Monday, August 20, 2018

The Great Sorting Continues

"The pending departure of North Face, a landmark outdoor apparel company founded in San Francisco in 1966, highlights the challenges for nontech businesses in a region with the country’s highest housing costs." (HT: Roland Li)

"Spectrum Location Solutions, a consultant for company relocations, found that 9,000 California companies had moved their headquarters or chosen to expand outside of the state between 2008 to 2015."

The article includes a long list of recent corporate moves away from the San Francisco area.

We can argue all day and night about all of the causes of this, or all of the excuses for not allowing these cities to grow, or all of the reasons why each individual housing development to be obstructed.  But, in the meantime, the status quo is a situation where the good things that a healthy society does - productivity growth, innovation, mobility - lead inevitably to a bidding war for an arbitrarily limited number of spots on the party boat.  And the process for who gets those spots is, inevitably, a process of growing tension and distress until some more folks give up.

The housing bubble was simply an acceleration of this process so that cities like Phoenix were overwhelmed with families burdened with the choice of moving to their remaining, compromised options.  In 2007 and 2008, we conducted public policy in such a way to remove that compromised option for many families, and we slowed the Great Sorting down.  But, we did nothing to stem the growing tension and distress that comes from the core problem.

PS: It looks like the phrase, "The Big Sort", has already been coined.

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