Not only that, the astronomical housing prices are likely to be in only certain parts of the city. My kids live in apartments less than 3 miles from each other, both in Queens. My son shares an apartment (4 BR, 2 baths and 2 common rooms) with three friends for about $2200. My daughter and her fiance pay $1600 for a tiny one bedroom- she’s not in the most expensive neighborhood in NYC, but it’s more expensive than my son’s neighborhood a couple of miles away. You’ll notice that neither of them has their own apartment- and I think that may be a difference between the most expensive cities and other places. I have never known someone who grew up in NYC and expected to move from their parent’s home to an apartment where they would be the sole occupant in their 20s. If you never expected to do it , it won’t feel like much of a sacrifice when you can’t.
Which also means those people have a vested interest in keeping housing expensive (on top of all of the social factors that lead even non-owners to fear any changes to the local housing landscape).
Just for an alternative response, housing prices in the capital cities in Aus are mental as anything. In Sydney and Melbourne in particular, an average house in a very average suburb will cost upwards of $700k to buy, and obviously a fortune to rent. If you want something like 4br, 2bathrooms and a garage, you’re going to be paying a LOT more.
Why people stay? Because the jobs are in the capital cities. They don’t have a choice.
In high cost of living areas, housing is expensive, but everything else is cheaper. Not necessarily cheaper in absolute terms, but relative to salary.
So if your priorities are literally anything other than house size, it’s pretty much a net win. Like to travel? Same price no matter where you are in the country and so more affordable on the higher income. Like fancy cars? Same thing. Food is a bit more expensive… but you can still better afford to shop at Whole Foods or whatever. Computers? You can afford that fancy laptop.
Perhaps most importantly of all, you can save more. So when the time comes to retire, you can have millions in your nest egg instead of thousands. And you can always move someplace cheaper–not an option if you’re already in someplace cheap.
Of course, salaries don’t always scale up the same way, so results may vary. But for reasonably-paid professionals it is very likely to be true.
I’d make an exception for childcare, which seems to scale in price as drastically as housing.
Yeah, I thought of that just after I posted. I suppose I’d extend it to anything strongly based on local human services. Housecleaning, etc. are also going to scale with CoL. Childcare is certainly a big one, though.
OTOH, if one parent doesn’t bring in a professional-tier salary, it starts to make a lot more sense for them to stay home and take care of the kids. I know some couples that have done this.
Well, those folks would certainly not want prices to fall, and I’m sure they’d be happy to see them rise since they’re heavily invested, but I can’t imagine how their vested interest could have any direct effect on what happens to housing costs. Housing prices are pretty much entirely determined by supply and demand, the job market and the general state of the economy, and federal government monetary policy and mortgage regulations. I am no fan of real estate speculators, but neither ordinary benign homeowners nor house-flippers or rent-gouging profiteers can have much of an effect on housing prices by sheer force of will. This really is a case where the free market prevails.
There is a difference between living in a city which contains a gay neighbourhood, and living in a city where the city as a whole is welcoming to LGBT people. I mean, I’m aware that not everyone in SF is a rainbow-flag-waving progressive, and not everyone in Dallas is a gay-hating social conservative. But the average attitude is quite different between the two cities.
Speaking as an amateur-hoping-to-become-professional observer:
There’s also a lot of employment turnover in pharma and biotech. Big companies have major layoffs or axe entire divisions every few years. Small companies have a life span of maybe 5-10 years. They either succeed, which means they’re bought out by a big company that lays off most employees, or they fail, and everyone is out of a job.
That sort of instability is tolerable in a major hub like Boston, where there are a lot of other good employment options. It’s a lot rougher in small cities with one major employer that folds. For instance, Pfizer used to have a big research campus in Ann Arbor. That was shut down ~10 years ago, and anyone who wanted to find a new job in their field had to move halfway across the country.
