What I don't see in these conversations is how much increasing property prices contribute to killing third places.
People get excited because they bought a house for $200k and it's notionally worth $800k now. In reality they haven't gained anything because every house is $800k and you still need somewhere to live so you still only own one housing unit of wealth.
Worse, people actively lobby for policies that increase housing prices.
But if this house is worth $600k more where is that money coming from? It's coming from the next generation who has to pay substantially more for the same house. It's a wealth transfer from the young to the old.
How does this relate to third places? Well, imagine a neighbourhood cafe. 20 years ago that cafe space might cost $200k and have a commercial rent yield of, say, 5% so it would cost $10k/year in rent for argument's sake. Well, all property has gone up in value so that cafe's space is now valued at $800k. It still demands a 5% yield so that's now $40k/year. All the cafe's customers have to pay for that with increased prices.
So with increases in housing costs, people have less money to spend and that money doesn't go as far. At a certain point, volume goes down and the business has to either close or raise prices, further exacerbating the problem.
Rising housing costs are strangling every aspect of society.
US zoning laws are probably a much bigger factor in keeping neighborhood cafes out of residential areas. The idea of a “corner cafe” - literally a house converted into a store front - simply isn’t possible in most residentially zoned areas.
> In reality they haven't gained anything because every house is $800k and you still need somewhere to live so you still only own one housing unit of wealth.
They can borrow money against the extra value of their house. They don't need to move out. That's what everybody in the landed gentry has been doing for the past two decades.
You can also sell that house and buy a very nice ranch (when you’re old, you won’t want stairs) somewhere that isn’t even a middle-of-nowhere shiathole for half the price. Pocket the rest.
That is why the gains really are actual, useful money for lots of people.
...and one day, a younger generation is going to say "enough" because they'll have no other choice. I'm not sure what they'll do, but it probably wont involve respecting the abstractions that we've been basing our retirement savings on.
Yeah, it's confusing to me anyone expects usury of youth to be sustainable. We come into the world with nothing, and then we are saddled with debt and costs like describe above (which are, essentially, debt)?
And yet, it's a system which has, so far, outlived the others. Perhaps it is stable, after all. It certainly keeps the youth honed in on the grindstone.
There were some defectors in the 60s, and in 2008, but that was far less sustainable or, rather, failed to reach critical mass / escape velocity.
I call this “terminal capitalism.” We’re now in a state where everybody prioritises building their own wealth at everyone else’s and society’s detriment.
I’m not an advocate for communism either, by the way. Just regulation and proper taxation.
Unfortunately, Starbucks is opening “kiosk only” locations with no seating that, obviously, fail to function as a third place. My partner finished up a medical appointment and was waiting for me to arrive, and decided to stop in Starbucks. Oops, just a kiosk. The options left for a “third place” was a petrol station that had seating and a grocery store.
Somehow I don’t think petrol station seating areas will promoting a huge amount of neighbourhood entrepreneurship. I would probably look at more independent, locally-owned kind of establishments—particularly that do have seating.
I can think of a lot of critical meetings that happened in these sort of coffee shops, including a first interview for the person who is now our staff software architect, the first meeting I had with my now-business partner where we went over her product idea (admittedly that was a Starbucks), getting together to hash out ideas to solve difficult problems, and best of all, a random chance encounter because we were in a third place. This is in places as diverse as small heartland American towns, NYC, Tel Aviv, or Pennsylvania’s rust belt.
Fewer of these places means fewer of these good things happening. I don’t need a kiosk; I have an espresso machine I can operate at home or in the office.
> I don’t need a kiosk; I have an espresso machine I can operate at home or in the office.
You would probably enjoy the experience of a small, locally owned coffee shop then. Starbucks is optimizing for their profit. In my suburban city, Starbucks has closed most or all locations that were a few miles from the freeway. They built new locations with drive throughs and very little to no seating within a few blocks of every freeway onramp. This tells you what they are optimizing for.
Unfortunately, chances are encounters and warm fuzzies do not please the corporate overlords.
