U.S. Postal Service workers used to be able to afford Manhattan’s Upper East Side. When a young Lee Harvey Oswald moved with his mother Marguerite to New York City in 1952, they lived for a time with Marguerite’s postman son, Lee Harvey’s half-brother, on East 92nd Street.
The oddity of a postman living where doctors, investment bankers and lawyers live now speaks to the so-called “affordability problem” that Mayor-elect Zohran Mamdani ran on, but it more optimistically indicates the source of New York City’s lack of affordability: an enormous influx of talented people in the 73 years since Oswald was briefly a resident.
It’s hopefully a reminder that the rising cost of living isn’t all bad and it’s not always an effect of government error. To a high degree it’s an effect of demographic change that signals booming economic growth, and the inflow of talent to capitalize on the growth.
As is well known, to solve what Mamdani errantly sees as a problem of price he’s promised a “rent freeze.” About Mamdani’s planned employment of price controls to foster affordability in one of the world’s most expensive cities, words won’t be wasted here explaining the inevitable loss of housing supply when politicians impose a ceiling on what can be charged for it. New Yorkers already know this. It’s better to simply pivot to Nvidia co-founder Jensen Huang’s authoring of an Artificial Intelligence (AI) revolution.
At Nvidia’s recent Global Technology Conference in Washington, D.C., Huang revealed a much more realistic path to housing affordability. Talking about AI, Huang observed that it’s “not a tool, AI is work.” What Huang meant is that microchips that continue to grow in power as their size shrinks will soon enough do the work and thinking of millions, and eventually billions of humans.
It's worth thinking about the coming AI advances with New York City top of mind. It’s expensive precisely because the drivers of its immense prosperity are impressively talented humans who require housing in addition to the myriad other needs of productive, acquisitive people.
When New York City is thought of as an expensive effect of a talent influx, the genius of what Huang and Nvidia are doing hopefully becomes more evident: with its microchips, Nvidia is transporting the equivalent of millions and eventually billions of Silicon Valley-capable workers and thinkers to cities and states across not just the U.S., but the whole world. AI is once again work, and thought, with herculean amounts of both on the doorstep of automation.
While it has long been true that rising rents and housing prices have invariably been an effect of the people who power economic growth, the rise of AI means that cities, towns and countries won’t as much require the human input necessary for progress.
Just as entrepreneurs will need fewer people to turn their visions into prosperous reality, so will cities and towns need fewer people to achieve enormous amounts of economic growth. While Americans will still cluster in cities like New York as is their social wont, the affordability challenge of migrating to where the talented are will shrink.
The not-so-insightful truth is that Mamdani’s affordability agenda is anything but. Markets bend to no one. Thankfully Huang, Nvidia and Silicon Valley are making prosperity an anywhere concept, and for doing so they’re substantially pushing down the cost of being where the action is.
