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

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

#381

Post by wongarsu » Thu, Mar 19, 2026, 4:16 AM UTC

vasco wrote: post #371

Spivak wrote: post #368

Earlier quoted context omitted.

Because government has a unique pricing advantage, they get additional value from the houses they build in the form of all the positive externalities and property tax revenue. So projects that wouldn't be profitable for private builders might still be worth it to the government. So it should be both. They're just gonna pay builders a sum anyway so it's not like they need to shoulder the full upfront cost anyway.

Do you have example of another area the government has higher profit margins than private industry? I can't. And if I was going to think a government would build housing, it would be in places that are cheap and I could mass house a bunch of people, not in hip expensive cities which is what people want when they talk about this. But surely soviet style huge blocks of tiny t0 apartments all stuck together is a dream..…

> Do you have example of another area the government has higher profit margins than private industry?

Public transit. Capturing enough money from fares is difficult, maybe impossible, but it's quite profitable if you can capture the value generated by the enabled economic activity and raised property values.

The same really goes for most infrastructure. There's a reason the government operates nearly all the roads. Also the fire departments and police stations

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

#382

Post by jmyeet » Thu, Mar 19, 2026, 4:16 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.

So pretty much everything you've said here is wrong.

Build more housing? In a place like Austin, you can just keep building out, basically. To a point. Eventually cities doing this reach a limit. Houston and Atlanta are pretty much at or beyond that limit.

And it's not that building low-density SFH housing is the most economic. It's simply the most subsidized. Every road, every parking space, every sewer pipe, every water pipe, every utility pole, every school, every hospital, every police station, every fire station... they all add factor in to the true cost of housing and the more spread out things are, the more expensive those things become. Taken to extremes, look at the billions Houston spends now to add just one more lane (because this one will totally solve traffic) on, say, the Katy Freeway or the ring roads.

Yes it does need to be affordable. NYC is the posterchild for this. Nothing that's getting built on billionaire's row will ever trickle down to being affordable housing. They build ultra-luxury housing because it's the most profitable and it does absolutely nothing for anyone else because these units are just ways for non-residents (mostly) to park wealth and not pay their fair share of taxes.

Rent control is the wrong solution for the right problem and it's typically American. By that I mean it forces the solution onto private landlords who are going to do everything possible to get out of those obligations and deliver subpar but compliant housing. And they'll demand tax breaks for it. When in fact the solution is for the government to supply a large chunk of the housing market ie social housing. But there's a pervasive and wrong idea that we can only solve problems in the private sector and that's nothing more than a wealth transfer from the government to the already-wealthy.

"Just build more housing". Yeah, and then you get Houston. Cities need to be planned. Cities require infrastructure. And one of the most important thing cities need is public transit infrastructure, something sadly lacking in virtually every American city.

The core to so many of these problems is that we need to stop treating housing as a speculative asset. Owning two or more houses should be incredibly difficult and expensive and should be taxed punitively. By this I mean the capital gains on non-primary residences should be 80% and property taxes should be significantly higher.

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

#383

Post by xiaolu627 » Thu, Mar 19, 2026, 4:17 AM UTC

Interesting to see how building more housing in Austin actually lowered rents. The debate about rent control versus new construction is always thought-provoking.

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

#384

Post by wyager » Thu, Mar 19, 2026, 4:18 AM UTC

bluegatty wrote: post #378

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.

Rent control is one of the best ideas, and it may be a civilizational, foundational idea. Property ownership is at the very core of entrenched power, and the foundation of rent-seeking and wealth asymmetry. If you look at even the Monarchs of long past - it wasn't their 'titles' that made them powerful - it was the economic rent that came along with the land ownership. Even in more open market economies, property is…

> Rent control is one of the best ideas

It's funny how this question might have the greatest divergence in answer distribution between people who do and don't know what they're talking about

Other candidates are "is debt good" and "is property tax better or worse than income tax"

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

#385

Post by nmfisher » Thu, Mar 19, 2026, 4:18 AM UTC

servo_sausage wrote: post #82

Gigachad wrote: post #8

Same has been happening in Melbourne, Australia. The state government has basically steamrolled the boomers and allowed highrise construction next to existing train stations. Despite having huge population growth, rents are some of the most affordable in the country.

