Comments

Re:Trickle down? by ccosart — last modified Jul 03, 2006 12:31 PM

I'd have to say I agree with M1EK's response. Sure building luxury condos isn't the whole solution, but we've already seen more moderately prices developments started (Spring, opposed by my NA (BCNA) and your NA if you live in Barton Hills). I think we'll see more Springs and fewer Nokonahs in the future.

One other thing, that's the median household income, not the average salary. Important point: for many of those households BOTH parents are working. That means their salaries are more like 35k. Plus if they have pre-school kids, they are probably are spending at least 600 a month on day care per kid. A much different scenario than one person making 68k.

Pedantic point: median and average are different measures. Sorry, I work with stats for a living. :)

<i><b>Ed. Note</b> - Thanks for the catch! I've updated the entry with your correction. Thanks for reading and leaving your comment! </i>

A complete misunderstanding of economics by M1EK's Bake-Sale of Bile — last modified Jul 03, 2006 09:20 AM

Am I the only Austin environmentalist who understands economics?

Re:Visions of Austin by M1EK — last modified Jun 02, 2006 04:05 PM

Oh, come on. Even if every single apartment being built downtown costs $5000/month, increasing the supply of ANY kind of housing in this area reduces the growth in cost of other housing units.

New housing units, especially downtown, are never going to be cheap and hardly ever even affordable. That's the way the multi-family market works - properties generally get cheaper with age as newer, fancier, stuff gets built. (My condo in Clarksville, for instance, saw its rent drop a couple years ago and still hasn't recovered - partially due to the dramatic increase in supply of downtown housing taking pressure off the nearby midrange stock).

Re:Visions of Austin by paleo — last modified Jun 02, 2006 10:05 AM

M1EK said,

<i>"New housing units, especially downtown, are never going to be cheap and hardly ever even affordable. That's the way the multi-family market works - properties generally get cheaper with age as newer, fancier, stuff gets built. (My condo in Clarksville, for instance, saw its rent drop a couple years ago and still hasn't recovered - partially due to the dramatic increase in supply of downtown housing taking pressure off the nearby midrange stock)."</i>

I agree with you here in general (but do disagree a bit below) but that does not invalidate the point I was making addressing Toby Futrell's claim that they are striving to make Austin "the most livable" in the country. One thing that needs to be mentioned is that "livability" is more than just property values. It's a summary, a perception or a snapshot of what the community is like for it's residents. I linked to multiple indicies that refuted Ms. Futrell's claim that their overarching vision is to make Austin "the most livable."

As for your partcular point, one way I look at it is with 20 buildings with 200 condos each (we'll work with a nice, even number) of the downtown developments going "luxury" (with properties starting at $200k and probably averaging over $300k), essentially, the Austin housing market is adding 4000 homes at $300k and over to the limited supply of new homes being built throughout Austin proper. This will not, in my opinion, lower the cost of "livability" here in Austin citywide. For example, adding 4000 luxury condos will do nothing to help the "livability" of those residents in East Austin and in fact, could lower the "livability" for those East Austin residents as our city council forces the unsavory infrastructure pieces into their backyards (I would think that property values would go down near a water treatment plant but I could be wrong about that).

As far as your example of your condo, I would argue that your property did not go down because of new condos being built downtown but because there were new properties in a similar price range coming to market all over town in other sought-after locations which led to the reduction in price due to greater supply of that resource in that particular price range. A $300k condo is not an affordable resource for most people (according to a few websites <a href=http://www.fool.com/homecenter/finance/finance01.htm>this</a> being one of them), if 29% of your annual salary is the maximum that most mortgage companies will allow for the loan, then the minimum you have to make yearly is $63k+ (I used a simple mortgage calculator to arrive at that: $300k x 5.7% / 30 yrs = $1,750/mo x 3 = $5250/mo x 12 = $63k avg yr salary which just happens to be right on Austin's avg salary). So, based on this logic, bringing these properties onto market will not lower Austin's "livability." At best, it will keep it at status quo which is against what Toby Futrell claimed is their overarching vision -- "to make Austin the most livable city in the country." (median income here in Texas based on <a href=http://www.census.gov/hhes/income/4person.html>census</a> stats is $54k/yr. Using the above formula, there would need to be a rush to market of properties averaged below $250k and below to pull the "livability" back and have Austin start moving down the "livability" list to make Toby's claim truthful.)

