Rents in Megacities Can They Go Up Forever?

We live in a special time where clustered actions are unusually significant for economic growth. Some tasks, including dentistry and cement production, don’t cluster geographically for reasons that are obvious. By comparison, finance (New York and London), information technology (the Bay Area), and entertainment (Hollywood and New York) are the most clustered. For whatever reasons, it makes sense to have many of the best decision makers in one place.

Top cities have become so expensive in large part because two of these clustering sectors — data and finance technology — have been ascendant. There isn’t any special reason to expect those trends to continue eternally, and rents will be bound by that in cities that are affected.

Read more at Bloomberg. Quite interesting.