Look back 30-40 years: * Places like the Lower East Side of Manhattan were magnets for broke artists because they were dirt cheap places to live. * San Francisco neighborhoods like SOMA were similarly inexpensive. A few people with meager incomes could go in together and rent a warehouse to live in. * London had numerous squats: housing stock so unvalued that it wasn't worth stopping people just moving in for free. Think about property values in those places today.

In the past 60 years we've witnessed a remarkable cycle. First you had the "white flight" to the suburbs starting in the late 1950s or so. By 1980 the general consensus seemed to be that central cities were doomed forever to poverty. Now the trend is reversed and people want to pour back in. However, the regional population is much larger than when this cycle started so central housing has become a scarce resource.

The article is mostly about forces particular to the London market though. It is amazing how high property values have gone there. I live in San Francisco so I think I'm fairly accustomed to high prices, but visiting London and seeing mews houses going for £3m still blew my mind. Another peculiarity of the UK market is that a lot of property trading are just leaseholds, so you don't even really own the house after you "buy" it. (There are "freeholds" for sale as well, but that's even more expensive) Lovely city, but it does make you poor.

Actually it totally cycles. Availability of cars as well as a government policy encouraging home ownership (cheap loans) created a shift of people moving out to suburbs. If you're really familiar with the biggest cities, you can see this shift over time and it happens with subways and commuter rail lines too. Certain areas of New York's outer-boroughs have seen large shifts in class/demographic over the past 200 years. Coney Island used to be a resort/hotel town for the mega rich. With cars and the completion of major highways, the rich moved out to Westchester and Long Island. The subway eventually reached Coney Island and it became a poor neighborhood. It is now starting the swing back the other way because of new construction and the convenience of the Q line. The biggest shift happened right around when the subway lines were first connected at Times Square and the companies merged.