Category Archives: Economics

Urban Living: Are U.S. Big Cities Still Worth It?

A cost-of-living crisis is unfolding in U.S. major cities. Inflation data shows that costs for items such as rent and groceries are increasing quickly across the Sun Belt and coastal superstar cities. Now years removed from the darkest days of the pandemic, people are asking: Is a return to the city worth it?

Metropolitan regions have sprawled in recent years, raising budget concerns and quality-of-life issues for the people who remain downtown. Meanwhile the absence of commuters is slowing the recovery in leisure and hospitality. Many renters believe that a cost-of-living crisis is brewing in America’s major cities.

New York City is showing up as a hotspot of rent inflation. The average rent for 1-bedroom apartments in Manhattan rose to $3,995 a month in May 2022 — a 41% increase from one year ago, according to Zumper. Sudden, double-digit rent spikes are hitting other hubs, including Chicago, Los Angeles, and Austin, Texas. Zumper data shows that growth is particularly strong in Sun Belt cities such as Miami, where rents have risen to $2,700 a month in May 2022, a 64% increase from a year prior. During the pandemic, workers left the largest U.S. cities.

Two years in, renters have returned but many commuters haven’t as companies negotiate the particulars of a return to the office. Public officials are concerned about lagging transit ridership in cities such as New York. Ed Glaeser, an economist at Harvard University, says cities are becoming more important — not less — in the age of remote work. “When you Zoom to work, you miss the opportunity to watch the people who are older, to watch what they’ve done and to learn from them,” he told CNBC in an interview.

But for renters, a return to increasingly expensive cities might seem like a raw deal, especially if they can do their jobs from home. Researchers say remote work limits firms’ ability to train new workers. Data produced by Microsoft’s workforce suggests that it is more difficult to share in-depth information remotely, which can produce silos within companies’ rank and file.

“A lot of these tech companies, they’re saying you can work remotely,” said Andra Ghent, a professor of finance at the University of Utah. “But, you know, in many cases, they’re also saying, like, we’re not going to pay you quite the same amount.” Many renters believe that a cost-of-living crisis is brewing in America’s major cities. New York City is showing up as a hotspot of rent inflation. The average rent for 1-bedroom apartments in Manhattan rose to $3,995 a month in May 2022 — a 41% increase from one year ago, according to Zumper.

Sudden, double-digit rent spikes are hitting other hubs, including Chicago, Los Angeles, and Austin, Texas. Zumper data shows that growth is particularly strong in Sun Belt cities such as Miami, where rents have risen to $2,700 a month in May 2022, a 64% increase from a year prior. During the pandemic, workers left the largest U.S. cities. Two years in, renters have returned but many commuters haven’t as companies negotiate the particulars of a return to the office.

Public officials are concerned about lagging transit ridership in cities such as New York. Ed Glaeser, an economist at Harvard University, says cities are becoming more important — not less — in the age of remote work. “When you Zoom to work, you miss the opportunity to watch the people who are older, to watch what they’ve done and to learn from them,” he told CNBC in an interview. But for renters, a return to increasingly expensive cities might seem like a raw deal, especially if they can do their jobs from home.

Researchers say remote work limits firms’ ability to train new workers. Data produced by Microsoft’s workforce suggests that it is more difficult to share in-depth information remotely, which can produce silos within companies’ rank and file. “A lot of these tech companies, they’re saying you can work remotely,” said Andra Ghent, a professor of finance at the University of Utah. “But, you know, in many cases, they’re also saying, like, we’re not going to pay you quite the same amount.”

World Economic Forum: Top Stories Of The Week

This week The World Economic Forum are highlighting 4 top stories – green steel that could help save the planet, a device that allows you to feel the Metaverse with your bare hands, a wind turbine that fits in your backpack and jet packs for paramedics on mountains.

Timeline: 00:15 Green Steel 02:09 Feeling the Metaverse 03:10 Backpack Wind Turbines 04:46 Jet Packs for Paramedics

Previews: The Economist Magazine – May 21, 2022

The Economist Magazine, May 21, 2022 – War is tipping a fragile world towards mass hunger. Fixing that is everyone’s business.

