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

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

#341

Post by adrianN » Thu, Mar 19, 2026, 3:24 AM UTC

wcfrobert wrote: post #169

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.

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…

I'm not sure why new housing devalues old housing. In my mind, higher density generally makes an area more desirable (e.g. because higher density enables more jobs, better infrastructure) and raises the value. Imagine as an extreme example and existing house in the middle of nowhere around which a metropolis is developed. Surely the value of the house, or at least the land it is built on, goes up, even though it loses its "cabin in the woods" appeal.

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

#342

Post by eks391 » Thu, Mar 19, 2026, 3:24 AM UTC

gnopgnip wrote: post #319

estearum wrote: post #271

Earlier quoted context omitted.

> 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.

Dr Horton is the largest builder in the US. In q3 2025 they had a 21.8% gross margin.

As someone who is not versed in real estate, I don't see why your comment and parent couldn't both be true. Is Dr Horton building homes in Austin? Are the margins in Austin pulling down their average margin? That could explain high profit while dissuading new construction in Austin. *I don't know the answers to either of these questions, but of you do, that could provide some "proof" for either side of the argument, depending on what the answers are.

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

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Post by adrianN » Thu, Mar 19, 2026, 3:28 AM UTC

sgc wrote: post #337

adrianN wrote: post #333

Earlier quoted context omitted.

There is the possibility that the government builds housing, since the government doesn't have to care about direct profits and can include the overall economic effects of affordable housing in its calculations. We don't expect much direct profits from roads either, but we keep building more and more of them.

That is a good idea that requires careful attention to make sure it has near-perfect execution. Because we do that, and they are called 'the projects'.

I'm under the impression that more supply=lower rents, even if execution is not perfect, but I'm not an economist.

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

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Post by cuuupid » Thu, Mar 19, 2026, 3:28 AM UTC

slg wrote: post #335

cuuupid wrote: post #323

Earlier quoted context omitted.

You are quite literally debating what the definition should be, because this is _not_ the existing definition of affordable housing, it is legally what OP is saying. "Affordable housing" is just when the household spends What >you In recent years, most 'affordable housing' policy has been advanced by progressives, who use that term for marketing purposes, whereas the actual policy primarily relates to 'low income hou…

Those definitions aren't in conflict. The "progressive" definition is just the applied version of the "HUD" definition scaled to local income levels.

There is no "progressive" definition, income level is not at all part of the definition. Per the universal legal definition of 'affordable housing,' if a home costs $1B but is occupied by Elon Musk, it would still be affordable because it is less than 30% of his gross income.

When you are dealing with income levels it is universally called 'low income housing,' and the HUD definition is already scaled to local income levels, the 'A' in AMI stands for 'Area.'

You are conflating marketing ('we need more affordable housing!') with policy ('low income housing')

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

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Post by EQmWgw87pw » Thu, Mar 19, 2026, 3:29 AM UTC

mcmcmc wrote: post #127

narrator wrote: post #67

Earlier quoted context omitted.

[flagged]

> In California people are very scared of poor people because they tend to commit more crime and the justice system refuses to prosecute and imprision them, especially if they are criminally insane. Funny to read this when it’s common knowledge the rich commit so much tax evasion the IRS doesn’t bother investigating, and tech billionaires like Thiel are regularly abusing hard drugs and spewing unhinged theories about…

What you pointed out doesn’t change the argument. That IS a main driver for NIMBYism in wealthy areas, even if they’re wrong or misguided, even if it’s just false perception. Don’t really know how doing some whataboutism will change that. I think most people would likely choose to live next to a tax avoider over a violent criminal?

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

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Post by pfdietz » Thu, Mar 19, 2026, 3:30 AM UTC

estearum wrote: post #258

spongebobstoes wrote: post #256

Earlier quoted context omitted.

it doesn't matter if prices are falling or rising, it only matters how the ROI of building compares to other investment opportunities we can also make it cheaper to build. easing taxes on imported materials, bringing in more skilled labor, expediting permits, and even direct subsidies like tax breaks

> it doesn't matter if prices are falling or rising, it only matters how the ROI of building compares to other investment opportunities Correct, which it basically doesn't in Austin, which is why construction is decelerating. > we can also make it cheaper to build Yep, this is the only structural solution. The "just add supply" runs into the problem of price equilibriums. The reality is the input costs of building ho…

The problem is it can't drive prices below what the free market would dictate?

Talk about praising with faint damns.

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

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Post by 9rx » Thu, Mar 19, 2026, 3:32 AM UTC

estearum wrote: post #245

pembrook wrote: post #229

Earlier quoted context omitted.

Construction costs don't scale linearly with rent prices, it's a different market altogether that depends on regulation/worker supply/material costs/equipment/etc. As long as construction costs remain below the value of the units all-in, there's profit motive for developers to build.

> As long as construction costs remain below the value of the units all-in, there's profit motive for developers to build. Not true Real estate development is extremely capital intensive and therefore it's a question of all-in cost of capital compared to other investment opportunities.

The opportunity cost has already factored that in. Unless you think cost calculations are arbitrarily forgetting to include certain costs for no reason?

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

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Post by [deleted] » Thu, Mar 19, 2026, 3:36 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?

[deleted]

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

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Post by austhrow743 » Thu, Mar 19, 2026, 3:39 AM UTC

komali2 wrote: post #291

cuuupid wrote: post #261

Earlier quoted context omitted.

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…

It seems to me that the market will select for urban sprawl though which is a negative for society but has the highest margin. E.g. Houston suburbs, miles and miles of cheap to fab single family homes that turn it into a suburban hell scape where you have to drive everywhere. I don't think the free market is giving the promises you say it is - supply isn't elastic for real estate if nobody's building because there's…

Why are you accrediting Houston to the free market rather than Tokyo?

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

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Post by OneDeuxTriSeiGo » Thu, Mar 19, 2026, 3:39 AM UTC

sgc wrote: post #337

adrianN wrote: post #333

Earlier quoted context omitted.

There is the possibility that the government builds housing, since the government doesn't have to care about direct profits and can include the overall economic effects of affordable housing in its calculations. We don't expect much direct profits from roads either, but we keep building more and more of them.

That is a good idea that requires careful attention to make sure it has near-perfect execution. Because we do that, and they are called 'the projects'.

Not really? "The projects" are a consequence of a very specific approach to government housing construction.

There's an alternative approach which mirrors the public healthcare concept of "public option". Instead of restricting government housing to means tested individuals or specific low income populations, you develop a public competitor to drive prices down and to eat costs in regions where housing is needed but the economics just don't make sense yet.

i.e. the US Postal Service model. It works extraordinarily well as long as you don't repeatedly capture and handicap the org/agency (like has been done to the USPS). And even with the USPS despite being severely handicapped it still provides immense value by driving prices down while maintaining the essential service of last mile delivery.

A similar approach could be envisioned for a public construction agency.