In LA, every small locally owned coffee shop has become totally overrun with folks buying one latte and proceeding to take a whole table to themselves and their laptops for the next 5 hours.
Every business is optimised for profit. This is why they exist. Difference is that Starbucks probably can be profitable operating as a kiosk but a mom and pop store can't because it lacks brand value.
At this point, I feel like that kind of thing is an obvious consequence of, among other issues, most of the US going straight to "we've tried nothing and we're all out of ideas" when it comes to mental health issues and the homeless.
> Unfortunately, Starbucks is opening “kiosk only” locations with no seating that, obviously, fail to function as a third place.
And when they convert an existing location to kiosk only, the prices do not go down.
There are two Starbucks locations in downtown Redwood City, about 250m apart. The one on the right side of the tracks has comfortable seating and tables. The one on the wrong side of the tracks, in the dying mall near the homeless camp, is kiosk only. Same prices.
It may be that they converted the location to kiosk to avoid raising the prices, given that California recently raised their operating costs by a significant amount. So the prices did go down in a sense.
I've been protesting the loss of starbucks seating in my grocery store by just making some seating out of whatever product is on display at that time. I haven't run into any entrepreneurs yet, but the community is amused.
I've noticed students working in the IKEA Cafes here in Australia!
They offer similar benefits to a good sized Starbucks store.
Free charging points, WiFi, bench seating in secluded corners and so on.
Though I'd wager that WiFi is less important, as people have mobile plans with plenty of data.
Given the accommodation crises in Australia, I'd suspect many students dont have a decent place to study in their homes. Many of them are sharing bedrooms etc..
IKEA restaurants are my secret (guess the cat is out the bag now haha). I never see anyone else working there. Free unlimited parking too. And Fridays has half price food
Only downside is screaming kids
And yes there's bad mobile signal but Vodafone (famous for having better indoor signal I believe) works ok
The study basically compared neighborhoods that received a Starbucks versus neighborhoods that did not. What if Starbucks decided to open in those neighborhoods because of some confounding factor that suggested an increase in economic activity?
Except how do we know that the reason they didn’t do so was precisely because of that confounding factor? It’s a neat idea but leaves one wanting for better data
IIRC (I read this study a few weeks ago), they compared areas where a Starbucks opened; areas where Starbucks planned an expansion but were prevented by things like city planning snafus; and areas where Starbucks opened in non-traditional (eg low income) areas through their partnership with Magic Johnson.
I'm from a city in central China, where Starbucks is a great place to talk because it's located around a mall, and unlike other stores, the seating is less crowded, but if I want to study or get quiet to do something, I'll choose the library or a less lively local café.
I am currently living in Japan after living my whole life in the United States. I have noticed Japanese Starbucks are much more generous with the space and seating, and generally are wonderful places to socialize/study/work. Additionally, I wonder if it is related to the prevalence of malls and their popularity. In the US, malls are almost universally graveyards, whereas in Japan every Aeon Mall I've ever visited has been full even on weekdays.
There’s a nice coffee shop near me but they have somewhat hostile policies toward people wanting to sit on their laptops and work for hours, which makes it hard to be a decent third place. On weekends, laptops are banned entirely.
People sitting on their laptops, usually with headphones, are actually themselves hostile to third places and that's why some cafes ban them on weekends.
The issue is that its a starbucks. I think if people are trying to hang out with their friends, at this point in 2024 they are not going to waste that moment of everyone's schedules aligning like the planets at merely starbucks. I hope at least. Not to mention the menu is basically optimized not to have you stay and hang out, its prepackaged or microwaved stuff, unlike most other local cafes where they will serve you hot food on ceramic dishware.
In Howard Shultz book about Starbucks he said one of Starbucks goals was for it to be a third place to be able to safely go to chat and socialize. Home is one, work is two. He wanted Starbucks to be able to be a/the third. Similar to what a church or pub has provided throughout history but a lot of people no longer go to church.
Readit News
People get excited because they bought a house for $200k and it's notionally worth $800k now. In reality they haven't gained anything because every house is $800k and you still need somewhere to live so you still only own one housing unit of wealth.
