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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

#651

Post by bpt3 »

epistasis wrote: post #320
bpt3 wrote: post #288

Earlier quoted context omitted.

> Politically, we must stop prioritizing the views of homeowners at the local level. They already got their reward, massive unearned capital gains on their residence, there's no need to give them priority on land use over the general needs of society. They are the majority of people in most areas, so it does make sense that they would be given priority in some ways. The rest of your post is unsubstantiated vitriol, w…

You quoted my vitriol to the homeowners, the rest is not vitriol, it's basic land economics. > They are the majority of people in most areas, so it does make sense that they would be given priority in some ways. In some ways sure. But in the ways that they are? Absolutely not, it's basic unfairness. The entire tax system is tilted in favor of home owners. We don't need to do that, we could make it more equal so that…

It's not "basic land economics", it's your personal opinion about how things should be and whether you think current policies are fair.

The tax code does favor home ownership, because people want to support it. Less people will be able to afford their own home without that support, which seems to be the opposite of what you want.

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

#652

Post by baq »

btilly wrote: post #584
baq wrote: post #572

Earlier quoted context omitted.

But zoning is required to maintain order. Nobody wants anybody to live in favelas. As with everything the regulator needs to strike a balance to make the market work.

Given the choice between being homeless and living in favelas, millions in Brazil have chosen to live in favelas. The reality of zoning laws in Western countries is to provide a target for regulatory capture by the NIMBY crowd. With the result that we're systemically underbuilding housing, then wonder why we wound up with homelessness.

Favelas are a local optimum which systemically is very difficult to get out of and is a sign that the regulator is powerless. It's a great example of a market failure.

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

#653

Post by tsimionescu »

sophrosyne42 wrote: post #549
michaelmrose wrote: post #532

Earlier quoted context omitted.

If a minority has most of the wealth then the equilibrium supply may include a lot of supply of second homes, very large homes on large plots for the rich, properties sold at a premium based on how much they can extract from renters, and even investment properties occupied by nobody whilst still having insufficient small basic homes and dense housing. Capital that could be invested in better serving the bottom half h…

There is more than enough land for everyone, and rich people aren't really competing for the kind of housing that poor people are competing for, e.g. smaller plots with smaller homes. The demand of the rich does not eliminate demand of the poor, so the market produces different kinds of housing for different clientele. Think about it this way: assume you supply all the housing to all the rich people. Then there still…

> rich people aren't really competing for the kind of housing that poor people are competing for, e.g. smaller plots with smaller homes.

This disregards basic geometry. Sure, in some rare situations you only have one small plot of land surrounded by existing construction or natural boundaries. But, in the majority of cases, you have one large plot of land, and you can either construct one big house on it, 5 smaller houses, 10 small houses, or 200 apartments in a block. The rich are absolutely competing for this lot with the poor.

And as inequality goes up, the rich can even start contemplating buying up surrounding properties, tearing down construction, and transforming a small plot into a much larger one.

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

#654

Post by CalRobert »

roysting wrote: post #610
CalRobert wrote: post #568

Earlier quoted context omitted.

While it’s a different country my experience in Ireland and the Netherlands has been that there’s this bizarre contempt for builders. Like “I build homes and sell them to people for money” basically makes you satan incarnate. So housebuilding is bogged down in x% social, y% “affordable” (because apparently the goal of making all housing affordable by actually building enough is unthinkable) and very little gets built…

Both of you are really just beating around the bush of this whole issue in basically the same way as the very people you are complaining about, albeit at a different position. You both have a very elitist mentality towards this issue, i.e., “those peasants should move out of the way for superior people like me”, when what you are both describing is ironically failure of the privileged and powerful to understand what…

Yes, we need to stop Amsterdam from being colonised by people from Groningen, I guess? I don’t understand what you’re getting at.

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

#655

Post by hnaccount_rng »

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..…

Isn't the US example: Medicare/Medicaid? It has far less costs (i.e. more of the money spend ends up with patient care) and has a reasonably good reputation?

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

#656

Post by cucumber3732842 »

FarmerPotato wrote: post #414
KPGv2 wrote: post #267

Earlier quoted context omitted.

That's not what gentrification is. Relevant to this article, I lived through the gentrification of large parts of Austin in the early 00s. What happened was that good housing full of artists and musicians and other self-employed creatives began gentrifying, driving up property values, which drove up property taxes, which became unaffordable to the existing residents (who had owned their homes for a long time). Many (…

Let's talk about the East Side. https://www.austinmonthly.com/in-photos-what-gentrification-... I don't think many home owners got a price for their land that allowed them to buy a similar house elsewhere. The world is far from an ideal model where what you get is what you deserve. Note the history of the East Side power plant, which depressed property prices. Ditto, I-35 construction plans. The article says the plan…

You see this business model everywhere. They buy up all the land around an industrial site, small airport, race track, pig farm that smells bad, etc, etc. Then they and their Karens lobby for rule changes that force that use out or make it non-competitive in the broader market. Then they develop the land.

Nothing will fix it until some case goes up to the supreme court and results in some sort of "they were there first the .gov can piss off" doctrine.

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

#657

Post by bell-cot »

TulliusCicero wrote: post #39
xwowsersx wrote: post #5

You mean to tell me that increasing supply lowers price? Fascinating.

Unfortunately, there's a lot of people -- especially further left -- who fight this kind of reasoning. They insist that the housing market is different , and that just building more private housing won't help. No amount of evidence will convince these people, because they already made up their mind ahead of time: their ideology says the market can't help, so the market can't help, period. Any evidence to the contrary…

"It is difficult to get a man to understand something, when his salary* depends upon his not understanding it!" - Upton Sinclair

*Nothing changes if you replace "salary" with "financial interests". Or "social interests". Or other interest near & dear.

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

#658

Post by bpt3 »

estearum wrote: post #297
bpt3 wrote: post #279

Earlier quoted context omitted.

Can you define razor thin? Grocery stores have very small margins, as little as 1%. Homebuilders make at least an order of magnitude more on a very expensive item.

Grocery stores don't require millions to billions of dollars of capital to execute each new transaction. So it's not the margin itself but actually the spread between the margin and what investors could get by investing in alternatives. Real estate investment opportunities are often measured by their advantage (measured in fractions of a percentage, .2% advantage being considered solid) over 10 Year Treasuries or S&P…

> Grocery stores don't require millions to billions of dollars of capital to execute each new transaction.

Neither do homebuilders, because homes don't cost millions to billions to build (high end custom homes can cost millions, but that's not what we're talking about here).

> So it's not the margin itself but actually the spread between the margin and what investors could get by investing in alternatives. Real estate investment opportunities are often measured by their advantage (measured in fractions of a percentage, .2% advantage being considered solid) over 10 Year Treasuries or S&P 500 returns.

Okay? So they have an advantage over alternatives, which means higher profits. And a .2% advantage is not considered solid, or meaningful in any way without a lot of missing context.

> Real estate developers do often actually lose money, but the more salient boundary condition is whether they can get financing for a project, where they have to clear a bar well above the "just make >$0" bar.

Many companies often lose money, due to incompetence or bad luck. The industry as a whole has very healthy margins.

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

#659

Post by estearum »

21asdffdsa12 wrote: post #603
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?

Why would you produce more bread, milk, eggs as prices fall? You would of course wait for the next-pig cycle - when the starving masses pay any price to you. The answer- essentials can never be a non-government interferring market. This can be by creating artifical oversupply by buying up oversupply for foreign aid or bio fuels(food production). In the case of housing, this is by having the goverment continually cons…

Sure, which is a different intervention than what's being discussed here.
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