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Living here would be an absolute pain. Apart from the obvious fact of having to dive through the cave if you lack a flying pokemon, the crater surrounding the town would cast a shadow, limiting the amount of direct sunlight by maybe 6 hours per day. Like living in a perpetual British winter.
There's also no bridge across this section of water in the middle which means if I live on the right side of town, and I need to visit the mart for some eggs and milk, I've got to ride my pokemon over. There would probably be some kind of ferry service with a couple of Lapras stationed at each end, which is a lot more effort than building a fucking bridge. At least those retards in Pacifidlog actually made an effort.
And if that all wasn't bad enough, directly below you is a sleeping pokemon capable of bringing about the apocalypse.
Sure, it's a quaint little town, where you get to talk to downies about how big your Barboach is all day, but if I was unfortunate enough to be born there and raised by idiots who thought that was a proper place to live, the moment I was old enough, I'd be on the first Fearow to Mossdeep.