And Pat, I'm all for progress; I'm not one of those stick-in-the-mud curmudgeons that says the good ol' days are better than today. But what I am worried about is that Austin doesn't lose what defines Austin. In my opinion, Austin isn't about $500k condos in massive multi-million dollar towers, Ferrari's and massive office complexes over sensitive environmental areas (that's Dallas without the sensitive environmental areas...). I'm concerned that the change being brought on by the last few councils endanger those few things that define what Austin is as a city and why people do want to live here. I think most people would agree that one of the great things about Austin is that you can ride on your bike one mile from downtown and get on a trail that will take you to the boonies and away from the sprawl (I use that trail just about every day on my daily commute to work on my mountain bike). If we keep paving over the green spaces, Austin loses one of it's defining characteristics. It would be much like losing the live music outlets, UT or the bats under Congress. There are few things that define a city and in my opinion, based on some of the recent development decisions by the council, the path we're on seems to be endangering one of the qualities that define us as "Austinites."

Thanks to both of you for reading and I appreciate the comments. I'm planning to better clarify my points in a follow-up post but work calls now!

Re:Visions of Austin by Pat — last modified Jun 01, 2006 03:49 PM

"These are not exactly the most livable conditions in the country."

Depends on who is doing the living. I've been hearing this claim the entire 26 years I've lived in Austin, yet it hasn't stopped folks from relocating here ever since. Seems everyone says the city began costing too much soon after THEY moved here. Yes, it's getting expensive to live in one the most desirable places in the country. Live with it or move along. Progress marches on.

Re:Visions of Austin by M1EK — last modified May 31, 2006 08:00 AM

Sorry, but you're absolutely wrong on economics here. Even building nothing but luxury housing units will eventually relieve (some of) the pressure on moderately-priced housing stock, period.

The condo I own in Clarksville is one of those (currently appraised at 150K-ish; bought for 92K - both numbers are irrelevant; what matters is that the rent dropped from $1200 four years ago to $1050 the next year and hasn't made it back up to $1200 yet).

It doesn't matter that the NEW housing stock is 'unaffordable' - what matters is that it relieves (some of) the demand for other housing stock, which then gets lower in price. This is the only kind of trickle-down economics which actually works.

I keep saying (some of) because frankly the amount of downtown development so far has been pretty small. The new buildings being proposed (and especially the West Campus spurt) may finally be enough to make (some of) change to (most of), if demand for central housing doesn't further skyrocket due to other factors like oil prices.

Re:Is My Precinct Representative? by DSK — last modified May 15, 2006 10:20 AM

I think what it comes down to is that people in Austin, especially those that turn out to vote, are fairly well educated. When they see a proposal that wants to call out a specific corporation in the *city charter* they recognize it as dumb. Smart people generally not inclined to vote for incredibly dumb wording, even if the author's heart is in the right place. Austin voters are still plenty progressive; they just don't want to be insulted with dumb temper-tantrum language.

Re:Is My Precinct Representative? by The Muckraker — last modified May 15, 2006 08:38 AM

The media should bring balance to community and special interest issues.

Instead, some of the media is just plain incompetent.

Others, like the Statesman and the Chronicle are now deeply entrenched as part of the establishment who fall in line and no longer focus on reporting the news, but instead, shamelessly help shape the news and effect an election with heavy hands.

The last many weeks of Statesman daily articles, editorials and cartoons against props 1 & 2 lopsidedly outweighed the needed in-depth reporting of those propositions. The Chronicle's bias of allowing reporters to work for the special interest's TateAustin makes them anything but an alternative newspaper.

This town needs an ice cold water enema.