Worse, people actively lobby for policies that increase housing prices.
But if this house is worth $600k more where is that money coming from? It's coming from the next generation who has to pay substantially more for the same house. It's a wealth transfer from the young to the old.
How does this relate to third places? Well, imagine a neighbourhood cafe. 20 years ago that cafe space might cost $200k and have a commercial rent yield of, say, 5% so it would cost $10k/year in rent for argument's sake. Well, all property has gone up in value so that cafe's space is now valued at $800k. It still demands a 5% yield so that's now $40k/year. All the cafe's customers have to pay for that with increased prices.
So with increases in housing costs, people have less money to spend and that money doesn't go as far. At a certain point, volume goes down and the business has to either close or raise prices, further exacerbating the problem.
Rising housing costs are strangling every aspect of society.
Dead Comment
They can borrow money against the extra value of their house. They don't need to move out. That's what everybody in the landed gentry has been doing for the past two decades.
That is why the gains really are actual, useful money for lots of people.
And yet, it's a system which has, so far, outlived the others. Perhaps it is stable, after all. It certainly keeps the youth honed in on the grindstone.
There were some defectors in the 60s, and in 2008, but that was far less sustainable or, rather, failed to reach critical mass / escape velocity.
I’m not an advocate for communism either, by the way. Just regulation and proper taxation.
How is the price supposed to go up unless supply fails to meet demand?
I would be careful to read into these things too much.
Dead Comment
Somehow I don’t think petrol station seating areas will promoting a huge amount of neighbourhood entrepreneurship. I would probably look at more independent, locally-owned kind of establishments—particularly that do have seating.
I can think of a lot of critical meetings that happened in these sort of coffee shops, including a first interview for the person who is now our staff software architect, the first meeting I had with my now-business partner where we went over her product idea (admittedly that was a Starbucks), getting together to hash out ideas to solve difficult problems, and best of all, a random chance encounter because we were in a third place. This is in places as diverse as small heartland American towns, NYC, Tel Aviv, or Pennsylvania’s rust belt.
Fewer of these places means fewer of these good things happening. I don’t need a kiosk; I have an espresso machine I can operate at home or in the office.
You would probably enjoy the experience of a small, locally owned coffee shop then. Starbucks is optimizing for their profit. In my suburban city, Starbucks has closed most or all locations that were a few miles from the freeway. They built new locations with drive throughs and very little to no seating within a few blocks of every freeway onramp. This tells you what they are optimizing for.
Unfortunately, chances are encounters and warm fuzzies do not please the corporate overlords.
Are we shocked businesses are optimizing for their profit? Isn't that their purpose?
Inversely, if everyone wanted cozy shops, that is exactly what Starbucks would build.
Dead Comment
And when they convert an existing location to kiosk only, the prices do not go down.
There are two Starbucks locations in downtown Redwood City, about 250m apart. The one on the right side of the tracks has comfortable seating and tables. The one on the wrong side of the tracks, in the dying mall near the homeless camp, is kiosk only. Same prices.
Deleted Comment
They offer similar benefits to a good sized Starbucks store.
Free charging points, WiFi, bench seating in secluded corners and so on.
Though I'd wager that WiFi is less important, as people have mobile plans with plenty of data.
Given the accommodation crises in Australia, I'd suspect many students dont have a decent place to study in their homes. Many of them are sharing bedrooms etc..
I would say that the Wi-Fi is important, as the design of most UK IKEA buildings blocks mobile network signals!
Only downside is screaming kids
And yes there's bad mobile signal but Vodafone (famous for having better indoor signal I believe) works ok
I was under the impression they were subsidized.
Additionally, they are a "trap" - easy to enter, but exiting requires you to walk the gauntlet of products for sale downstairs.
There still might be a confounders, but they at least tried to control for that.
The definition of a third place is fully incompatible with it being just a remote work location: https://en.wikipedia.org/wiki/Third_place
Just watched a episode of Friends yesterday. The cafe there could be the definition of a third place. ;-)