One of the things I like about the reporting in this Austin article, is they break down by building class. In Melbourne I've never found a good source for this, only general averages; and my suspicions are that we just build shitboxes and claim the rent is lower on average, capturing something like shrinkflation rather than affordability.

I was apartment hunting in Melbourne in 2015 and I was appalled at the quality of most inner-city apartments. Tiny shoeboxes, no sunlight, paper thin walls.

At the time I didn't think they should have been allowed to be built. But looking back, they probably did keep a lid on rents. A bad roof over your head is better than no roof.

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

#386

Post by hahahacorn » Thu, Mar 19, 2026, 4:19 AM UTC

bluegatty wrote: post #378

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.

Rent control is one of the best ideas, and it may be a civilizational, foundational idea. Property ownership is at the very core of entrenched power, and the foundation of rent-seeking and wealth asymmetry. If you look at even the Monarchs of long past - it wasn't their 'titles' that made them powerful - it was the economic rent that came along with the land ownership. Even in more open market economies, property is…

It would be far more efficient to simply tax away all rent collected from land instead of grossly warping markets and creating terrible incentives for all involved.

The reason is that you can’t produce more land. Fixed supply will also warp economic markets and create terrible incentives (land speculation).

If you want the best solution, you implement a land value tax. If you want the 2nd best solution, tax property (Land + Building value). If you want the worst solution, implement rent control.

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

#387

Post by 7speter » Thu, Mar 19, 2026, 4:20 AM UTC

OneDeuxTriSeiGo wrote: post #350

sgc wrote: post #337

Earlier quoted context omitted.

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…

Any program created by the US government can be captured and handicapped, like has been done to the USPS.

Also, the Postmaster General was on Capitol Hill today saying how this time next year the service won’t be able to afford delivering to all addresses in the US.

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

#388

Post by taormina » Thu, Mar 19, 2026, 4:20 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…

Have you seen Tokyo?

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

#389

Post by seanmcdirmid » Thu, Mar 19, 2026, 4:21 AM UTC

shimman wrote: post #113

matheweis wrote: post #59

Earlier quoted context omitted.

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.

Seems like a free market issue, any profit resulting from development is a free market issue. Your profit margins mean worse quality housing for people, and we can see what actual public housing programs look like with Singapore and Vienna where rents can typically cost less than 20% of median salaries: https://www.youtube.com/watch?v=LVuCZMLeWko As renown corporate welfare recipient Bezos would say: "your margin is…

> actual public housing programs look like with Singapore and Vienna where rents can typically cost less than 20% of median salaries

It could work, but both Singapore and Austria have less than 10 million people amd have a residency system where you just can't come in from the outside and get your subsidized housing in Vienna or Singapore. Singapore doesn't extend subsidized housing to its foreign residents, even permanent residents, and they make up 40% of the population!

Vienna is a bit better, as it applies it to all EU citizens who are resident in Austria, but you have to have lived at the same address there for 2 years, you just can't come in and claim one.

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

#390

Post by jmyeet » Thu, Mar 19, 2026, 4:22 AM UTC

bluegatty wrote: post #378

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.

Rent control is one of the best ideas, and it may be a civilizational, foundational idea. Property ownership is at the very core of entrenched power, and the foundation of rent-seeking and wealth asymmetry. If you look at even the Monarchs of long past - it wasn't their 'titles' that made them powerful - it was the economic rent that came along with the land ownership. Even in more open market economies, property is…

Rent control is the wrong solution to the right problem (ie affordable housing).

It creates all sorts of problems that wouldn't exist otherwise. For example, if you've been in a rent control house or apartment for 10+ years and are paying significantly less, what happens if you want to move? Or just need a bigger place? It's a huge impeediment to mobility and flexibility.

Also, you have an adversarial relationship with your landlord. They want you to leave so they can raise the rent. They'll skimp on maintenance, turn off the heat (even when it's illegal) and generally make your life miserable until you leave.

The solution to these problems is social housing, meaning the government becomes a significant supplier of affordable, quality housing. The very wealthy and the real estate industry don't want this however because it will decrease profits.

> Property ownership is at the very core of entrenched power,

In the literature, there is a distinction made between private property and personal property. I'm fine with people owning their own home if they want. That's personal property. Private property is when we allow people and corporations to hoard housing. I'm all for making it financiall punitive to own more than one house.