[freddie_mercury]

> So what's the solution? [...] the loss of hundreds (or thousands) of jobs is always going to be devastating anywhere outside of a big city.

It seems like the seeds of the solution are contained in your own post: don't live anywhere but a big city. Or, if you do, realise that you are making a risky bet with your entire family at stake.

[carlmr]

Or don't buy a house where there isn't a diverse portfolio of companies around.

Because moving from one rental to another is not that hard.

[jackvalentine]

A lot of mom and pop investors made incredibly poor decisions in Australia's mining boom, buying up properties in mining towns to rent for $800k+ and after the bottom fell out of the market only being able to sell at sub $200k. Often using equity in existing loans after appreciation to pick up three, four properties.

It seems insane to me to buy even one property in a mining town, let alone multiple.

[carlmr]

That is capitalism doing its optimization work. It will punish the people that give credit in these risky cases and the people that make risky decisions like these because of greed.

If you buy property in more diversified regions you won't make as much money, but you have less risk and short term crises will usually pan out.

[jackvalentine]

The people that gave credit in these risky situations are making record profits and their dubious banking practices have made them the subject of a royal commission.

Sure they’ve been theoretically ‘punished’ for lending too much by making a little bit less profit but it sure doesn’t seem like much of a corrective action to me.

[carlmr]

That's because the government is corrupt. If the government actually let the banks fail and bailed out the citizens instead the bad banks would be gone, the citizens would have put the money into the economy again, and you'd have an economic miracle happening quickly, as it is common after such resets.

Government subsidized failure is one of the main reasons why communism never worked out. Bad companies need to fail and make way for more efficient or less stupid companies. Otherwise you end up with all your companies operating at roughly the same efficiency as the government (close to 0), because there's no incentive for them to avoid risk. They're rewarded either way.

[close04]

Actually the solution was already tried and tested by American cities. It's called diversifying the economic base. Instead of relying on 1 mammoth company, try to develop and sustain multiple smaller ones.

All American cities that recovered from the '70s-'80s downturn, and even from the 2008 crisis were the ones with a higher number of smaller employers, startups, etc. The ones that diversified. Because they are more resilient to one company's failure.

[alkonaut]

A city doesn't have to be big to be diverse. It just has to be "not a mining town" or "not dominated by a single industry".

[kgc]

By this logic people shouldn't move to the Bay Area since it's dominated by tech.

[alkonaut]

I don't consider "tech" to be a single industry, and also it's not exactly a mono-company area like a mining town.

[doombolt]

Buying property in Bay Area is a bet. I can imagine scenarios where it won't pay off.

[sjg007]

The Bay Area economy is diversified. The weather is also great.

[ummonk]

The problem is that the cities with thriving job markets tend to also have high housing costs.