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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

#431

Post by bluegatty »

hahahacorn wrote: post #386
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…

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…

Rent control is not 'warping markets' - it's the notion that 'homes are markets' that is 'warped' - that's the basis of the problem.

The workaround is to build more dwellings, and rc generally is not an inhibitor there.

Funny enough 'wealth taxes' may actually be the worst of tax of all - aka a double negative - like a double negative.

What we want to do is make it so that 'rich people get rich' not from rent-seeking but from real value creation.

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

#432

Post by chii »

greyface- wrote: post #404
triceratops wrote: post #336

Earlier quoted context omitted.

> Investors add to demand for housing And here I thought people who want to live in houses add to demand for housing. Investors buy houses that people want to live in. If people don't want to live someplace, you won't see any investors there either.

1 house is built. Alice wants to own it to live in it. Bob wants to own it to rent it to Alice. 2 people want to own the house.

> 2 people want to own the house.

and so how do you decide who gets it?

1) morally. Alice deserves it because her intention is more pure.

2) financially. Bob gets it, because he can pay more for it than alice.

Which choice above you make as a policy direction is a reflection of your world view. I'm voting for 2), but i can understand the POV of 1), even tho i disagree with it.

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

#433

Post by chii »

TimorousBestie wrote: post #290
triceratops wrote: post #251

Earlier quoted context omitted.

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.

> renting to be more expensive than a comparable mortgage.

that doesn't sound plausible. May be for a select few properties that are in some unique circumstance (e.g., the seller of the property would sell underpriced because they needed quick sale).

And often, in arguments like these, the rent is the rent, but the mortgage is purely the interest on the loan, and doesn't count the maintenance cost, and doesn't count the deposit required (which has a cost, ala the cost of capital). If you added up all these costs, it exceeds rent.

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

#434

Post by raybb »

wongarsu wrote: post #381
vasco wrote: post #371

Earlier quoted context omitted.

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. A…

Likely the same for public schools and maybe universities. Having educated folks in your city increases productivity and revenues and incomes.

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

#435

Post by FarmerPotato »

jmyeet wrote: post #382
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…

You seem to know Houston; alas yes Austin was formerly surrounded by open spaces.

But let's not miss the point of the article. This is a right-ward shift of the supply curve. It means that the economics of building the next unit got cheaper. That's the point.

I've seen a lot of neighborhoods across the USA, and Austin making way for higher-density housing on urban corridors (Lamar) is like, duh, this is more live-able. There are new towers along rail and bus route, townhomes packed in, and behind the tree line it's now possible for some single-family lots to become duplexes or fourplexes. And rather than McMansion ugly, the new Austin residents are dressing those up to look pretty darn cool.

There is a lot more to be done to remove supply-side barriers in every city.

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

#436

Post by throwaway27448 »

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?

Why let private developers build at all? The market provides perverse incentive to not house everyone.

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

#437

Post by throwaway27448 »

pinkmuffinere wrote: post #376
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?

I'm confused by this objection, if you draw a stereotypical supply and demand curve, you can see how prices settle to an equilibrium point. Of course reality has more complications, but I think your objection is 95% answered by a supply and demand curve. You keep building houses when it is profitable. You stop when it is not. This naturally keeps everything in balance.

Sure, so long as the balance involves not housing people which is pretty sick and twisted

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

#438

Post by thaumasiotes »

tadfisher wrote: post #329
thaumasiotes wrote: post #108

Earlier quoted context omitted.

> They have those AWFUL ticket machines, set too far back (to avoid getting hit) and too high to access from a normal car. Are you sure it's the ticket machines? Around here, the ticket machines have stayed the same, but it's now impossible to use them without stopping the car and getting out, because car manufacturers have decided I need eight inches of empty space between myself and the side of the car.

That eight inches is called "side impact protection" and, while it sucks to not be able to comfortably rest your arm on the window sill, it is pretty important to have in the event of an impact to the side.

I liked it when my car could fit inside a parking space, personally.

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

#439

Post by vasco »

wongarsu wrote: post #381
vasco wrote: post #371

Earlier quoted context omitted.

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. A…

Yes and that reason is not because they are better at doing it profitably it's because they are commons that are wildly unprofitable to do well. If you let private industry build roads you'd have nice roads in cities and dirt in the rest of the country.

In this case what people want is the reverse. They want the government to build in Austin.

The government should be involved when market forces won't solve an issue, ie no market will make it profitable to send an ambulance to a town 3h away in the mountains. You don't need affordable housing in the center of Austin just because it's trendy though.

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

#440

Post by chii »

rconti wrote: post #419
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…

I've never seen the evidence where density increases drive down existing land/home values.

in fact, density increases the value, because the original plot can now be resold at a higher price for a hi-rise.
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