Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1204

Barry Ritholtz recently published an article in Bloomberg View called: Still a Lot of Negativity on Housing . 

He basically says that “many people” should go out and buy a home given the current state of the US housing market and the historically low interest rates. That’s a perfectly fine argument. But it’s not all that interesting.

The article does, however, have a moderately interactive chart showing the percentage of US households that own their homes.

It shows the pre-2008 peak:

And it shows, somewhat surprisingly, the recent “search for bottom.” I knew there was a significant post-2008 decline, but I guess I thought it had stabilized. Instead, the US is hitting homeownership rates not seen since the mid-1960s.

Big cities tend to have a higher percentage of renters. Millennials are flooding into cities. The digital economy now encourages mobility, which contradicts traditional notions of homeownership. There are all kinds of potential hypotheses that could be extracted here.

But the other interesting thing I noticed in the article, was this:

However, at some point in life, you probably no longer want to have a landlord telling you what color your walls can be or become tired of having strangers share a wall with you . I am not a zealous believer that everyone should go out and buy a home. However, for many people, buying makes sense – especially with mortgage rates as low as they are (the current rate of about 3.45 percent for a 30-year fixed-rate mortgage is just 0.10 percent higher than the record low).

I couldn’t help but notice the embedded cultural bias. The inference is that when you rent, you share walls. In other words, you live in some sort of multi-family apartment. 

But when you finally go out and buy a home, you graduate from that. You no longer need to share walls with strangers. Because an owned home equals a single-family detached dwelling. That’s how you know you’ve made it.

Well, I have shared walls in my owned home. I guess I’m not there yet. :)

The City of London is looking for a “Night Czar” to help shape and grow the city as a 24-hour destination. Here’s a snippet from the job posting:

“The Night Czar will champion the value of London’s night time culture whilst developing and diversifying London’s night time economy.

Working with the Mayor, the Night Time Commission, local authorities, businesses, the Metropolitan Police Service, Transport For London and other agencies, the Night Czar will create a vision for London as 24-hour city and a roadmap showing how the vision will be realised. The Night Czar will have proven leadership ability, public profile and convening power, plus a thorough understanding of the night time economy and the ability to work in a political environment.”

I think 2016 will turn out to be the year of the “ night mayor .” This trend is really picking up momentum in Europe, as more and more cities look to capitalize on their night time economies.

The job will pay £35,000 per year for 2.5 days of work per week. The closing date for the application is Monday, September 12, 2016. If you’d like to apply, you can do that here .

I’ve been writing about this trend all year . Hopefully a decision maker in Toronto is reading this.

What happens when wages and real estate prices become too high in a city? Companies start growing in lower cost locations. We’ve all seen this before. 

Fred Wilson recently blogged about this “ spillover effect ”, citing a New York Times article  talking about the growth of tech offices in Phoenix. As someone who sits on the board of many technology companies, he was noticing a thematic trend:

“A big theme of board meetings I’ve been in over the past year is the crazy high cost of talent in the big tech centers (SF, NYC, LA, Boston, Seattle) and the need to grow headcount in lower cost locations.”

We talk a lot about housing prices on this blog, and so I think it’s useful to see how this, along with high wages, also impacts companies. The two are interrelated.

Below is a chart from the NY Times article showing the US cities with the highest number of technology jobs and the most growth from 2010 to 2015. 

San Francisco is in a league of its own. But overall, the growth is in tech and many cities are adding lots of technology jobs. Look at Detroit and Boston right beside each other (Detroit obviously has a smaller starting base). And look at how Miami is nowhere to be found.

Of course, one interesting question is whether these new outposts – such as Phoenix – can truly come into their own and carve out a niche:

“We don’t want to be San Francisco’s back office — we need more creators here,” said Scott Salkin, a founder and the chief executive of Allbound, which is based in Phoenix, makes sales software and has offices down the hall from Gainsight’s.

Even with the high cost of living, it’s hard to supplant the coastal hegemony. That’s where people go to chase riches. As comedian Daniel Tosh likes to say, “the middle of the country is for people who gave up on their dreams.”

Though for some, living in a place like Denver or Salt Lake City and snowboarding every weekend is a better outcome than living in a studio apartment and commuting an hour to work.