there if you like railroads

Or you could read the article and see that it talks about different reasons, primarily social.

My son lives in North Dakota. Lots of jobs of any kind and rentals are very inexpensive.

I could buy a ton of homes in Flint michigan. I wouldn't have a job though.

If you could afford to buy a ton of homes in Flint, Michigan then you could likely also afford to have the job of helping to fix Flint, Michigan, which I imagine while less lucrative, would still provide subsistence.

Sometimes we have to recognize the power we wield and use it to perform selfless acts.

Not saying you should move there and do that, but just that you're wrong in saying that you'd have no job.

for me,

no job, no connection

I can relate to the connection part. We rely on family a lot, and that is something we couldn’t replace if we relocated.

It's frankly pretty silly when people complain about prices (housing prices, prescription drug prices, gas prices, etc.)

The issue with housing prices is that there are a lot of government policies that have the (intentional or unintentional) effect of increasing housing prices. Some of them are as follows:

- Making mortgage interest tax deductible

- Special tax treatment for the sale of a primary residence

- Laws limiting how many people can cohabitate in one building, or similar laws that enforce this more softly through limits on street parking.

- Rent control laws which suppress the price of rental units, limiting the incentive for landlords to build new units.

- Laws that limit the construction (or add extra costs/requirements) to projects that would add more residential units.

- The utter failure of highway infrastructure during rush hour, which adds hours of commute time for short distance travel, drastically increasing the price of residences that do not require a highway commute.

- The failure of municipalities to provide adequate and affordable parking and public transit, adding inconvenience to many neighborhoods which drives up prices in others.

- The failure of law enforcement to create a safe environment in many neighborhoods that offer more affordable housing, leading to increased crime and under-investment in improving and expanding areas that would otherwise be highly desirable for residences.

- Laws that create building code requirements that are not based on sound engineering or safety principles but which create lucrative contracts for certain professions in the building trade... These increase the cost of new construction and make many retrofitting/repurposing projects impossible.

There are many, many more.

Rent control in SF is determined by the age of the building - a new building doesn’t get it.

Also rent control in SF caps rent price increases to 2%, which is the same rate that a building increases in market value. That’s courtesy of prop 13 that says (in effect) that for tax purposes building valuation cannot be assessed at greater than 2% increase a year. Given a large part of income is determined by cost of living, wages have to increase at the same rate as property value.

If the taxable value of property increases at a lower rate than the actual market value of that property then all services that are functionally paid by tax dollars start consuming a greater portion of total tax revenue.

That means a landlord who is increasing their rent/lease by more than 2% is getting a tax payer subsidy as they are using services (roads, utilities, etc) which have costs that increase at market rates, but the landlords aren’t paying taxes at market rates.

Those points are true of SF rent control, however rent control has the side-effect of leading to people being able to afford a bigger place than they would otherwise afford, which in turn reduces the number of people who can afford to live in the same number of units. Why bother taking on a roommate if your rent controlled price makes the unit affordable? So now that would-be room mate has to find somewhere else to live.

Generally rent control only applies to existing tenants, so at some point they could afford the unit. The common issue in California is the landlord increasing rent in according to a market rate that doesn’t match wage increases.

Another fun one in the Bay Area at least is people preventing new construction because the will reduce the value of their property. Literally that’s the argument used in Palo Alto and Mountain View - I can’t imagine it being different elsewhere.

All you have to do is look at the final effect, Z. The stated purpose X may or may not be the intended purpose Y. Even if stated purpose X genuinely = intended purpose Y, the actual effect Z matters the most. You're spot on.

I'm not sure what you mean by 'actual effect Z', but citizens and their local governments had many valid reasons as to why they enacted each of those policies and constraints. For many people, the value of those policies will be more important than having more-affordable housing.

Exactly. Some such policies/laws may be "worth it" because they have other socially desirable outcomes that we rank more highly than affordable housing.

What's odd when seeing my comment get down-voted to oblivion is that I am not making a value judgment about the laws/policies, simply mentioning that many of the ones listed have unintended consequences when it comes to housing affordability.

As usual, downvotes are used instead of a counter-argument because whoever does it lacks the sophistication required to offer one :)

Most of your cause and effect here is correct. I think, The reason you're being down voted is probably because you said it was silly to complain about housing prices. yes, there are many many political problems that cause high housing prices. But, there's still many victims of those housing prices/policies that didn't have anything to do with creating those egregious policies

Ahh. Well, if you consider price a function of supply and demand, then complaining about a price is likely actually a complaint about supply or about demand.

If I say "Wow, the price of a Tesla Model S is too high", I am implicitly saying either "I wish demand for the Model S suddenly fell, leading to a large price drop on existing units" or "I wish a lot more Model S sedans magically got manufactured so that the profit margin available to Tesla on the units sold would be reduced to the point where I could afford one".

Both of those sentiments are fairly silly wishthink. Similarly, so is the sentiment that "Regulators should pass a law requiring all new Model S vehicles to be sold for $20K".

I could define myself as being a victim of the over priced Model S, or I could define myself as being the victim of insufficient wages to afford one at the actual retail price.

I'm not sure why in the case of housing it seems logical to blame the price of the housing instead of blaming the wages that make some standard of living difficult to afford.

For some people, even "affordable" things like community college or McDonalds food is expensive and out of reach. So why not focus on how McDonalds is not "affordable".

One reason why McDonalds is affordable to many is because of the existence of other competitors. My comment above meant to point out that there are many, many ways in which the regulatory landscape limits the number of competitors each landlord faces, driving up prices.

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