171–180 of 1001 posts
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Their land, labor, and material costs aren’t trivial. If thy were pulling a 10-20% margin before, how will increasing volume (which increases costs) make it up?
They reinvest that generous 10% to buy more tools and hire more talent to build 10x as many homes at 2%. Seems pretty straightforward to me
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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).
What evidence is there that developers won't break even or profit? The demand is clearly there, it's a seller's market.
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> To be fair, parking structures always look and feel pretty distopian. What a lot of the new buildings in Austin are doing is putting an attached garage directly behind a 4 + 1 mixed use development - the street-facing facade is the apartments and shops, and the garage is directly behind (and usually attached) to the apartments. You basically never see them.
They put it in the middle usually. It’s literally called the “Texas Doughnut” — a 5 over 1 surround a parking garage.
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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…
Is the Bay Area really dealing with ticket machines? The global capital of technology? Just bill by plate or something.
It’s mainly due to the state of US technological advancement decades ago when the whole thing got started, the general US-level business-friendly environment, and the presence of an extremely prestigious (especially in science and tech fields) university nearby.
Dumb question, many cities suffer from extremely high property (i.e. land) prices. I understand the NIMBY barrier. But I don't understand why it isn't more common to simply.. start a new city. Especially in countries like Australia where property prices are sky high and alternative places for setting up a new city are abundant. Maybe internet connectivity was previously a barrier, but now.. starlink. I put this quest…
Build more housing. Keep law and order.
No it doesn’t need to be “affordable”. Yes rent control is a terrible idea.
Just build more housing.
Note: that the US already has plenty of housing and housing costs basically go up in areas of low crime relative to economic opportunity. If you build housing, but allow crime to rise, you have wasted everybody’s time.
I'll admit ignorance here, but I've been skeptical of the claim that new construction drives rents down. What I actually see is: a luxury apartment building goes up, surveys the market, and sets its rents 30% higher for the privilege of living in a new building with a gym for dogs or ball pit or whatever. Then the older buildings say, "Well, we can raise our rents 20% and still be the best deal in town," and so on. M…
If the older buildings are able to raise prices 20% with no increase in vacancies after the new build, the new build not coming in would mean those older buildings rent would be bid up more than 20%.
The people moving in who could have afforded the 30% more expensive luxury units will just have to pick from the older units and outbid lower income people for spots in this low supply, growing city (under no other scenario could you crank up rent on aging stock 20% without losing to competing landlords).
I'll admit ignorance here, but I've been skeptical of the claim that new construction drives rents down. What I actually see is: a luxury apartment building goes up, surveys the market, and sets its rents 30% higher for the privilege of living in a new building with a gym for dogs or ball pit or whatever. Then the older buildings say, "Well, we can raise our rents 20% and still be the best deal in town," and so on. M…
My understanding of the situation is that luxury apartments do indeed gentrify neighborhoods (i.e. they increase the local rent and drive displacement of locals that can't keep up with those rent increases).
However, across the entire city, it slightly eases rent pressure by providing additional housing supply.
So, like you mentioned, if you get enough housing across many neighborhoods, you can drive down rents. Otherwise, that luxury complex in your neighborhood might only be helping ease rent pressure in other neighborhoods.
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I'm not clear: does Econ 201 inform us as to how demand and supply are not related to price?
Yes, you learn why supply + demand curves do not actually describe many markets
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it's crazy that people nowadays seriously question basic market pressure being a thing
I'm with you, but many people still question this. Here's a recent pre-print paper that was in the news arguing that inequality, not lack of supply, is the real source of housing affordability: https://osf.io/preprints/socarxiv/95trz_v1