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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

#821

Post by ambicapter »

zozbot234 wrote: post #605
aurareturn wrote: post #599

Earlier quoted context omitted.

That can only happen if the higher density coincides with equal economic growth in the neighborhood. Otherwise, the higher density could result in a negative home valuation trend. Given the above uncertainty, and higher density could result in more traffic, noise, crime, nymbys are likely taking the correction position for wealth preservation and quality of life.

"Traffic" doesn't come from higher density, it comes from zoning bans on mixed-use neighborhoods which force people to drive everywhere. The "crime" argument is especially silly: why assume that higher density only ever attracts criminals? Usually, having more people around is a positive.

You can assume higher density has "more crime" because the increase in people means if you want to keep the same absolute rate of crimes (which is the only thing people ever notice--every violent or sexual crime will be repeated in the news), you have to correspondingly increase the efficiency of crime-fighting, and American police aren't up to the task, even if they were motivated to do so.

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

#822

Post by wilkommen »

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.

I think that building more housing helps, but a lack of supply is not the only cause of high housing prices. Wealth inequality is also a huge driver, possibly the primary driver. If wealth is allocated in a society in a sufficiently lopsided way, then a small number of people can buy up literally all the assets in the society. Regular people are bidding against a small cadre of ultra-wealthy people who can't possibly spend all their money on consuption, so they use it to buy assets like other people's homes. In the aggregate, increasing the housing supply won't bring down housing prices if wealth inequality is also growing above a certain rate.

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

#823

Post by giaour »

alistairSH wrote: post #781
giaour wrote: post #744

Earlier quoted context omitted.

> 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' pro…

Are there any real examples of this actually happening? Local to me, Arlington and Reston VA have both seen massive building sprees over the past 20ish years (mostly adjacent to the Metro). Home values have never been higher in either location. My own personal example... I live ~1 mile from the Metro, so just outside the building boom zone. There was next to zero housing in that zone - it was all office parks - and n…

Yeah, I live in Falls Church, which has seen more build-up than other areas in Northern Virginia because the city has never had the kind of restrictive zoning that the anti-"Missing Middle" campaign is still fighting in Arlington. The value of my single-family home peaked in 2024 and has dropped slightly since. To my understanding, this is generally true of my zip code and not true of comparable zip codes in the area.

But Falls Church is much nicer now that a few mid-rise apartment buildings with ground-level retail have gone in! As a resident, I am very happy about all the new development. I expect that over time, that will have a positive effect on property values, but there is an observable short- and medium-term effect working in the opposite direction as the increased housing supply eases demand on the existing housing stock.

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

#824

Post by a2dam »

wilkommen wrote: post #822
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.

I think that building more housing helps, but a lack of supply is not the only cause of high housing prices. Wealth inequality is also a huge driver, possibly the primary driver. If wealth is allocated in a society in a sufficiently lopsided way, then a small number of people can buy up literally all the assets in the society. Regular people are bidding against a small cadre of ultra-wealthy people who can't possibly…

This can also be fixed by increasing supply. People buy housing as an investment because they expect it to increase in value. The best way to counteract that is to build and continue building so that doesn't happen.

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

#825

Post by underlipton »

Sankozi wrote: post #558
bluegatty wrote: post #431

Earlier quoted context omitted.

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…

RC of course is inhibitor. It lowers value of the house, which lowers builder's profit, which lowers number of new investments.

Unless builders aren't building for profit.

Create an entity with a mandate to build and the funds to make it solvent. Basic and dignified shelter that enables all the other economic activity does not need to be a profit center.

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

#826

Post by dan-robertson »

harrall wrote: post #775
dan-robertson wrote: post #716

Earlier quoted context omitted.

The government intervention in the markets for agricultural products is because farmers are often an important political base, not to keep prices low for consumers. Without the intervention, prices would fall and supply would have to fall too, which would be good for consumers and bad for producers.

And the biggest reason is, learning from history, the instability of food prices destabilizes nations. There have been many “bread riots.”

Bread is much cheaper today (at least relative to incomes) than in the days of bread riots.

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

#827

Post by giaour »

sidewndr46 wrote: post #778
giaour wrote: post #744

Earlier quoted context omitted.

> 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' pro…

It's not a common problems in Austin at least. You (a property developer) buy a single home in bad shape on a big lot in the city. Then you redevelop the single home into 20 apartments, greasing the wheel appropriately (of the local government) to get the needed rezoning and permits. No one else can do this because they don't have the connections and monetary resources you do. You pocket the increase in value of that…

The article we are commenting on is literally about this happening in Austin.

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

#828

Post by BeetleB »

bluGill wrote: post #159
nomilk wrote: post #118

Dumb question, many cities suffer from extremely high property (i.e. land) prices. I understand the NIMBY barrier. But I don't understand why it isn't more common to simply.. start a new city. Especially in countries like Australia where property prices are sky high and alternative places for setting up a new city are abundant. Maybe internet connectivity was previously a barrier, but now.. starlink. I put this quest…

You can't start a new city. I city exists for all the things you can do. Your new city will have nothing to do because nobody lives there and there are no jobs to attract anyone to move. that is why we build suburbs - they get anound this by being right next to a place with everything you want in a city

Lots of examples in various countries in the 20th century prove you wrong.

Brasilia, Canberra, Islamabad, Reston, etc.

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

#829

Post by nroets »

testing22321 wrote: post #810
brazzy wrote: post #789

Earlier quoted context omitted.

Except they cannot increase rents when there is enough supply for a market to actually work.

The market will remain irrational longer than… Of course they can when they own them all. See De Beers diamonds. Buy them all, keep the price artificially high.

The De Beers cartel was able to avoid anti trust scrutiny because the best reserves are outside (Africa/Canada/Russia) of the most lucrative markets (US/Europe/Asia).

Corporations control only a small faction of housing supply.

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

#830

Post by deanishe »

bombcar wrote: post #795
testing22321 wrote: post #773

Earlier quoted context omitted.

Housing can not be both affordable and a good investment. If we want housing to be affordable ie “limit them increasing” we have to stop people using them as investments. There are many ways. My favourites are: - one human can own one residential property. No companies or businesses can. -or, property tax doubles (or 10x) with every residential property owned. - no foreign ownership (Canada does this now) - governmen…

It can be both affordable and an investment - it cannot (and will not) perpetually be a market-beating top-tier investment . All of the items above can have drastic unintended consequences; the way to keep prices affordable is to make sure that supply is always outstripping demand by a bit. Some examples of unintended consequences: * I can't add an ADU to my existing property which would add one more dwelling unit *…

> it could substantially discourage non-citizen immigrants (legal or not)

Make an exception for owner-occupiers?

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