World Economic Forum: Top Stories Of The Week

This week The World Economic Forum are highlighting 4 top stories – millennial retirement savings, slingshot tech for satellite launches, China’s cheapest electric car, and Paris noise sensors

Timeline: 00:15 Millennial retirement savings 01:48 Slingshot satellite launches 03:46 China’s cheapest electric car 04:52 Paris installs noise sensors

The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. We believe that progress happens by bringing together people from all walks of life who have the drive and the influence to make positive change.

Housing: Why U.S. Homes Are So Expensive (CNBC)

Prices for the American dream home have skyrocketed. The U.S. housing market has been an unlikely beneficiary from Covid-19. The pandemic encouraged city dwellers to move to the suburbs as families looked for home offices and bigger yards.

Segments: 00:00 – Why the U.S. is facing a housing shortage (May 2021) 12:37 – How suburban sprawl shapes the U.S. economy (February 2022) 25:49 – How did rent become so unaffordable in the U.S. (December 2021) 34:46 – Is the U.S. in a housing bubble? (September 2021)

“Everybody expected housing to really sort of dry up with the rest of the economy,” said National Association of Home Builders CEO Jerry Howard. “And in fact, the opposite has happened. People who have been sort of scared out of the cities by the pandemic.”

With homeowners unwilling to sell, a record low supply of homes for sale has forced buyers into intense bidding wars. According to the National Association of Realtors, the U.S. has under built its housing needs by at least 5.5 million units over the past 20 years. That’s a stark comparison to the previous housing bubble in 2008 when overbuilding was the issue. Higher costs for land, labor and building materials including lumber have also impacted homebuilders.

However, according to most experts, the market is shaping up to look more like a boom rather than a bubble. “We say bubble because we can’t believe how much prices have gone up,” CNBC real estate correspondent Diana Olick said. “A bubble tends to be something that’s inflated that could burst at any minute and change and that’s not really the case here.” And America’s suburbs are sprawling again.

Over the 20th century, real estate developers built large tracts of single-family homes outside of major cities. The builders were following mortgage underwriting standards first introduced by the Federal Housing Administration in the 1930s. Over the century, those guidelines created housing market conditions that explicitly shut out many minorities. Experts say it is possible to update these old building codes to create equity while fixing some, but not all of the problems of American suburbia.

In 2021, single family housing starts rose to 1.123 million, the highest since 2006, according to the National Association of Home Builders, however, options for prospective homebuyers remain lean. Experts say the problems of America’s housing market relate to past policy decisions. In particular, they say restrictive zoning codes are limiting housing supply.

Opinions: Saving The U.S. Supreme Court, Health Care Tech, Remote Work

A selection of three essential articles read aloud from the latest issue of The Economist. This week, how to save the supreme court from itself, how wearable technology promises to revolutionise health care (10:29) and our Bartleby columnist on why working from anywhere isn’t realistic (18:29).

WORLD ECONOMIC FORUM: TOP STORIES – APRIL 29, 2022

This week The World Economic Forum are highlighting 4 top stories – how Ukraine’s economy is predicted to shrink, a new solar energy storage chip, the reason behind sinking cities and a transformative toilet design.

Timeline: 00:16 Ukraine economy to shrink 01:34 Solar energy storage chip 03:02 Sinking cities 04:25 Transformative toilet

Preview: The Economist Magazine – April 23, 2022

Previews: The Economist Magazine – April 16, 2022

World Economic Forum: Top Stories – April 8, 2022

This week The World Economic Forum are highlighting 4 top stories – wheat shortages due to war, a female-led Mexican electric car brand, a robot dog guards Pompeii, and a plane fuelled by cooking oil.

Video timeline: 00:00 – Intro 00:15 – Wheat shortages due to war 02:17 – Female-led Mexican electric car brand 03:34 – Robot dog guards Pompeii 05:00

Plane fueled by cooking oil The World Economic Forum is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business, cultural and other leaders of society to shape global, regional and industry agendas. We believe that progress happens by bringing together people from all walks of life who have the drive and the influence to make positive change.