To get back to the OP, I’ve been in and around Boston for several years. The cost of living isn’t bad for a two-income couple with no kids. But my wife and I are ready to settle down and start a family, and given the cost of child care and modest postdoc wages, we could only afford it in Boston with a lot of sacrifices. It’ll either be a shitty apartment with a decent commute, or a decent apartment with a really terrible commute, and owning even a condo will be out of the question for several years. And we’d be completely hosed if either of us lost a job.
Personally, I’m looking at places like Raleigh-Durham as a good compromise between available academic postdocs and biotech jobs, cost of living, and having family nearby. Later in my career there’s a good chance that I’ll need to move back to Boston, but at that point we’ll (hopefully) be able to afford a half-million dollar single family home.
I checked out Johnson City on Google maps–I wouldn’t take the word of anyone thinking Red Lobster was fine dining. It’s definitely a little city/large town. But there’s a “hip” neighborhood with several craft breweries, some coffee houses with entertainment & non-chain restaurants. And it’s in the Appalachians, for those who like the outdoors–although it’s near the part that’s been burning recently. (There also looks to be a strong African-American community.)
And it’s got East Tennessee State University:
No great museums, grand opera or achingly trendy dining. But there are jobs, inexpensive housing & stuff to do. If you’re a single who can afford a pricier city, go ahead! (But don’t start bitching that you can’t afford to buy a home immediately; lots of real urbanites remain renters.)
(I haven’t been to any of the chain Carrabba’s. But the original is in Houston–still run independently. Pretty good for upscale Italian. Overall, we’ve got an excellent restaurant scene here. Just don’t tell anyone!)
In general it’s one of the biggest non-mysteries why people live in high housing cost areas and many posts have mentioned it: high paying jobs, and more of a stratification nowadays between the best and average jobs even in a given field. As a native NY’er I’ve seen for decades, word of mouth before the internet, people from eg. Buffalo or Pittsburgh wondering why the same classic old houses (all three areas have them) are so much more expensive in NY, and even the belief that must somehow even out by some economic law. It’s leaving out the whole side of the equation the very high incomes a goodly number of people (not everybody) can make at their jobs if living in my house (~2 air miles from Wall Street or midtown), that almost nobody can make in Buffalo or Pittsburgh. It’s really pretty simple in first order terms.
Of course there are other factors. I’m not tied to the NY area anymore economically but I lived here most of my life, several generations of my family before me (though almost nobody from previous gens still around and my siblings and most of my cousins live elsewhere now, wife’s family isn’t from here either, OTOH two of three grown kids work in the City). And the high cost of living isn’t that big a factor for us. There aren’t all kinds of things we’re dying to spend money on that we can’t because taxes are so high* or with the money tied up in the house.
And NY is a unique place, SF and a handful of other US cities might also qualify as I see it, Hawaii among expensive states, etc. Younger people might live in expensive places part of their lives though not seeking very high income employment, just to experience those unique places, then move to Lancaster TX. 
More locally, many people still live as singles in the City or very close, then move further to at least slightly less expensive areas to raise families, though the supposed trend is more to just stay urban.
*which is the main cash flow element of very high NY area costs if you already own, especially from long ago. Our property taxes are ~6%/yr based on what we paid for the house, though only 1% of what it’s worth now, still a lot of $'s. In the City proper you face lower prop tax but a 4.5% local income tax. And NY and NJ have high state income tax. Otherwise we have to pay to rent a space for the car, getting professional work down on the house (but I DIY pretty much) is expensive, utilities tend to be higher, but basic goods/services otherwise aren’t much more expensive here than elsewhere unless you’re talking literally Manhattan, and having to pay tolls to get to Costco etc. There’s a lot of money tied up in the house that could be released selling and buying in a cheaper area, but our house remains a good long term investment IMO.
I live deep in the city of Chicago. Not quite downtown, but walking distance from it. What I spent on a tiny townhouse would have gotten me a five-bedroom palace in the suburbs. But I don’t feel like I live just in my house; I live in my whole neighborhood. I have a park across the street, a zoo a few blocks away, a beach a few more blocks away, dozens of coffee shops and neighborhood joints. It feels like I have much *more *space to live in that if I had a McMansion in a bedroom community. And I don’t even have to take care of most of it.
