[wilkommen]

The root cause of the dynamic you're highlighting here is wealth inequality. The more unequal the distribution of wealth in a society, the more concentrated wealth becomes geographically, because as wealth inequality grows, society begins to reorganize into a system which serves ever more lopsidedly to the needs of the wealth holders. The wealth holders, being few, and being social creatures like the rest of us, tend to congregate in fewer and fewer geographical areas. They have the money, so anyone who wants money must live near them to get some. So rents skyrocket in the geographical areas surrounding the wealth holders, which they ironically benefit from, as it creates a smaller amount of land that they need to buy in order to own all the economically significant land in the country, which only intensifies the cost-of-living crisis. Housing regulation cannot fix this, not only because housing regulators can become captured by the wealthy, but also because the root cause of the phenomenon is not addressable by housing policy.

[rienbdj]

Plus the only group with any disposable incomes increasingly becomes the super rich. So all the support functions of this… restaurants, high end boutiques, wellness clinics, tailors, … start to cluster. The servant class then push prices up further by trying to live a commutable distance to work.

[rich_sasha]

At some point, if there are enough incentives, you should see businesses and employees moving to lower CoL areas, as you saw the mini exodus from SV to Texas. What exactly is the government motivation for relieving the pressure on startup SEs, I'm not sure.

[sometimelurker]

interestingly in areas with higher average wealth there should be a sharper difference between the richest and poorest people in that area. consider Elon musk, and the ratio between him and the 2ed and 3ed up to the 10th richest people on earth.