I call three bayside cities home: Hong Kong, Vancouver, and San Francisco. They also happen to be three of the most expensive places in the world to live ^[1].

Housing prices in these three cities consistently outpace that of adjacent cities, states, and provinces. I've seen this play out across three generations, across two continents, among both family and friends. My grandparents raised my sister and me in a dinky apartment as both my parents worked full-time, and they barely had space for a bunk bed for us. My friends in Vancouver either had to move an hour away from the city to raise their families, or bought their parents' home just to stay in the neighborhood. Friends here make do with rent-controlled units, and I worked with some colleagues who would drive + BART 2–3 hours to get to the office—thankfully, only 1× a week. We were very lucky to be able to buy a home here in the Bay Area, but even that took years of searching and a bit of startup IPO luck.

These metropolitan areas are sizeable, with the main city surrounded by other towns and municipalities along the waterways. But the area populations are small compared to some of the true metropolises of the world. Vancouver's metro area has around 3 million people, while both HK and the Bay Area have 7.5 million people each—all three cities combined feature fewer people than NYC's 20 million or Tokyo's ridiculous density of 37 million people.

But my cities punch above their weight. All are known to be regional centers of finance, with Hong Kong as the long-serving financial hub connecting the East and the West. All have a mature tech industry, with the Bay Area of course acting as a global driving force for technology. And all have attracted a disproportionate amount of immigration, both within their respective countries but also abroad, acting as beacons of economic opportunity.

Each city's geographical constraints limit how much they can expand into the surrounding region. HK is dotted with hills and rugged terrain; both Vancouver and San Francisco are boxed in with bays, rivers and mountains limiting habitable land. The Bay Area, in particular, maintains good amounts of nature and open space throughout our 9 counties, which make for even less land for dense residential areas. Contrast this with the commonly-cited examples of Austin, Houston or Tokyo; they've all been able to expand housing in line with or ahead of population growth, but they also have the flat land to enable that expansion and sprawl.

The demand side of the ledger is more nuanced. Each city started as major logistical hubs; each added industries like manufacturing (HK), natural resources (Vancouver), and precious metals (SF). These industries laid the foundation for each city's evolution into tech and finance.

These are wealthy sectors that attract talent, then global capital. Real estate, as a hard asset, ends up absorbing much of this concentration of wealth. Vancouver famously enacted laws to try to counteract this affordability spiral. Bay Area techies were accused of the same a decade ago, with protests and people vandalizing company-chartered buses. Meanwhile, Hong Kong continues to wrestle with zoning laws and illegal dwellings; the city government remains unable to bring housing prices in-line with local wages. In fact, all three cities feature in the top 10 least affordable housing markets when measured by their price-to-income ratios.

The pattern here reveals that it's a combination of factors—geography, industry, then capital—that elevate housing prices. The challenge is that industry and capital are what bring prosperity to the regions, but geography takes decades of concentrated effort to improve. Perhaps there is no real solution, no way to moderate prices without undermining what makes these cities exceptional.