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Austin’s surge of new housing construction drove down rents

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

#391

Post by frontfor »

KPGv2 wrote: post #274
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?

> 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 Because the down payment you put into your purchased home could've been put into the stock market and grown faster than property values (this is historically true). Because you don't want the headache of home maintenance. Because in the 21st century, job stability doesn't exist…

Agreed. It’s a classic fallacy to compare rent vs mortgage on a numbers to numbers basis. It’s classic example of not accounting for the total cost of ownership.

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

#392

Post by neom »

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..…

https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

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

#393

Post by seanmcdirmid »

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…

They can throw up 8-10 story apartments in Tokyo despite land being very expensive because they tear them down and rebuild them after 20-30 years. Also, Tokyo outside of a few areas isn't that tall, it is definitely dense, but 3-4 story tall building dense (those homes are also torn down and built anew ever 20-30 years, so construction buzzes in Tokyo).

It would be better if you considered new actual living capacity in Tokyo rather than just new constructions.

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

#394

Post by bluegatty »

wyager wrote: post #384
bluegatty wrote: post #378

Earlier quoted context omitted.

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"

I think it's a matter of perspective maybe more than 'knowing what they are talking about'.

Like - seeing property as 'investment and ownership' vs 'places where people live' is sometimes pretty big gap. Especially when we've been grounded in 'mortgages and wealth creation' for regular middle class people.

Rent control and the underlying civilization power dynamics are kind of a subtle thing, I think most folks are going to just answer in terms of 'what is good for them'.

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

#395

Post by atoav »

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.

Well, build more housing and ensure the more housing is being bought by people who live in it or (if you don't find enough of those) by people who will rent it to them. Many problems occur when capital buys living space as an investment that needs to go up in value, since now there is an incentive to keep some scarcity.

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

#396

Post by vkou »

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.

> Yes rent control is a terrible idea.

When you aren't building more housing, for whatever reason, rent control is the only thing that prevents domestic 'immigrants' into your city from making all the residents homeless.

Since cities can't stop migration into them, it's the only tool they have to protect their existing residents.

---

PS. If you believe in trial-by-combat for housing, why not a similar approach to border control? It's the same concept, open it all up and let the market decide whether your existence is worth it.

There are billions of honest, hard-working, capable people who will happily pay more than you for where you live, do your work for less pay than you're willing to accept, and would love to live... Wherever you currently feel entitled to live.

What gives you any right to deny the market from improving the welfare of your landlord and employer?

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

#397

Post by fogzen »

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.

It's possible to build more housing and have rent control. Rent control is the only thing allowing working class families to live a dignified life in the USA's most desirable cities. Land value tax and social housing are simply not politically feasible – rent control is.

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

#398

Post by wolfi1 »

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.

Vienna built housing itself, with this housing it was possible to have cheap rents and keep rents from private investors down. https://en.wikipedia.org/wiki/Housing_in_Vienna

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

#399

Post by nsnzjznzbx »

vasco wrote: post #359
nsnzjznzbx wrote: post #338

Earlier quoted context omitted.

But building cost > sale value is possible. Or land ends up better value left as suburban house than developing up. Or they build where sale cost - build cost is maximized. I.e. different city. Governments need to build more housing. Make it bland so snobs can price discrimnate themselves to buy builders' homes. Why thrifts by the government home for value for money (and quality).

You think the government knows better how to identify land that is profitable than private builders? Why? Or is this one of those opinions based on "is OK for the state to pay for it because there's infinite money for my pet project"?

Because I grew up in the UK and there is a fuckton of government housing from 60s and 70s. It is ugly but it is housing people.

Government doesn't need to make a profit due to taxation.

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

#400

Post by lmm »

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?

> already-near-zero margin on real estate development

Why is the margin so low when the prices are so high? Is it because the value of housing is already priced into the value of land?

> The problem is: why would you build more housing as prices fall?

Why would you want to? When you stop being able to sell more houses, that's the sign that you've built enough.

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