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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

#851

Post by rootusrootus »

polothesecond wrote: post #760
dan-robertson wrote: post #721

Earlier quoted context omitted.

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…

It’s all fun and games games until you’re municipality starts banning adult co-living situations. You underestimate how intrusive these people will be to protect the value of the single largest asset most of them will ever own

> municipality starts banning adult co-living situations

Is that not typically happening only for more egregious situations? E.g. the ban is on more than 3 or 4 unrelated adults living together. There are plausible reasons why that should be regulated, it is not clearly a conspiracy by homeowners to prop up the value of their own homes.

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

#852

Post by graeme »

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…

The thing about arguments like this is they're usually used in service of blocking housing. As in we shouldn't do what Austin did because it won't fully solve the problem. We should instead stick with the status quo, which gets much worse than Austin.

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

#853

Post by lkbm »

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

That's part of it, but I definitely have known quite a few renters who opposed building more housing. Denial of supply and demand, as well as general dislike of "rich developers" is strong in many groups.

Incentives are typically the strongest force to watch, but so are various cultural/political narratives people come up with. People clearly don't all vote in our own economic interests in many situations. I'd assume this is largely because in the current information ecosystem, people don't understand what's in their economic interests.

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

#854

Post by rootusrootus »

EcommerceFlow wrote: post #408

Why do people accept that supply/demand works in so many industries when the private market is allowed to flourish, but won't accept it for healthcare, education, etc?

A lot of our health care needs are notoriously inelastic, which is IMO the biggest reason free market dynamics are not a good choice.

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

#855

Post by malshe »

array_key_first wrote: post #834
terminalshort wrote: post #295

Earlier quoted context omitted.

Just look through the comments on any post about housing or immigration and you will see hordes of them.

I think it's not that people question free market dynamics, it's that they question a market is free in the first place. For example, healthcare in the US is basically exempt from typical free market dynamics like supply and demand because of how the market works. Consumers don't choose, everyone has a moat and parents, and costs are often subsidized.

100%. I see more and more young people appreciating Carlin’s “it’s a big club and you ain’t in it” quote because they have come to terms with the rigged game. I think the GFC was the starkest exemplar of this.

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

#856

Post by Forgeties79 »

lkbm wrote: post #853
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

That's part of it, but I definitely have known quite a few renters who opposed building more housing. Denial of supply and demand, as well as general dislike of "rich developers" is strong in many groups. Incentives are typically the strongest force to watch, but so are various cultural/political narratives people come up with. People clearly don't all vote in our own economic interests in many situations. I'd assume…

Do you recall exactly what kind of housing they were opposing? Because that is a major piece of context we are missing here. I don’t think I’ve ever met anybody who simply said “no more housing.” It’s usually much more specific than that, such as opposition to house flipping and STR’s, or wasteful planned communities of McMansions and concrete.

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

#857

Post by kevstev »

some_random wrote: post #726
rconti wrote: post #422

Earlier quoted context omitted.

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.

What is your mental model for this then? If the "2BR shack" can be built from scratch for 300k, and the value for the lot + shack is $3M, then the land value is $2.7M. Most expensive real estate is land value, not actual structure value.

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

#858

Post by 4fterd4rk »

Forgeties79 wrote: post #856
lkbm wrote: post #853

Earlier quoted context omitted.

That's part of it, but I definitely have known quite a few renters who opposed building more housing. Denial of supply and demand, as well as general dislike of "rich developers" is strong in many groups. Incentives are typically the strongest force to watch, but so are various cultural/political narratives people come up with. People clearly don't all vote in our own economic interests in many situations. I'd assume…

Do you recall exactly what kind of housing they were opposing? Because that is a major piece of context we are missing here. I don’t think I’ve ever met anybody who simply said “no more housing.” It’s usually much more specific than that, such as opposition to house flipping and STR’s, or wasteful planned communities of McMansions and concrete.

Generally these people oppose the building of "luxury housing" because they don't get how ALL housing increases supply/reduces market price. Also the idea of a developer building a kind of... predistressed property has never made any sense to me.

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

#859

Post by lkbm »

Forgeties79 wrote: post #856
lkbm wrote: post #853

Earlier quoted context omitted.

That's part of it, but I definitely have known quite a few renters who opposed building more housing. Denial of supply and demand, as well as general dislike of "rich developers" is strong in many groups. Incentives are typically the strongest force to watch, but so are various cultural/political narratives people come up with. People clearly don't all vote in our own economic interests in many situations. I'd assume…

Do you recall exactly what kind of housing they were opposing? Because that is a major piece of context we are missing here. I don’t think I’ve ever met anybody who simply said “no more housing.” It’s usually much more specific than that, such as opposition to house flipping and STR’s, or wasteful planned communities of McMansions and concrete.

Apartment complexes. Mostly "luxury" apartments, but including ones with some % of affordable units. Some were replacing houses, but mostly replacing parking lots, vacant lots, or even older, smaller apartment buildings -- in a neighborhood that was already almost entirely apartment buildings.

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

#860

Post by 4fterd4rk »

jmyeet wrote: post #382
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.

So pretty much everything you've said here is wrong. Build more housing? In a place like Austin, you can just keep building out, basically. To a point. Eventually cities doing this reach a limit. Houston and Atlanta are pretty much at or beyond that limit. And it's not that building low-density SFH housing is the most economic. It's simply the most subsidized . Every road, every parking space, every sewer pipe, every…

So build more dense housing. It's that easy. Neuter the NIMBYs. Let people build.
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