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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

#741

Post by exabrial »

lenwood wrote: post #736
torginus wrote: post #729

Earlier quoted context omitted.

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…

> So allowing housing prices to surge is literally taxing the poor for the benefit of the rich. How do we limit home prices increasing? I see your point but solving this isn't trivial.

Build more housing

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

#742

Post by donkeybeer »

pembrook wrote: post #700
estearum wrote: post #674

Earlier quoted context omitted.

Pretty sure France and Singapore both have quite successful and high quality public housing projects.

France has similar issues as the US housing projects from the 70s (creating ghettos), these are not places that people choose to live. And yes, all governments put up halo projects that you see in the press that do not represent the average, please link me to them claiming I'm wrong, and I will say yes, this halo project designed by a famous architecture firm does look nice! Now show me the median late-1970s construc…

The floor space and the proximity to neighbors are perfectly valid reasons to not prefer apartments. Calling them a "blight" is bs, unless you had in mind as your ideal something like historic parts of London because rows of identical mansions in a suburb looks to me no different than rows of vertically stacked apartment blocks. They are both clean, geometric and "industrial" looks.

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

#743

Post by datsci_est_2015 »

triceratops wrote: post #711
7speter wrote: post #407

Earlier quoted context omitted.

[flagged]

Your comment violates site guidelines. "Assume good faith" https://news.ycombinator.com/newsguidelines.html What did you hope to do by saying this?

There’s nothing good faith to be interpreted from a pithy comment that denies real suffering experienced by real people. If OP wanted to be interpreted in good faith they should’ve written more substance to their comment.

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

#744

Post by giaour »

pj_mukh wrote: post #701
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

"typically own the houses and they obviously don’t want the prices to go down." I've never understood this: If I replace a single home with 20 apartment homes, I've raised the value of the whole property at purchase time no? You're already dealing with home valuations that have faaar outstripped wages, the only way you go any higher is to build more homes on the same property. Counterintuitively, the "I don't want to…

> I've never understood this: If I replace a single home with 20 apartment homes, I've raised the value of the whole property at purchase time no?

It's a commons problem. In your scenario, you have absolutely increased the value of your property. 20 apartments is more valuable than a single family home. However, you have also reduced aggregate demand by housing 20 people. That reduced the value of your neighbors' properties (or at least reduced the rate at which their value increased).

NIMBYism posits that values will continue to increase without forcing any property owners to invest in improvements so long as they collectively block any efforts to increase supply.

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

#745

Post by estearum »

torginus wrote: post #732
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?

How can real estate have zero margin when housing rises exponentially in price? No other good behaves like this. A midsize sedan didn't increase in price (in real term) over time, while new cars improved. New houses don't really improve that much over time, yet are getting more more and more expensive. Why is that?

> How can real estate have zero margin when housing rises exponentially in price?

Well let's think about it...

It would suggest that costs are going up, correct?

What are the main costs? Land: Goes up alongside housing prices. Labor: Also goes up alongside housing prices.

Unlike cars, there are very few economies of scale in real estate development. In fact, due to the dynamic above, there are actually diseconomies of scale in housing development. The more you develop an area, the more expensive it gets to continue development.

We normally don't scale goods that have diseconomies of scale because, like we see in housing, they become unaffordable and cease to exist. Unfortunately, housing is a necessity, and so we must build it against increasingly disfavorable economics.

Same is true of healthcare and education. Other goods/services that have diseconomies of scale simply don't scale. That is not an option for housing, education, and healthcare.

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

#746

Post by dnautics »

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.

Austin is not even that good at "keeping law and order" (marginally better than say SF). It's really just "build more housing".

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

#747

Post by estearum »

crystaln wrote: post #616
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?

This is how markets balance. When there is under supply prices go up and incentivize production. When there is oversupply production goes down. Prices converge on a small premium to the price of production.

Correct, and the argument being made here is that the convergence point on "small premium to price of production" actually sits at "unattainable for an increasing proportion of Americans."

Similar to how the convergence point on price for a platinum-bodied iPhone converges at "unattainable for enough people to support its production" and it therefore doesn't exist.

The difference being, obviously, that society can hum along just fine without platinum-bodied iPhones and it cannot hum along without housing.

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

#748

Post by risyachka »

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.

And most importantly - limit housing speculation e.g. don't allow private equity to buy those.

Housing should not be a speculative investment or a wealth growth vehicle.

Housing must be a commodity.

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

#749

Post by estearum »

throwaway2037 wrote: post #508
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?

> already-near-zero margin on real estate development I did a little bit of research. I looks like 15-20% is a normal target margin for the United States. Is this really "already-near-zero"? I disagree.

https://www.nahb.org/news-and-economics/press-releases/2025/...

8.7% net profit during a period of explosive appreciation across the nation.

Normal net profit is about 7%.

S&P 500 has been returning more than twice that annually over the past 10 years.

That is how real estate financing decisions get made.

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

#750

Post by callamdelaney »

wat10000 wrote: post #722
callamdelaney wrote: post #641

Earlier quoted context omitted.

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.

Yes, supply of workers and demand for houses. So not only is mass immigration cutting wages, it's increasing the cost of living. British people are being squeezed between stationary salaries, rampant inflation, insane taxes and huge cost of living increases.
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