Good read if you’re in to that sort of thing 
Alotta hate on landlords I’m not certain is warranted. Is the tile guy charging $6,000 to tile one (1) small shower in one (1) day of work any less greedy? (comes out to roughly $650,000/year @ 2 working days/week). And who will pay the 3x more expensive plumber for the broken water main or to fish the tampons out of the sewer line? What about all the materials vendors charging 4x regardless of stock. I wonder if any of them complain about housing costs, because increases in rent “funnel” into their pockets more than anyone else’s. What about the tax man squeezing 5x my original tax bill? Appliances, new roofs, window replacements, etc. add to the load. As a small-fry landlord, I’m getting out of the game because going underwater isn’t the retirement plan I hoped it would be. Most landlords across the country are mom n pop folk like me with a coupla houses, not huge corporations. But when my little houses are scaped and you get your wish for big ugly, 60 story apartment buildings as far as the eye can see, who will borrow the millions, figure out the code, take all the risks and build something people will want to live in? It won’t be me, and certainly not a union.
I mean I think that’s reading past the point a bit. The idea is that without government intervention in the supply and demand markets through single family zoning and other measures you would see housing supply meet with housing demand and prices would be relatively flat.
rooted in the fact that we have now spent decades failing to build enough new housing to keep up with growing demand. We do not have enough housing supply where people want to live.
To read into that landlord hate is to not read much past the headline. But yes…
You have to have a vision beyond single family zoning. It doesn’t have to be binary all in or all out, but it does have to be something and it does have to recognize that just because you got here first shouldn’t mean others are excluded from opportunity.
One of the major components of the housing stock in residential neighborhoods is land. Many, if not most of the properties in Ziker, have a house that will be demolished upon sale. By definition, the entire value of those properties is from the land, although I cannot convince TCAD of that fact.
Occupied land in residential neighborhoods is something whose supply cannot be increased, unlike widgets or dwelling units. In economic terms the supply of land is perfectly inelastic. That input must be factored into the supply/demand calculation. It’s not as simple as building more dwelling units. Increasing zoning entitlements to allow more dwelling units on a given piece of land will raise the price of that land, followed by higher taxes, and subsequently the price of housing to the occupants. There is also the other end of the spectrum where changing the nature/ character of a place in a negative way drives down demand and prices because less people want to live there.
Dave Piper
| JpMaxMan President
August 30 |
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I mean I think that’s reading past the point a bit. The idea is that without government intervention in the supply and demand markets through single family zoning and other measures you would see housing supply meet with housing demand and prices would be relatively flat.
rooted in the fact that we have now spent decades failing to build enough new housing to keep up with growing demand. We do not have enough housing supply where people want to live.
To read into that landlord hate is to not read much past the headline. But yes…
jackolbean:
But when my little houses are scaped and you get your wish for big ugly, 60 story apartment buildings as far as the eye can see
You have to have a vision beyond single family zoning. It doesn’t have to be binary all in or all out, but it does have to be something and it does have to recognize that just because you got here first shouldn’t mean others are excluded from opportunity.
As my economic professor used to say… assuming a perfect economy the supply and density of housing would increase until demand is met thus keeping the prices relatively stable… this assumes no regulatory interference. Of course, there is no such thing as a perfect economy so yes there will be bubbles and we don’t want extreme up zoning. But the obstructionist stance the ZNA & ANC as a whole has taken for years opposed to virtually any change, is directly responsible for the housing crisis we find ourselves in today. I mean sure there’s the growth of the city, but one could argue if you hadn’t kept our neighborhoods so nice it would of slowed the growth as well. 
That last bits a joke.
When I got my economics degree I learned that your professor is mistakenly treating land economics as simple supply and demand instead of a special case with inelastic supply of land.
Dave Piper
Yes land supply is in fact mostly inelastic. Tokyo and New York have both famously created land, but that’s atypical.
In the context of densely residential environments, the utility of land is the capacity to build housing units.
Today, 5700 square feet of land are required to have an entitlement to build a home. Austin’s uniquely large minimum lot size serves as a man-made barrier to entry of home ownership.
If 2500 square feet of land provided an entitlement of 3 housing units via a simple code change, the supply of housing unit entitlements would go up AND the fixed costs attached to the entitlement would go down. Assuming demand trends for said housing units remained roughly the same as before the change, one would expect lower costs for homes. This is all possible even if land prices stay constant or even increase.