<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!
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City of Austin and OpenOffice/Open Source Trials
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!