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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

#911

Post by nsvd2 »

bluegatty wrote: post #431
hahahacorn wrote: post #386

Earlier quoted context omitted.

It would be far more efficient to simply tax away all rent collected from land instead of grossly warping markets and creating terrible incentives for all involved. The reason is that you can’t produce more land. Fixed supply will also warp economic markets and create terrible incentives (land speculation). If you want the best solution, you implement a land value tax. If you want the 2nd best solution, tax property…

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…

If homes can be bought and sold, then there is a market. Is your are taking about a society without money, that is a different discussion entirely.

Anyways, there are many studies showing that rent control is bad in the long term for housing affordability.

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

#912

Post by pocksuppet »

hunterpayne wrote: post #535
pocksuppet wrote: post #277

Earlier quoted context omitted.

It's more correct to say supply and demand still drive the overall average, but in a high-friction market of unique items, every single case is still a unique case. It's not like moving wheat bushels or RAM chips. When they sell oil, they mix up all the oil from different producers in the same reservoir, in the same tanks. Electricity travels in the same wires. Housing is nothing like that.

"they mix up all the oil from different producers in the same reservoir" Only when avoiding sanctions, not normally. And housing does follow economic principles no matter how much you wish that wasn't so.

Housing doesn't follow economic principles that only apply to homogeneous bulk products, that's the point. Electricity is almost perfectly homogeneous. Then you have things like wheat and bread, which vary in quality but are close substitutes. Housing's at the complete opposite end of the spectrum. No two units are alike and they only trade every few years at best.

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

#913

Post by verall »

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…

Houston has a very high density of delicious food. The traffic is horrible but if there was a big investment into public transit, I think it would be a very nice place to live.

- an austinite.

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

#914

Post by scoofy »

miyoji wrote: post #869
scoofy wrote: post #623

Earlier quoted context omitted.

>If I move to a cheap house somewhere Again, I'm not trying to be difficult here, but "where" is "somewhere." There are jobs in Austin, San Antonio, Kerrville, Marfa, and El Paso. They might not all be for me, but they exist in all these places. Where you live and what your commute is, again, is not exactly something that's particularly trivial to define. At what point should I start looking in San Antonio rather tha…

> At the end of the day, housing in Austin is relatively inexpensive. There are real options below $300K. This is so insanely out of touch. Most people will never be able to afford a house over $200k, even in Austin. I live here, you apparently live in California. As a resident, let me tell you that Austin is not affordable, and definitely not "inexpensive". Housing here is relatively inexpensive compared to the most…

I literally grew up in Austin. I understand the Austin housing market. I understand is not cheap. That doesn’t mean it’s not affordable.

According to your article:

> Based on those costs, MIT estimates the living wage for a family of four in the Austin metro area is $112,866 a year, or $49,322 for an individual.

That’s well below median household income.

> The organization created a “Household Survival Budget,” which includes housing, child care, food, transportation, health care, technology, taxes and miscellaneous expenses. According to the group’s estimates, the living wage for a family of four in Travis County is $102,096 with two kids in child care and $85,356 with no kids in child care. For a single adult, the survival budget is $39,924.

Again. When we are talking about the housing crisis in the Bay Area, we are talking about small condos costing $1M. Just forget having anything be closer to median income affordable for a family of four. In Austin that’s still possible. It’s not Milwaukee, but it’s a functioning housing market.

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

#915

Post by verall »

rconti wrote: post #419
wcfrobert wrote: post #169

Earlier quoted context omitted.

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've never seen the evidence where density increases drive down existing land/home values.

Austin literally had density increases and house prices are down. The original article is literally the example.

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

#916

Post by darth_avocado »

scarmig wrote: post #430
darth_avocado wrote: post #49

Earlier quoted context omitted.

It is well known that there was a brief moment in time when people were abandoning San Francisco and “moving to Texas” (mostly Austin) that coincides when the rents peaked in Austin. I’d be not surprised if that was also the time when San Francisco rents were down. We’re seeing a reversal in trend when SF is hot again and Austin is not. So not exactly a straightforward comparison. It could explain the SF-> Austin and…

So we've got point in time comparisons between Austin and itself; the change in delta between Austin and a particular city known for restricting housing; and the change in delta between Austin and national median rents. They all support the idea that increasing supply tends to decrease costs, which by a massive coincidence is what basic economic theory suggests. Of course, people can come up with an ad hoc explanatio…

> But is there a single principled way to present the data that suggests increasing supply in Austin did not decrease costs?

Building more housing will make housing affordable. That’s not up for debate. The extent to which is what you need to look at. You can’t ignore the effects of net migration trends. My comment mostly wanted to address the parent which arbitrarily picked up data points of 2021 and right now and was comparing Austin and San Francisco. Because those specific points in time are tied to the migration of people between the two cities at a higher rate than usual.

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

#917

Post by darth_avocado »

vonneumannstan wrote: post #807
darth_avocado wrote: post #49

Earlier quoted context omitted.

It is well known that there was a brief moment in time when people were abandoning San Francisco and “moving to Texas” (mostly Austin) that coincides when the rents peaked in Austin. I’d be not surprised if that was also the time when San Francisco rents were down. We’re seeing a reversal in trend when SF is hot again and Austin is not. So not exactly a straightforward comparison. It could explain the SF-> Austin and…

The number of Tech people moving from SF to Austin and back is going to have negligible influence on the average rent in the entire city.

You mean the folk with highest purchasing power (2-3x median wages of the average person in the city) moving in and out of the city have negligible impact on the average rent in the entire city? I guess the 20% increase in rent in 2021 in Austin was just vibes.

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

#919

Post by underlipton »

ej88 wrote: post #904
underlipton wrote: post #820

Earlier quoted context omitted.

I don't know how much I buy this. Washington, DC added about 60,000 units between 2015 and now, so a little less proportionally to Austin (with 1 million residents vs 650k). Metro area, 160k more in DC, with a population of 3 million (vs 2.5 million in Austin). Even if DC's unit add is slower than Austin's, you'd expect median rent changes to be within the ballpark, right? Maybe only a slight increase instead of the…

Accounting for inflation, rents barely moved from 2022-2024 in D.C.: https://ipropertymanagement.com/research/average-rent-by-yea... I suspect most of the rent increase is due to inflation (sticker price). Nonetheless rents are still rising, which means 60k units were not enough to outweigh demand.

I'm sure 3 years noted for their high inflation rates are indicative of the preceding 7 years which were not. /s

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

#920

Post by BobbyJo »

alistairSH wrote: post #844
BobbyJo wrote: post #813

Earlier quoted context omitted.

Literally the entire peninsula of the bay area is an example of this happening. You have people voting to "keep their small town feel" sandwiched between San Francisco and San Jose.

I meant examples of increased density reducing values, not NIMBYs stopping development.

Ah, well I still think it applies as a counter example. Avoiding density makes values rise, especially when combined with increasing office space density/local job growth.

In general I don't think it requires all that much thought in terms of why/how price changes happen. Housing demand is inelastic, and you can find examples of that causing both rapid price increases (metro areas with high friction building requirements) and rapid price decreases (metros with population declines) when out of equilibrium in either direction, which is exactly what you'd expect of a good with inelastic demand.

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