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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

#721

Post by dan-robertson »

chmod775 wrote: post #681
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.

Free markets for housing are likely to settle into an "optimum" where some percentage of people cannot afford housing at all, because while construction/rental of housing for them would net a return, it's not worth the opportunity cost. Plus you should not wait for the market to respond to a lack of housing: people will be homeless in the meantime. Supply/demand is mostly reactive, because building for anticipated fu…

Isn’t the initial response to a lack of housing that people consume less housing than they would like, rather than homelessness, eg families with children sharing rooms more than they might like, adults living with roommates, or just people having to live further away from where they would like to be (or moving out of a city altogether)?

I don’t dispute that there are levels of affordability that are bad enough that they start to lead to various forms of homelessness, but it doesn’t seem to me like a fundamental rule that, if some people can’t afford to live alone in a large amount of housing, they also can’t afford to live with roommates sharing a smaller amount of housing, and that the right level of housing prices should also price some people out of those arrangements (ie it demands a pretty high level of inequality if you assume that the market allows typical people to afford to live alone and that sharing can typically reduce per-person rents by half or more)

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

#722

Post by wat10000 »

callamdelaney wrote: post #641
muyuu wrote: post #77

Earlier quoted context omitted.

it's crazy that people nowadays seriously question basic market pressure being a thing

They are often happily blinded by ideology. Try to tell someone in Britain that wages have been seriously suppressed due to mass immigration and most of them will look at you like you’re stupid.

Immigration is not so obvious. Each immigrant contributes to both supply and demand.

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

#723

Post by somenameforme »

philipallstar wrote: post #684
21asdffdsa12 wrote: post #603

Earlier quoted context omitted.

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…

One of the main housing issues is government interference. People want to do things to get money from other people, including building houses for them to buy.

You're probably being downvoted because you're just assuming everybody knows what you mean. For somebody who doesn't it's going to be a nonsensical statement. The issue is that the government mandated banks enable easier access to loans for housing, as a means of resolving prior housing issues.

But what happens when you suddenly start giving a bunch of people the ability to go arbitrarily far into debt to buy something that they perceive as priceless (because housing, and most any other 'thing' tends to endlessly appreciate in value in an inflationary economic system)? Obviously prices skyrocket. The exact same thing happened with education for the exact same reason.

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

#724

Post by dan-robertson »

wcfrobert wrote: post #169
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.

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 think there are a big range of opinions people have. There are some hardcore housing resisters whose opinions get a lot of sway because of the way processes work (public consultations, activism, etc). Lots of people are a bit sceptical because of pretty legitimate reasons – noise, traffic, disruption, aesthetics.

I think there probably are balances where people could generally be happier with new construction and that opinion could be clear enough to overrule those who would never be happy with it. Things like:

- ways of having locals vote on new development with small enough constituencies that they can be paid off (ie some of the gains that would have gone to developers or other positive externalities can be captured by those who are more effected) with lower taxes or new roads or parks or whatever

- making residents vote instead of having consultations will lead to less bias in favour of the most obnoxious

- allowing apartment blocks to vote to accept offers of redevelopment (eg you get a newer apartment; more apartments are added to the block and sold to fund the redevelopment)

- having architectural standards that locals are happy with for new buildings

- allow streets to vote to upzone themselves (I don’t love this as it’s basically prisoners dilemma – if your street does it, land value increases and you gain; if every street does it land value only increases a bit but now you are upzoned)

I basically think that there are developments that can be broadly appealing and we are in a bad local minimum in lots of places of having bigger governments trying to push development on unwilling smaller governments/groups

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

#725

Post by rayiner »

donkeybeer wrote: post #562
rayiner wrote: post #451

Earlier quoted context omitted.

That only makes sense if there is a positive externality from housing. Is there?

Why shouldn't housing, like any other goods, be as cheap as possible for as high quality as possible?

Do you think that’s what government produced goods gets you? If so, shouldn’t the government make everything?

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

#726

Post by some_random »

rconti wrote: post #422
paxys wrote: post #377

Earlier quoted context omitted.

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.

It's not worth $3M because of the lot it sits on.

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

#727

Post by rayiner »

ImPostingOnHN wrote: post #463
rayiner wrote: post #451

Earlier quoted context omitted.

That only makes sense if there is a positive externality from housing. Is there?

Of course, many. To be sure, are you asking if society does better when its people are homed vs. homeless? Because that seems like a question with an obviously-yes answer.

The concept of externality has a specific definition and you’re not addressing housing in those terms.

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

#728

Post by loudmax »

philipallstar wrote: post #682
left-struck wrote: post #669

Earlier quoted context omitted.

It’s a difficult problem not because we don’t know the simple solutions (supply and demand). It’s difficult because the people who have the majority vote also typically own the houses and they obviously don’t want the prices to go down. This is not just speaking about the US, many countries are facing this issue

Lots of people have kids and want them to be able to a) not be a victim of crime, and b) be able to afford a house. Anyone who has loads of money to afford high house prices and private security can afford luxury beliefs, as espoused in Oscar acceptance speeches, but everyone else with housing and kids is either voting for less crime and better affordability, or is not yet voting for those things.

Plenty of people with kids are voting to block new housing. It's not that they don't want their kids to be able to afford to pay rent. They're just not making the basic connection between supply and demand.

This just happened in my neighborhood. There was a proposal to build low rise apartment buildings about a mile from the detached single home neighborhood where I live, and people had lawn signs opposing the construction. Perhaps unsurprisingly, the loudest and most active anti-development voices were from Trump supporters. Economic illiteracy used to be the domain of the political Left, but the Republicans are making real inroads in rejecting free market principles, so there's some amount of political realignment. Luxury beliefs indeed.

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

#729

Post by torginus »

left-struck wrote: post #669
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 a difficult problem not because we don’t know the simple solutions (supply and demand). It’s difficult because the people who have the majority vote also typically own the houses and they obviously don’t want the prices to go down. This is not just speaking about the US, many countries are facing this issue

But people who only own 1 house at most are still disadvantaged by this - sure, the value of their apt goes up, but if they want to switch to a larger house, the difference they're paying also increases, so do the property and wealth taxes, if applicable.

There are many stories of solidly low-to-middle class families who lived in an area where property prices soared, and had to choose between bankruptcy or moving out, because they could no longer.

The only people who benefit from this are the investors and landlords. So allowing housing prices to surge is literally taxing the poor for the benefit of the rich.

Buildings also deteroriate - ask a civil engineer. Building something that lasts 50-100 years is much cheaper than something that can be maintained economically indefinitely. If you own a house with copper or PVC plumbing, that they go bad after 40-50 years, and fixing burst pipes quickly gets expensive.

Why do countries allow housing prices to rise then? Simple, it allows banks to have a massive portfolio of loans, where they get a steady source of income for literally decades, while also getting a massive portfolio of real estate they can use as basis for leverage to grant loans (which they profit off of).

Governments can then tax the banks and get some of that money without the dreaded specter of increasing income taxes.

The only problem is that the everyman gets stuck with a 10,25, and now 50 year old loan (with a similar increase in price) for the very same median house.

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

#730

Post by TimPC »

zozbot234 wrote: post #612
watwut wrote: post #609

Earlier quoted context omitted.

> There's plenty of places to live in Texas for basically nothing. What are the employment options there? If I move to a cheap house somewhere where there are no jobs for me, I just moved somewhere where I cant afford.

You can always work full remote. Or maybe you're an elderly retiree.

Elderly retirees seldom move. They’ve long paid off their mortgage and we keep property taxes extremely low so they are pretty much immune to the cost of housing. Once you put down roots in a community it’s hard to leave.
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