Most people working in a library are not librarians, i.e. they possess a library science degree. It’s highly likely the people stamping your books at the front desk and pushing the reshelving cart around is just a library tech, i.e. general labor, and that requires only a high school diploma; the actual librarian is probably sitting at a computer in an office somewhere out of sight, doing librarian shit.
There are also medical librarians. Some hospitals maintain libraries of medical journals, and need a librarian with a medical specialty to run them.
I’m an example of a lot of what has been discussed already. As a software engineer the good jobs are essentially concentrated in a few very expensive cities. I used to live in Berkeley and commute to San Francisco. In many ways, despite the huge rent, the quality of life is excellent. The weather is wonderful, the outdoors is spectacular. And being a college town only the rent and childcare is crazy expensive. Restaurants are esxcellent and cheap.
But in the end we’d never be able to afford a house. As our first kid grew up and we started to think about more kids and schools and long commutes we just couldn’t make things work in a sustainable manner. Now it may be that we’d just have to suck it up, since I’d take a major career hit elsewhere. Luckily Seattle exists. It’s sort of in the middle. It supports really good software engineering jobs. It’s hugely expensive by national averages, but cheap compared to the Bay Area. Bellevue and the east side have the good schools and parks and relatively affordable childcare that you’d expect from suburbia combined with a high earning hi tech population. The economy is doing really well here.
That said, it maybe is heading in a San Francisco direction. Zillow claims our house is worth $150k more then we paid 18 months ago. I’m not sure how much stock to put into that. Perhaps we’ll end up one of the people that locked in a semi reasonable housing cost in an area that goes nuts for newcomers.
I felt very similar living in Manhattan’s East Village, then later Hoboken NJ. My wife, OTOH, feels very constrained by the city and prefers the rural openness of her parents house in NJ. In my neighborhood, there are dozens of restaurants, bars, parks, playgrounds, coffee shops, a beer garden, a movie theater and other activities all within a short walking distance. I’m a short 8-12 minute ferry ride to Manhattan. I live off of an esplanade that extends from Jersey City to Fort Lee (I think…I’ve only jogged it as far as Port Imperial).
I go to my wife’s parent’s and I feel trapped in their yard. There is nothing of interest for miles around. Maybe a couple of bars where I can be the victim of a hate crime for having all my teeth. The town I grew up in is similar. Lots of detached single family suburban homes on oversized lots for miles in every direction, occasionally broken up by a strip mall or series of chain restaurants.
My wife constantly complains our son has no place to play. Sure, aside from the giant lawn in front of our building and the various parks and playgrounds in the neighborhood. What does he get to do at his grandparents? Run around a yard doing the same thing. Except that they have bears.
From my travels, I’ve come to the conclusion that suburban people typically need to own larger homes because they less to do and their home must serve as their single location for all their activities.
Interesting - thanks for the response.
That’s exactly my situation. I bought my house in the Bay Area about 20 years ago. At the time, it was a bit of a stretch, but I could afford it on my mid-level tech salary. Since then I’ve managed to pay off my mortgage, and the house is worth several times what I paid for it.
So that’s why I stay.
I live in Raleigh Durham and we do have a big pharma and biotech area here. I think we are ranked not too far behind San Fran and Boston in that regard. Cost of living is still pretty good here. We have close to 2 million people here now. There are a lot of science postoc jobs here too.
Yeah, and (most importantly to me right now) a single postdoc income in NC can adequately support a family, and two incomes becomes very comfortable.
Still, Raleigh Durham probably didn’t rank high on Fiveyearlurker’s list since it doesn’t really have as many of the really big pharma companies, or the sexiest new startups, or venture capitalists shoveling money into Kendall Square. IIRC the Research Triangle has more contract research organizations and manufacturing, and agricultural biotech, which isn’t quite as desirable for someone with an established career in preclinical research.