Meanwhile, California is also trying to build housing near transit, but Menlo Park wants to preserve the character of downtown by preserving dirty, cracked, flat, surface-level parking lots like it's 1950.
Austin’s surge of new housing construction drove down rents
11–20 of 1001 posts
Re: Austin’s surge of new housing construction drove down rents
#12I mean… duh? Genuinely baffled at people struggling to understand this. When there’s more of a thing, it costs less. Which is good when that thing is essential, like housing.
Not sure the idea of housing being an asset which endlessly accrues value is good for anybody involved, long-term. Open to disagreement, though! I’m no economist.
Re: Austin’s surge of new housing construction drove down rents
#13how surprising, never would have seen that coming
Re: Austin’s surge of new housing construction drove down rents
#14Similar phenomenon in several cities: https://substackcdn.com/image/fetch/$s_!vg94!,f_auto,q_auto:...
Re: Austin’s surge of new housing construction drove down rents
#15I mean… duh? Genuinely baffled at people struggling to understand this. When there’s more of a thing, it costs less. Which is good when that thing is essential, like housing. Not sure the idea of housing being an asset which endlessly accrues value is good for anybody involved, long-term. Open to disagreement, though! I’m no economist.
I guess the confounding factor is that the population isn't fixed. Greater construction could result in population growth which cancels out the gains from greater supply. You'd have to build faster than population growth to lower prices. And generally developers aren't looking to do that.
Re: Austin’s surge of new housing construction drove down rents
#16Good news - experimental verification of the law of supply and demand! I'm sure the analysis is welcome though and I hope policy makers try to learn from this. We could densify most american cities quite a lot more.
Developers not recouping their investment will discourage less housing in Austin in the future and it will become expensive again. A lot of our current housing shortages are from the build up in 2008 and an implosion of the entire industry (so that crafts people did not really exist for the next need for housing).
They can recoup the investment with volume (especially apartments) I would think? Sell 10 houses at 2 million each or 30 at 1 million each or however it breaks down.
Re: Austin’s surge of new housing construction drove down rents
#17You mean to tell me that increasing supply lowers price? Fascinating.
Who would've thought?!
Re: Austin’s surge of new housing construction drove down rents
#18I mean… duh? Genuinely baffled at people struggling to understand this. When there’s more of a thing, it costs less. Which is good when that thing is essential, like housing. Not sure the idea of housing being an asset which endlessly accrues value is good for anybody involved, long-term. Open to disagreement, though! I’m no economist.
People are quick to point out that induced demand exists - especially people that aren't fond of change.
Very broadly speaking, people mis-estimate effect sizes in economics by orders of magnitude. Induced demand is just their foothold to claim an effect exists, before they go about claiming the effect size they want to see.
Re: Austin’s surge of new housing construction drove down rents
#19At a glance, I'm a bit skeptical. It looks like they're cherry picking the high point for rent (the COVID spike). > "Rents fell. In December 2021, Austin’s median rent was $1,546, near its highest level ever and 15% higher than the U.S. median ($1,346)." Of course having more housing should, all things equal, lower rent. But all things certainly weren't equal, especially during this time period.
[flagged]
Re: Austin’s surge of new housing construction drove down rents
#20>>> The city changed zoning regulations to allow construction of large apartment buildings, particularly near jobs and transit. In 2018, voters approved a $250 million bond measure to build and repair affordable housing. Permitting processes were reformed to speed development and reduce costs. All three of the five things most economists say about house building - and each one will hit house owning voters hard making…
> and each one will hit house owning voters hard making it hard to replicate
In a negative way?