I'd argue it's actualy the proximity to wealth. Hamptons is not regulated, and look at their prices. Finance, Law, medicine, and Media are all either pyramid pay or actual legal monopoly businesses. The rest is made on inside information, that stems from access that wealth brings to political, academic, and philanthropic circles. Not that there is anything wrong with that, its just how the 'world works' in many ways.

In any event, real estate is the ante to play the game. The proximity to power breeds value for two reasons: lust (in those who lack power) and practicalities (for those who have power, and want to keep it). Its worth noting that owning real-estate is about excluding other people from using it. High real estate prices force out competitors that migh otherwise use the assets to create a competing culture.

I'm very interested to see what DFW looks like in a couple of decades if it keeps growing rapidly. Will it be a sort of sprawl of still-low-density suburbia for over a hundred miles E/W or N/S? Will a significant density increase in the core eventually come after hitting some kind of "maximum suburb distance" for most people? Currently it's at about half the number of people as the LA area in a similar footprint, but unlike LA it's not surrounded by mountains and ocean and could keep growing outward forever.

This is another fair point, but consider the land is massively more expensive. The dynamic is relative scarcity and bargaing power. The more scarcity, the more the economics look like monopoly on the underlying asset. At that stage, the cost of building out is sort of second order.

The other examples, such as London, Geneva, and SF have a combination of massive wealth (in both flow and assets stocks) combined with constraints on the ability to build due to geography/history/etc.

I agree some of ths (like greenbelt and listed buildings in london) is by way of law, but most rent control follows from the combination of scarcity/wealt co-existing prior to legislative means to "provide access". In other words, those laws follow the sort of self-evident understanding that if left unchecked, the dynamic of quasi-monopoly rents being extracted from the real-estate market will lead to all kinds of bad things down the road (social tension, and its variants, primarily).

The other counter-example perhaps to chicago or LA is tokyo (which is pretty spread out). But again, there is a social dynamic of scarcity (JP is very hiercarchial/aristocratic society) and Tokyo is both the financial/business and political capital of JP. Even in the 80's the somewhat absurd cost/ft did not hinder people from needing to be in Tokyo for their careers. Rather, the all just gave up having more than 1 kid to afford the astronomical cost of living. A generation later, the population growth is almost not feasible given the entrnched cost structure of real-estate and the need for the few young (workers) to support the many old (retired).

But, does it still cost less to build up than out, in a city with nearby land for the cheap, taking into account that you have to build your upward development in a way to be competitive with 2000+ square foot houses and yards? There's definitely some upwards building being done in the cores of the cities in Texas, but a whole lot more building out. Overcoming the lack of urban planning in the past is where it would get pricey, and need a lot of buy-in.

Would you say the relative cheapness of housing in a lot of Chicago compared to more mountain- or water-locked cities has more to do with the planning/regulatory environment or with the open geography on the non-lake sides?

EDIT - Apparently this has been 'debunked', although the debunking might just be an alternate theory. http://observer.com/2012/01/uncanny-valley-the-real-reason-t...

It's a mixture of regulatory corruption and price inelasticity. Prestige is just one of many Manhattan's demand drivers that, due to the inelastic nature of the price curve, drives it up.

Regarding school, I think it's both. The question is why these rich people don't want their kids going to school with such people. I think it still comes down to college (and possibly prep high school; nothing before HS matters from a connections perspective) admissions. If college admissions gave as much of an advantage to white, middle-class students of NYC public schools as they do to Andover and Dalton grads, these people would quickly change their strategy.

That's the kicker, the average white, middle class student in NYC can't compete with the public school kids @ Stuyvesant and Bronx Science where minority enrollment is 70%+, they are getting their asses handed to them by Asian students. Hence the flight to private schools where tuition is the same as private universities to keep the immigrant kids at bay. I should know, I was one of those immigrant kids in prep school and would've been eaten alive if I attended public HS.