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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

#951

Post by estearum »

modriano wrote: post #522
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?

The prices may be falling, but if you can still make more profit (per unit time) building in Austin than elsewhere (due to less red tape or more local builders or whatever), building will occur.

No, it's absolutely possible that building as a whole is not a good use of capital. There is not some fixed quantity of people-who-must-build and dollars-that-must-be-spent-building.

If the incentive disappears, the people and dollars disappear. And they have to clear a much higher bar than merely being profitable. Because it's a capex heavy industry, development must compete against other ways to invest capital (like S&P 500 or the US 10-Year).

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

#952

Post by estearum »

sophrosyne42 wrote: post #538
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?

Supply increases until the market reaches saturation. The question is why build more housing if the current supply is sufficient?

Saturation == until it's not longer a comparatively strong use of capital, not "until a significant portion of people are comfortably housed."

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

#953

Post by autoexec »

orangecat wrote: post #870
autoexec wrote: post #380

Earlier quoted context omitted.

> At the price of making people's lives miserable due to substandard housing if it's done wrong. I'm curious to see how Austin will do in the near future by that same metric. More people can afford a place that will let them pay rent, although now at least some of those people will be living in someone else's basement or garage. These may not be very nice places to live, but they may be all some people can afford. Th…

They've also removed the regulation requiring a second way out of a burning 5 story building. This has been well studied. Requiring two stairways significantly increases costs, constrains layouts, and is not actually safer: https://www.pew.org/-/media/assets/2025/05/single-stair_repo...

The Center for Building in North America has been aggressively pushing for these single stairwell reforms all over the country. Stephen Smith, writer of that report, is the founder of that group as well as the founder of Quantierra a real estate tech company.

The real estate industry is in huge support of this particular reform, and they stand to massively profit from it, but the people who are strongly against it include The International Association of Fire Fighters, the National Association of State Fire Marshals, The International Association of Fire Chiefs, and The National Fallen Firefighters Foundation. These are the people who are most informed about the dangers and risks involved and in what safety measures are required to save lives and fight building fires effectively.

The report itself does make some very good arguments like how much safer modern construction has become, and also some rather weak ones (for example it ignores the poor quality of data on fire and smoke related fatalities in the US, as well as important differences between the US and Europe) and I'm not even saying that single stairwell buildings can't ever be made safely, but if safety really wasn't a problem we wouldn't see a lack of support from firefighters who are the actual experts in this space. Until they are convinced of the safety of these reforms real estate developers are going to have a hard time convincing me.

Here are a couple of their objections:

https://www.iaff.org/wp-content/uploads/2024/06/JointStateme...

https://cityclerk.lacity.org/onlinedocs/2025/25-0247_pc_IAFF...

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

#954

Post by gravypod »

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.

An ex of mine mentioned to me that she was going to join a local community group trying to prevent development on an empty lot near her apartment. I asked why she would want to do that? Her concerns, and the concerns of the people she was showing me on facebook, were:

1. "They didn't do an environmental review" 2. She didn't want to hear construction noise. 3. She didn't want the construction to cause rats to leave the lot and go to buildings. 4. She also said she didn't want her rent to go.

I believe it was this lot: https://web.archive.org/web/20250821002539/https://www.nytim...

I think it is common for people to organize, even in the most urban and educated areas in America, against their own interest.

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

#955

Post by ej88 »

underlipton wrote: post #919
ej88 wrote: post #904

Earlier quoted context omitted.

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

either way, it's clear they didn't build enough

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

#956

Post by polothesecond »

gravypod wrote: post #954
Forgeties79 wrote: post #856

Earlier quoted context omitted.

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.

An ex of mine mentioned to me that she was going to join a local community group trying to prevent development on an empty lot near her apartment. I asked why she would want to do that? Her concerns, and the concerns of the people she was showing me on facebook, were: 1. "They didn't do an environmental review" 2. She didn't want to hear construction noise. 3. She didn't want the construction to cause rats to leave t…

[dead]

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

#957

Post by OneDeuxTriSeiGo »

7speter wrote: post #387
OneDeuxTriSeiGo wrote: post #350

Earlier quoted context omitted.

Not really? "The projects" are a consequence of a very specific approach to government housing construction. There's an alternative approach which mirrors the public healthcare concept of "public option". Instead of restricting government housing to means tested individuals or specific low income populations, you develop a public competitor to drive prices down and to eat costs in regions where housing is needed but…

Any program created by the US government can be captured and handicapped, like has been done to the USPS. Also, the Postmaster General was on Capitol Hill today saying how this time next year the service won’t be able to afford delivering to all addresses in the US.

> Any program created by the US government can be captured and handicapped, like has been done to the USPS.

Agreed but even despite that they generally are a net positive.

> Also, the Postmaster General was on Capitol Hill today saying how this time next year the service won’t be able to afford delivering to all addresses in the US.

The same postmaster general who is a longstanding board member at FedEx.

And the US Post was still an extremely effective agency for well over 150 years, only truly beginning to become shackled when Nixon transformed it into the USPS in the 70s, and even then it retained most of its efficacy until the 2000s and 2010s when it truly began to fall onto its last legs.

But also despite being shackled the way it currently is, it's not exactly nontrivial to reform it provided there was any political momentum towards doing so. So it may get its legs back in the days following this administration.

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

#958

Post by torginus »

HDThoreaun wrote: post #945
torginus wrote: post #843

Earlier quoted context omitted.

Why should housing be an investment?

Because we live in a democracy and voters want housing to be an investment because they own housing

I own both a car and an apartment. The former is not an investment and most money people say you shouldn't consider the one you live in an investment.

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

#959

Post by Hammershaft »

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…

Is that necessarily true or just incidentally true in certain metros given the regulatory restrictions we have now?

Our food is supplied via markets and yet with just subsidies almost nobody starves across western countries.

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

#960

Post by crypto_is_king »

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.

Wow, that sounds racist /s
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