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

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

#281

Post by KPGv2 » Thu, Mar 19, 2026, 2:48 AM UTC

armada651 wrote: post #268

lurk2 wrote: post #230

Earlier quoted context omitted.

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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 for…

> It's because it's an investment

The home you live in isn't an investment; it's a store of wealth.

Many lives were ruined by thinking your primary home is an investment.

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

#282

Post by caditinpiscinam » Thu, Mar 19, 2026, 2:48 AM UTC

You say progress, I say enshittification.

What this article says: *The median apartment rent in Austin has dropped X% over the past 5 years*

What this article does not say: *Apartments in Austin cost X% less to rent now than they did 5 years ago*

It's completely possible for the cost of the average apartment in a city to go down, while the cost of existing apartments increases. How does this happen? The enshittification of rentals. Units get smaller (apartments in Austin are shrinking), they get built near highways (air pollution), they lose amenities like parking, they pop up places where they previously weren't allowed (smaller ADUs, basement units, see article), they get subdivided (landlord throws up a wall and turns a large 1br into a cramped 2br).

If supply and demand were really working the way its heralds claim, then we'd see the price of existing units going down. This article offers no evidence that this is happening. I don't believe for a minute that it is.

Instead, it's the same story as always: your rents will keep going up. You can move somewhere cheaper and shittier if you want. The people who profit will congratulate themselves while decrying the thing they actually fear: rent control.

https://www.statesman.com/story/business/real-estate/2025/05...

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

#283

Post by cyberax » Thu, Mar 19, 2026, 2:48 AM UTC

svpk wrote: post #185

cyberax wrote: post #164

Earlier quoted context omitted.

> When there’s more of a thing, it costs less. Yeah, and when we add lanes to roads, the average speeds increase and commutes get shorter. Right? Also, if the government gives me $1 billion, then I'll be rich. But what happens if the government gives everyone $1 billion? Everyone will be rich, right?

... Your examples seem to undercut your point if I'm understanding what you're trying to say. In your first example the "cost" in the form of traffic etc. was reduced so more people "buy" in the sense that they go on the road until you reach a new "cost" equilibrium. In practice that equilibrium is quite close to the original cost so it doesn't fix the issue traffic. But if that same number of people had driven befor…

> ... Your examples seem to undercut your point if I'm understanding what you're trying to say.

That perhaps you shouldn't assume that kindergarten-level theories always correctly describe complex markets?

> In your first example the "cost" in the form of traffic etc. was reduced so more people "buy" in the sense that they go on the road until you reach a new "cost" equilibrium.

So go on, do continue this line of thinking. You built more houses.... then what?

Feel free to refer to my explanation: https://news.ycombinator.com/item?id=47433743 - as usual, downvoted by people who can't face the truth.

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

#284

Post by bsder » Thu, Mar 19, 2026, 2:49 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…

> [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

Real estate is NOT supposed to be a good "investment" and only became so because the government started propping it up with bank bankstops, zoning, NIMBY, redlining, etc. If your pricing is working correctly, real-estate should be close to zero-sum.

Austin, in particular, had several nasty bust cycles where real estate prices tanked after overbuilding which is precisely what kept the cost of living under control. Alas, that is a thing of the past after 2008 when everybody realized that the federal government will backstop the banks "Real estate number must always go up! Brrrrr!"

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

#285

Post by mmooss » Thu, Mar 19, 2026, 2:50 AM UTC

KPGv2 wrote: post #267

triceratops wrote: post #247

Earlier quoted context omitted.

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 (…

> good housing full of artists and musicians and other self-employed creatives

It looks like - it might not be what you mean, but it looks like - you're saying 'good housing' is housing that has "artists and musicians and other self-employed creatives", as opposed to poor working people.

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

#286

Post by epistasis » Thu, Mar 19, 2026, 2:50 AM UTC

estearum wrote: post #271

epistasis wrote: post #263

Earlier quoted context omitted.

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…

> it can still be profitable to produce more RAM, as long as the costs are far enough below the eventual sales price. Right... my point is that the costs are not far below the eventual sales price. That's why construction is slowing down. And as mentioned several other times, it's actually not as simple as cost > sale price. It's margin > margin of alternative investments of similar scale and risk profile.

It was not clear that it was your point at all! Yes of course, gotta get your return on capital invested or the money goes elsewhere, probably into a REIT that invests in the existing assets and drives up prices even further. Because the demand for housing goes somewhere: either existing owners profit or the people building and alleviating the shortage profit.

Every single municipality in the US I'm familiar with has done everything they can to make it expensive to build and try to remove any profit margin from building. Which leads to capital moving towards piggybacking on the rentierism of the average homeowner, the people who control the policies that make it unaffordable to build.

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

#287

Post by terminalshort » Thu, Mar 19, 2026, 2:51 AM UTC

KPGv2 wrote: post #267

triceratops wrote: post #247

Earlier quoted context omitted.

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 (…

My heart breaks for those poor people whose houses became worth multiple times what they paid for them. A true tragedy. I would be devastated if my house became so valuable that the property taxes were more than I could afford.

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

#288

Post by bpt3 » Thu, Mar 19, 2026, 2:51 AM UTC

epistasis wrote: post #275

komali2 wrote: post #262

Earlier quoted context omitted.

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…

There's a big difference between land prices and the building prices. When costs rise 5% per year for a house that's untouched, that's almost entirely the land price going up. You can make housing cheaper by putting more houses on the same amount of land. In high cost areas, the price of land dominates the cost of housing. Political pressure to change the investment nature of housing can come from various directions,…

> Politically, we must stop prioritizing the views of homeowners at the local level. They already got their reward, massive unearned capital gains on their residence, there's no need to give them priority on land use over the general needs of society.

They are the majority of people in most areas, so it does make sense that they would be given priority in some ways.

The rest of your post is unsubstantiated vitriol, which isn't exactly convincing.

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

#289

Post by pclowes » Thu, Mar 19, 2026, 2:51 AM UTC

slg wrote: post #217

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.

This comment is phrased as if the article is confirming these points when it either doesn't mention them or even directly refutes them. First there is no mention of either crime or rent control in the article. But more importantly, it states that "A key piece of Austin’s strategy has been to encourage the construction of affordable housing." So why are you concluding that affordable housing isn't needed?

In this case affordable housing nets out as a way to overcome policy barriers to market rate housing. So it actually makes the market freer.

Many other implementations of affordable housing further raise the barrier and thus even if any is built it doesn’t help widespread housing affordability issues.

Rent control is just another flavor of housing affordability policy that often (always?) backfires.

Crime, social peace, and economic opportunity are very linked. A lot of house prices in urban areas are wildly distributed and often the increase cost is to buy distance and safety (often just a couple blocks) from high crime areas.

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

#290

Post by TimorousBestie » Thu, Mar 19, 2026, 2:52 AM UTC

triceratops wrote: post #251

ms_menardi wrote: post #242

Earlier quoted context omitted.

This logic assumes that 35% of Americans WANT to rent their home. Which seems odd to me, if only for financial reasons - why would you pay 1400$ for a 1 bedroom apartment when you could pay 700$ in a mortgage for that same apartment if you could have bought it?

If you invent a scenario where the mortgage is half the rent then buying is a no-brainer. Does that reflect reality?

Maybe not half, but it’s pretty common around here (generic midwestern city) for renting to be more expensive than a comparable mortgage.

Many landlords seem to expect to pay their mortgage and property taxes and maintenance with the rental income, and still net a profit, if r/landlord is to be believed.