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Austin’s surge of new housing construction drove down rents

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Re: Austin’s surge of new housing construction drove down rents

#51

Post by JumpCrisscross »

strbean wrote: post #47
JumpCrisscross wrote: post #41

Earlier quoted context omitted.

> Developers not recouping their investment Last time I did the back-of-the-envelope math, financing permitting delays in San Francisco added 10% to the cost of new housing [1]. (Note: not the cost of permitting. Just the cost of financing the delay.) This is deadweight loss that everyone in the transaction wins from eliminating. One could absolutely see lower prices and higher developer margins if this waste were cu…

> everyone in the transaction wins Nobody ever thinks of the poor banks!

> Nobody ever thinks of the poor banks!

I thought about that. But a bank would rather lend in lots of high-confidence, low-duration deals than a small number of high-margin deals. The only people who lose when housing is built are incoment landowners. Because prices go down.

Re: Austin’s surge of new housing construction drove down rents

#52

Post by rconti »

strbean wrote: post #42
rconti wrote: post #11

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.

To be fair, parking structures always look and feel pretty distopian. I like the approach of making downtowns walkable and having a bit of parking at the periphery of downtown, along with good public transit. Encourages people to use public transit to get to town in the first place. Downtown residents can use transit or a zipcar or equivalent when the need to get out of town, instead of devoting a ton of space downto…

Well, in Menlo Park they're just flat surface parking lots, not even multi-story structures. The planned development is multi-story housing with parking underneath.

To be fair, I am boycotting the (similar) underground garage over at Springline because they're clearly made only for people in Range Rovers or whatever. They have those AWFUL ticket machines, set too far back (to avoid getting hit) and too high to access from a normal car.

Re: Austin’s surge of new housing construction drove down rents

#54

Post by lo_zamoyski »

strbean wrote: post #47
JumpCrisscross wrote: post #41

Earlier quoted context omitted.

> Developers not recouping their investment Last time I did the back-of-the-envelope math, financing permitting delays in San Francisco added 10% to the cost of new housing [1]. (Note: not the cost of permitting. Just the cost of financing the delay.) This is deadweight loss that everyone in the transaction wins from eliminating. One could absolutely see lower prices and higher developer margins if this waste were cu…

> everyone in the transaction wins Nobody ever thinks of the poor banks!

Usury-as-a-Service.

Re: Austin’s surge of new housing construction drove down rents

#55

Post by JumpCrisscross »

tonymet wrote: post #35

what they didn't mention is that supply didn't impact rents until the large remigration back out of Austin

> what they didn't mention is that supply didn't impact rents until the large remigration back out of Austin

This has been studied to death. But just like soybean farmers in Idaho voting for tariffs on China it seems a category of urban renter is more wedded to ideology than self interest.

The Austin metro area's population is up [1][2]. Austin's GDP is up [3]. Migration per se doesn't explain a phenomenon that is robust across cities, countries and centuries.

[1] https://www.macrotrends.net/global-metrics/cities/22926/aust...

[2] https://en.wikipedia.org/wiki/Austin,_Texas#Demographics

[3] https://fred.stlouisfed.org/series/GDPALL48453

Re: Austin’s surge of new housing construction drove down rents

#57

Post by epistasis »

lumirth wrote: post #12

I 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.

If you try to take any local action that might lower housing prices or even keep them steady, you will likely be stymied by a large contingent of people that deny that new housing could ever raise rents.

The idea that supply and demand don't apply to housing is quite popular:

https://www.jstor.org/stable/27397156

And the very few academic articles that try to refute housing supply lowering prices get a lot of press:

https://hellgatenyc.com/take-that-ezra-klein/

Even when it's not peer-reviewed and contradicts a ton of more serious research attempts, a bid of research which rarely gets popular press coverage.

It's like climate denialism, there's huge demand for denialist positions and very little research to back it up, so the press does not reflect the research.

Re: Austin’s surge of new housing construction drove down rents

#58

Post by tkel »

riknos314 wrote: post #4

So glad we don't need to re-write the first chapter of almost every economics 101 textbook!

They also teach you about elasticity in econ 101. It's foolish and anti-intellectual to insist that the housing market has only two factors, while simultaneously condescending about your understanding of economics shows that you really don't understand economics, it's more about your ego.

Re: Austin’s surge of new housing construction drove down rents

#59

Post by matheweis »

atomicnumber3 wrote: post #21
seanmcdirmid wrote: post #9

Earlier quoted context omitted.

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).

So, do we just need to nationalize housing construction? If the free market apparently just can't handle it?

It’s not a free market construction issue at all, it’s a regulatory zoning and permitting issue.

Read the article and the peer comments here; Austin’s boom came about from reducing regulatory constraints.

Nationally remove the artificial restrictions and the supply side will fix itself.

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