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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

#421

Post by 01100011 »

lifeisstillgood wrote: post #7

>>> The city changed zoning regulations to allow construction of large apartment buildings, particularly near jobs and transit. In 2018, voters approved a $250 million bond measure to build and repair affordable housing. Permitting processes were reformed to speed development and reduce costs. All three of the five things most economists say about house building - and each one will hit house owning voters hard making…

As a homeowner I have zero objections to apartments built near jobs and transit (which also means away from my house). I also don't think apartments directly compete with single family housing. Like, they do, but only in certain situations and at certain levels of occupancy and the economy.

I am strongly opposed to building homes in stupid places, worsening traffic or overburdening infrastructure. This is why I tend to strongly oppose ADUs. If you want to turn my neighborhood into a dense urban environment, fine, but buy my house and my neighbors' houses, bulldoze them, and build proper urban density.

I also have a lot of skepticism regarding our housing shortage. You can go find people making the same arguments about housing shortfalls in 2006(underbuilt for years, new family formation, prices will remain high...). But then something happened, and it wasn't that 10% of Americans suddenly died. Suddenly we had more homes than we needed. Why? Because housing demand is related to economics. Now that we're slowing down reproduction and kicking out or scaring off immigrants we're likely setting ourselves up for another round of oversupply. "Good!" Well, tell that to the soon to be unemployed home builders.

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

#422

Post by rconti »

paxys wrote: post #377
adrianN wrote: post #341

Earlier quoted context omitted.

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 lose…

You think if there were modern highrises in Menlo Park a tiny 2BR shack next door would still sell for $2M? It’s a supply and demand issue, nothing more.

A tiny 2BDR shack next door that is worth $3M because of the 6000sqft lot it sits on _absolutely_ goes up in value when density increases.

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

#423

Post by FarmerPotato »

JuniperMesos wrote: post #366
mmooss wrote: post #285

Earlier quoted context omitted.

> 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.

Many artists and self-employed creatives are themselves poor working people - making art is work (and so is marketing it to potential customers), and most artists are not lucky or successful enough to become wealthy doing it. But yes, I think there is a sense in which people who are driven to create have some kind of ineffable, cultural capital that people without this drive do not have. So a neighborhood that is ful…

See the photo in the above East Side article. In the old neighborhood, people talked to the photographer because the front yards didn't have privacy fences.

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

#424

Post by eru »

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?

Huh? In Silicon Valley the objection is usually: even if we build more housing, prices won't fall.

So which way is it now?

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

#425

Post by rconti »

manquer wrote: post #191
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.

To be fair it is not the city/elected officials who wants to retain the parking lots. The downtown redevelopment would probably make the city a lot of money. It is the businesses around downtown who are pushing the save downtown campaign. I imagine the businesses contribute a fair chunk of revenue to the city now and have some influence . Relative to say parts of Redwood City, or Palo Alto. Menlo park has a fair amou…

TBF a lot of the complaints are coming from businesses that are _probably_ renting. There is absolutely the chance that their business will go under due to construction disruptions before they can benefit from the increased foot traffic once the development is complete.

And, of course, once the development is complete, and the value of their land goes up, so too does their rent....

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

#426

Post by pinkmuffinere »

idiotsecant wrote: post #406
pinkmuffinere wrote: post #376

Earlier quoted context omitted.

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.

What do you do when that equilibrium point is hopelessly above what the average person can afford?

there are many things you can do, but essentially you want to make it profitable for builders to make houses at a lower price point, or give the average person more money. Some approaches (not all of which I'm endorsing):

- reduce restrictions around planning / construction / etc (because it takes time and expertise to comply, both of which cost money)

- find a way to bring in cheaper labor, or make it possible for construction companies to hire the same labor at a lower price. Maybe a subsidy, maybe reduced taxes, maybe relaxed labor laws

- add a subsidy for homes

- make your citizens more wealthy, so the price is no longer above their means

- outsource construction to a place that can build it more cheaply (eg, prefab homes)

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

#427

Post by komali2 »

taormina wrote: post #388
komali2 wrote: post #291

Earlier quoted context omitted.

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?

I've lived in Tokyo and Houston. Tokyo is infinitely more livable and the housing is still relatively affordable. In Houston even if you can get a new place it'll be clapboard garbage that's a one and a half hour drive from work.

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

#428

Post by rconti »

CyberDildonics wrote: post #203
rconti wrote: post #52

Earlier quoted context omitted.

Well, in Menlo Park they're just flat surface parking lots, not even multi-story structures. The planned development is multi-story housing with parking underneath. To be fair, I am boycotting the (similar) underground garage over at Springline because they're clearly made only for people in Range Rovers or whatever. They have those AWFUL ticket machines, set too far back (to avoid getting hit) and too high to access…

I don't know if that's a boycott, or just going some place you like better.

I park on the street for free. (The lot is also free in monetary cost, for the short windows I'd park there, but the hassle is larger than the hassle of finding street parking).

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

#429

Post by marcuskane2 »

cuuupid wrote: post #351
bsder wrote: post #284

Earlier quoted context omitted.

> [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,…

For nearly every homebuyer, a home is the largest purchase they will ever make and the bulk of their net worth. It needs to be a good long term investment that at least reasonably paces with inflation, otherwise you are losing money by buying a home and everyone has to rent and then you have feudalism with extra steps. The good news is this is totally fine with keeping cost of living under control and overbuilding, b…

> a home is the largest purchase they will ever make and the bulk of their net worth

That's bad and a central part of the problem.

I accept that my car is depreciating in value every year I own it, and but I need a car so I buy one. I don't need it to be a good long term investment, despite it being a major purchase.

The entire mindset of treating a family's home as being an investment class rival to bonds and equities is a relatively new phenomenon, and one that's clearly been detrimental to many.

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

#430

Post by scarmig »

darth_avocado wrote: post #49
scarmig wrote: post #26

Earlier quoted context omitted.

> In December 2021, Austin’s median rent was $1,546, near its highest level ever and 15% higher than the U.S. median ($1,346). By January 2026, Austin’s median rent had fallen to $1,296, 4% lower than that of the U.S. overall ($1,353). For comparison, in San Francisco December 2021, the median one bedroom was $2810. In San Francisco March 2026, it was $3597, an increase of 28%.

It is well known that there was a brief moment in time when people were abandoning San Francisco and “moving to Texas” (mostly Austin) that coincides when the rents peaked in Austin. I’d be not surprised if that was also the time when San Francisco rents were down. We’re seeing a reversal in trend when SF is hot again and Austin is not. So not exactly a straightforward comparison. It could explain the SF-> Austin and…

So we've got point in time comparisons between Austin and itself; the change in delta between Austin and a particular city known for restricting housing; and the change in delta between Austin and national median rents. They all support the idea that increasing supply tends to decrease costs, which by a massive coincidence is what basic economic theory suggests.

Of course, people can come up with an ad hoc explanation for why Austin's prices happened to decrease against each of those data points. But is there a single principled way to present the data that suggests increasing supply in Austin did not decrease costs?

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