Austin’s surge of new housing construction drove down rents • Hacker News Board

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

#261

Post by cuuupid » Thu, Mar 19, 2026, 2:40 AM UTC

estearum wrote: post #221

pclowes wrote: post #176

Its wild how the solution to housing costs is really just: 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.

New construction has already decelerated in Austin due to falling prices, which compresses already-near-zero margin on real estate development. So yes, it really is "just build more housing." The problem is: why would you build more housing as prices fall?

It's not necessarily prices falling here but the profitability of [demand] at [price]. Like if prices fall 10% but demand rises 20%, you would want to build more housing.

This is the beauty of the free market because it guarantees three things:

[1] Real estate is generally a good investment and will hold value or appreciate in the long term, because supply will adjust to demand shocks to rescue values

[2] If people want to live somewhere, houses will be built for them to live there

[3] Real estate developers and construction are solid, safe businesses with great unit economics because building may decrease prices, but may still increase demand

It's when you constrain and restrict a market that players have to adjust and then you get crazy scenarios

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

#262

Post by komali2 » Thu, Mar 19, 2026, 2:40 AM UTC

estearum wrote: post #221

pclowes wrote: post #176

Its wild how the solution to housing costs is really just: 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.

New construction has already decelerated in Austin due to falling prices, which compresses already-near-zero margin on real estate development. So yes, it really is "just build more housing." The problem is: why would you build more housing as prices fall?

Maybe other real estate savvy people can help me understand this plus two other things I'm confused about in the housing crisis:

1. Houses are unaffordable for many Americans. To get houses to prices where they'd be affordable again would require a housing prices drop that would likely be, market-wide, significantly low enough to put a ton of people underwater on their mortgages. What is society/the government meant to do about that? Is it an insurmountable floor on how low we can get housing prices? That floor feels very close if so.

2. We've been promising the last five generations (or more) of Americans that a house is an Investment, capital I, an excellent place to keep your money. How do we overcome the political pressure to turn a house into a depreciating investment for the length of time required to get housing to be affordable again? What kind of politician would put their neck on the line to piss off every boomer and 75% of gen X and 30% of millennials, or whatever the house ownership distribution is?

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

#263

Post by epistasis » Thu, Mar 19, 2026, 2:40 AM UTC

estearum wrote: post #246

terminalshort wrote: post #224

Earlier quoted context omitted.

Because home builders don't make money by buying and selling houses, they make money by building them and selling them.

And... how is this relevant? I'm not sure what you're trying to imply here. You should spell it out explicitly.

The difference is between buying and asset and producing an asset. Even if RAM costs are falling, it can still be profitable to produce more RAM, as long as the costs are far enough below the eventual sales price.

It's entirely different if you're buying the housing already built; there's no productive activity, you're just a rentier and do not benefit at all from falling housing prices.

The differences in interests between an asset holder and a productive builder are night and day.

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

#264

Post by bsder » Thu, Mar 19, 2026, 2:40 AM UTC

pclowes wrote: post #176

Its wild how the solution to housing costs is really just: 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.

> Just build more housing.

Also "Wipe out a whole boatload of techbros who artificially inflate prices". Nobody is talking about that part of the equation.

Austin was one of the places a lot of tech folks flocked to when everybody was working online. RTO and layoffs have wiped a lot of them out. I'd estimate almost 1/3 of the tech folks that were floating around last year are now in other cities.

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

#265

Post by slyall » Thu, Mar 19, 2026, 2:41 AM UTC

CharlieDigital wrote: post #101

TulliusCicero wrote: post #33

Earlier quoted context omitted.

It's typically local residents who fight this. There's a "fuck you, got mine" tendency to pull up the ladder once you've made it.

It is more complicated than that. A few years back when my youngest entered 1st grade, I attended some meetings where the superintendent talked about school expansions in the pipeline due to confirmed property development projects. Namely, when new housing is added, there are infrastructure considerations and corresponding expenses that translate to higher taxes . Civil planners have formulas for how much the student…

Except you get exactly the same opposition in places where schools are funded by a higher level of government

and if anything you taxes will go down because they are now spread across more households.

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

#266

Post by estearum » Thu, Mar 19, 2026, 2:42 AM UTC

cuuupid wrote: post #261

estearum wrote: post #221

Earlier quoted context omitted.

