Affordable housing and gentrification solution (Austin, Mission: real estate, 2015, apartments)

[Austin97]

The east side is where everyone is mostly complaining residents cannot afford to live.

Here is a solution

1) rezone to allow multifamily (row houses or condos) and higher usage of the lots (reduce impervious cover)
2) Create a program that east siders can sign up for where developers will build multifamily condo or apartments where the original owner gets a unit *and* they get income from the rest of the property.
3) the builder will pay for a place for the owner to live while the new construction is built
4) some of the units could have retail on the first floor so the area becomes mixed use.
etc
etc

I imagine the equivalent of mueller style row houses with 4-6 units on a lot.

[Aquitaine]

3) the builder will pay for a place for the owner to live while the new construction is built

You just drove up the cost of buying under your plan by quite a lot. Why would any builder want to be in the business of relocating anybody and paying their rent? As a landlord I would never accept someone who had no skin in the game.

#1, #2, and #4 are all happening in Mueller. There are several places that come with garage apartments - trouble is that they're the 'larger' single family homes. The two we saw were both over $800k. Rents are high enough there that your rental could bring in $1000+ a month for a 600 sq ft garage apartment, so that's pretty good, I guess. They also have 'shop houses' with retail space.

The trouble with trying to dictate affordable housing is that you end up with exactly what Mueller is: a lottery for folks who earn below an arbitrary threshold where they don't actually own their homes - the 'Mueller Foundation' has a lien on it and if you ever sell your affordable home, you recover your initial investment plus whatever Mueller decides you get in appreciation so that they can then turn around and assign it to another affordable home buyer. The result is indeed an affordable entry point for lottery winners (seems to be in the $125-$160k area last I looked) but this drives up the cost of everything else, such that if you don't qualify or don't win the lottery, you aren't getting a single family home there for under $375k. Like many government 'affordability' programs, it cuts out the middle class and puts the government in charge of picking winners, where 'winning' means you're making mortgage payments on a home that is only kinda-sorta yours because you can't ever get out from under the second lien.

Mueller has fourplexes, townhosues, and apartment buildings. There have been arguments made that the whole thing should have been a lot more dense, and that's about the only way I can see that you'd bring the entry point down - by raising supply. Then you're just making the statement that 'to live here, you have to live in a row house or a condo,' which would cut out a big chunk of the market that has bought there - but you'd definitely have more affordability.

[scm53]

Dan Keshet has a nice blog post this AM on ways market forces can help affordability, without a command side factor - as exemplified by the recent 7-4 Gibson Automotive rezoning case:

Casar invoked the concept of “filtering up”: when relatively expensive new housing doesn’t get built, landlords “filter up” older housing to serve a higher income market by charging higher rent (and, sometimes, upgrading the apartment). Delia Garza invoked the concept of gentrification, and said that, if inadequate supplies of housing are built in places like North Shoal Creek, this would add to gentrification on the East Side.

The NIMBYs that fight density, even in places where it makes total sense (like along Burnet Road!) are so selfish that they don't understand they are causing price increases -- and therefore, unaffordability -- throughout the urban core.

It doesn't take government intervention -- it takes the free market, a concept lost on at least one economically illiterate council member.

[verybadgnome]

Miami might have lessons for the rest of us:

Unlike in many other cities that have seen similar rapid growth -- where professional-class influxes have brought displacement to ethnic neighborhoods such as San Francisco’s Mission District or D.C.’s U Street Corridor -- Miami hasn’t witnessed a spillover of the banking class into either the Little Havana or Overtown neighborhoods. According to the real estate site Zillow, median home values in both neighborhoods are about half of what they are citywide and about one-third of Brickell’s. While both areas have some new condos, they are still predominately historic and low-slung. Most important, people there have stayed put. Both Little Havana and Overtown remain 95 percent non-Anglo, with median incomes below $24,000.

How Miami Fought Gentrification and Won (for Now)

[sojourner77]

key statement:

cities need to build up. If they don’t, he warns, wealthy people who would buy high-rise units will instead buy older housing and displace longtime residents and businesses.

The premise is that density will attract the creative/wealthy class, and the ethnic neighborhoods will remain intact. Where in Austin shall we build this density? Downtown (UT/Lamar/Town Lake/I-35) is a finite area. We now have to invade "ethnic" neighborhoods for locations to build these hi-rises.

Travis Heights, Tarrytown, Hyde Park (and the like) won't allow this up-zoning. The second premise here is that gentrification is bad, and needs to stop. It sounds like the crappy neighborhoods in Miami have been allowed to stagnate, and it's residents be left out of the nationwide rise in wealth due to rising property values. Huge disservice to them if they ever want to retire, or move to a nicer/ newer neighborhood, as they have been denied the equity that would allow them to do so. Poverty has been re-enforced upon them.

[Novacek]

Originally Posted by sojourner77

The premise is that density will attract the creative/wealthy class, and the ethnic neighborhoods will remain intact. Where in Austin shall we build this density? Downtown (UT/Lamar/Town Lake/I-35) is a finite area. We now have to invade "ethnic" neighborhoods for locations to build these hi-rises.

Or, you know, the hundreds of square miles of Austin that 1) aren't that downtown zone you identify 2) aren't "ethnic".

i.e. anywhere North, South, or West of downtown.

[AustinDude360]

I can't really see gentrification stopping unless you pulled out a significant amount of the tech jobs out of the area. If you have noticed, where tech & financial jobs go is where cost of living goes through the roof (San Francisco, Seattle, East Coast, Raleigh, etc) because there is a huge income gap between those workers and say blue collar folk working for the man (Look up the articles criticizing tech jobs like Facebooks' demographics and conversions now that "fit" is being talked about as job discrimination). These tech workers usually have a profile about them where they are typically younger, single, make a significant amount more than the median income in the area, and want to live in downtown. They have certain likes and pay up for it since they can afford it.

See article below for the study showing the correlation:
https://www.redfin.com/blog/2015/06/...l#.VZLXxvlVikr

You can pull the software companies out hypothetically, but then the entire area would experience a huge recession. There isn't much else unless you start putting in affordable housing laws like in San Francisco...good luck with that