Korva is a scroll of the internet’s best ideas.
Expensive cities push artists up or out
Rent as a price signal
Rent is a price signal about the opportunity cost of living in one place rather than somewhere else. Anyone who insists on a slice of the finite housing supply within walking distance of OpenAI's headquarters had better do something valuable enough to be the high bidder. Anyone without a short list of places they need to be can optimize for cost and local amenities instead of paying for location.
Up or out
The up-or-out model is Baumol's cost disease, for rent rather than wages. Many of the things that make cities interesting aren't lucrative: trendy brunch places need people to bus the tables, and cities with creative scenes are the ones where earning the median American household income still roughly qualifies as starving artist. That makes expensive cities spikier, bland in some ways and fascinating to anyone who cares about the industry driving up rents.
The online route
The market in creative talent keeps getting more efficient because there are so many online channels now. People can and do Substack their way to a book deal, and then they can move to the big city and hang out with the other successful artists.
Why do services keep getting pricier?
Economists William Baumol and William Bowen raised the problem in their 1966 book on the performing arts. A string quartet needs the same four musicians and roughly the same time to play a piece as it did in the 1800s, so its productivity has barely moved. Factory productivity keeps rising, which pushes wages up across the economy, and the quartet has to pay comparable wages to keep its players. Live performance has therefore grown more expensive relative to manufactured goods.
Why do artists cluster in expensive cities?
Alfred Marshall described the pull in his 1890 Principles of Economics: firms and workers in the same industry gain from a shared pool of labor, shared suppliers, and spillovers of knowledge. For artists, that means galleries, publishers, collaborators, and buyers within a short distance. Economist Edward Glaeser has argued that dense cities speed the exchange of ideas. His 2011 book Triumph of the City makes that case for cities in general.
How did cheap rent shape SoHo's art scene?
In the 1960s, artists moved into empty cast-iron factory lofts in lower Manhattan, where rents were low because the buildings were zoned for manufacturing. The neighborhood filled with studios and galleries, and the city designated the SoHo-Cast Iron Historic District in 1973. Rents climbed as the area grew popular. It later became one of Manhattan's most expensive shopping districts.
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