New construction has already decelerated in Austin due to falling prices, which compresses already-near-zero margin on real estate development. So yes, it really is "just build more housing." The problem is: why would you build more housing as prices fall?

It's not necessarily prices falling here but the profitability of [demand] at [price]. Like if prices fall 10% but demand rises 20%, you would want to build more housing. This is the beauty of the free market because it guarantees three things: [1] Real estate is generally a good investment and will hold value or appreciate in the long term, because supply will adjust to demand shocks to rescue values [2] If people w…

> Like if prices fall 10% but demand rises 20%

Not as a developer you wouldn't...

You already have razor thin margins. Prices going down 10% means you cannot get financing for your project.

Holding real estate is generally a good investment. Developing real estate actually is not.

> Real estate developers and construction are solid, safe businesses with great unit economics

No they are not lol

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

#267

Post by KPGv2 » Thu, Mar 19, 2026, 2:42 AM UTC

triceratops wrote: post #247

ms_menardi wrote: post #239

Earlier quoted context omitted.

And yet, gentrification.

God forbid bad parts of town ever get good.

That's not what gentrification is. Relevant to this article, I lived through the gentrification of large parts of Austin in the early 00s.

What happened was that good housing full of artists and musicians and other self-employed creatives began gentrifying, driving up property values, which drove up property taxes, which became unaffordable to the existing residents (who had owned their homes for a long time). Many (actually, most) of these artists had to sell and leave.

They often left for other cities. But hey at least the good houses everyone liked all got torn down to be replaced by McMansions for the influx of techbros.

Austin still has that slogan, "Keep Austin Weird." It failed. Austin isn't weird anymore. The University of Texas still is responsible for a lot of great stuff about Austin, but huge chunks of the city are just boring these days. There's certainly much less interesting culture happening. It's been airbnbified.

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

#268

Post by armada651 » Thu, Mar 19, 2026, 2:43 AM UTC

lurk2 wrote: post #230

wcfrobert wrote: post #169

Earlier quoted context omitted.

NIMBYism has never been about preserving neighborhood characteristic, or noise and traffic concerns. Menlo Park is not Big Sur. Sure, some concerns are reasonable and should be investigated, but most of the time they're bureaucratic distractions that's been weaponized by people who want to delay progress and protect their investment. For most Americans, A house is their primary savings account, retirement plan, and p…

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> If NIMBYs were primary motivated by making money the prudent thing to do would be to support unrestricted zoning and then develop or sell the lot.

That is highly dependent on what exactly is being built next to your home. Sure, if it's more luxury housing then it'll probably drive the value of your home up. If it's low-income housing then it probably won't. And what we need is more of the latter rather than the former.

> you can take out loans against the value of the equity but this isn’t particularly common.

It's because it's an investment, you're going to get the return once you finally sell your home. Only in a pinch if someone needs a large amount of money to start a business or pay for an emergency will they mortgage their house.

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

#269

Post by cuuupid » Thu, Mar 19, 2026, 2:43 AM UTC

slg wrote: post #249

terminalshort wrote: post #227

Earlier quoted context omitted.

Affordable housing is the only type of housing that will ever be built. Builders aren't so stupid as to build products that their customers can't buy. Government intervention is not needed.

I'm not sure if you're intentionally changing the definition of "affordable housing" in an attempt to make the desire for it seem silly or if you genuinely don't know how the term is typically used. But what you're describing is generally referred to as "market-rate housing" and not "affordable housing".

Affordable housing = housing that regular people can afford

The only silly thing here is that "low income housing" got rebranded as "affordable housing" and absolutely everything else got rebranded as "luxury homes" for political reasons.

"Market-rate housing" is even sillier given that it is literally the opposite of what "affordable housing" policies dictate

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

#270

Post by terminalshort » Thu, Mar 19, 2026, 2:43 AM UTC

ryanmerket wrote: post #237

bluGill wrote: post #159

Earlier quoted context omitted.

You can't start a new city. I city exists for all the things you can do. Your new city will have nothing to do because nobody lives there and there are no jobs to attract anyone to move. that is why we build suburbs - they get anound this by being right next to a place with everything you want in a city

Sure you can. You just need enough land and money to start basic things like a post office, city hall, courthouse, roads, and a way to get power to the whole thing. See Starbase, Texas

Starbase TX isn't a city in any sense other than a legal designation. It's a massive SpaceX industrial facility that has its own municipality similar to the way Disney World has one for its park.