Austin renters face soaring costs in ‘extraordinary market’ (Round Rock: real estate market, 2013)

[scm53]

Originally Posted by brattpowered

They're blaming people who want to protect Barton Springs? How about those who refuse to allow more housing units on the existing city footprint? Allowing more density in the core is the most sensible solution to the problem.

I think they did:

Some who work in the development industry cite other reasons, including convoluted building rules, a slower-than-necessary approval process and energetic opposition from neighborhoods who worry their leafy, quiet enclaves could be overrun by apartment complexes.

It isn't any one, but a combination. And while you may be in favor of ruling huge swaths of Austin as off limits to development, that too contributes. An unintended consequence, but a consequence nonetheless.

[austin-steve]

Originally Posted by ScoPro

Saw on the news recently that 6,000 new apartments will be coming on line this year - that ought to provide a little relief for some. It's a good time to be a land lord.
...

Rent increases are largely consumed by higher property taxes and insurance costs. I manage almost 100 single family homes in Austin for absentee landlords, and the emails of disbelief have been streaming in since last week about the property tax increase letters.

It often goes like this ...

Q: How can my home have gone up that much?! WTF!! Can we protest?
A: It's actually worth more than that, so a protest is not possible as I have no data to support a lower value.

Q: Will a rent increase cover it?
A: No, not quite, but it would cost you more in turnover costs if we price the tenant out and they move.

Q: Is it a good time to sell?
A: Yes, it's an excellent time to sell.

A: Let's list it.
A: OK

This is a classic lose/lose for landlords/tenants.

It's a win/lose if the landlord decides to sell, as many are. They get to cash out in a hot market, but what can they reinvest the equity? There are no good long term fixed rate investments available.

And the tenant is displaced and unable to find a substitute rental at the same rate he was paying previously. So the choice for the renter is to a) move further out, b) take a smaller house to keep the rent almost the same, or c) simply pay higher rent and take up the slack elsewhere in their personal budget.

Example: House I am selling in Central Austin. 3/1 w/carport, 1025 sqft,
sold for $58K in 1996
sold for $171K in 2005
sold for $233K in 2007
listed for $289K now,
going under contract today.

2014 tax value increased to $250K from 22K in 2013, a 12.6% increase

Tenant was paying $1,400/mo and has been given notice to vacate by May 31. If I had renewed with a $50 (3.6%) increase, it would NOT cover the $56/mo increase in property taxes.

A substitute home at the same price in the '04 does not exist, so I'm not sure what a tenant in this situation can find. The buyer of this home is no doubt "settling", because, at present, it's the ONLY decent house with 3 bedrooms for under $300K.

So, thank you city leaders for your stupidity, lack of foresight, and ignorance. And good job voters for continuing to put the same people in charge, year after year, who all think with the same faulty logic. Maybe when we get a 10-1 we'll get some real diverse thinkers on city council instead of all beholden to the central Austin, ANC (Austin Neighborhood Council) mindset.

Meanwhile, the affordability train has left the station. The blue light was the weirdness, and the red light was the time.

Steve

[ScoPro]

Like the small homeowner, the renter is getting squeezed out.

Several years ago a friend of mine sold his 40 unit (plus or minus a few) apartment building near Exposition & Enfield for a tidy sum. He had bought it in the early '70s and had paid it off long ago, so he had a good positive cash flow for about 20 years. However it got to be a PITA to keep such an old property properly maintained (he had the swimming pool filled in to relieve him of that expense).

Whoever bought the place tore it down & built some new condos on the 1 acre+ lot.

[verybadgnome]

The 2008 to 2011 timeframe is where the bottom fell out of the housing market and banks tightened their lending requirements to individuals and developers. If we had kept adding 10k+ units per year like before the occupancy rates would not be so high and housing would be more affordable.

SF and MF Building Permits in Travis County:

1998|| 1999|| 2000|| 2001|| 2002|| 2003| 2004 |2005|| 2006|| 2007|| 2008|2009| 2010|2011| 2012|| 2013
11,355 13,056 14,269 10,692 10,595 8,565 10,658 14,234 15,738 12,021 6,848 5,249 4,397 5,761 12,482 13,905

[10scoachrick]

Originally Posted by verybadgnome

The 2008 to 2011 timeframe is where the bottom fell out of the housing market and banks tightened their lending requirements to individuals and developers. If we had kept adding 10k+ units per year like before the occupancy rates would not be so high and housing would be more affordable.

SF and MF Building Permits in Travis County:

1998|| 1999|| 2000|| 2001|| 2002|| 2003| 2004 |2005|| 2006|| 2007|| 2008|2009| 2010|2011| 2012|| 2013
11,355 13,056 14,269 10,692 10,595 8,565 10,658 14,234 15,738 12,021 6,848 5,249 4,397 5,761 12,482 13,905

Who is we? The CoA is not in the business of building apartment complexes...I don't think. I recon most landlords/mgmt companies right now are happy to raise the rent without improving the properties...partly to cover the higher taxes, partly to enhance the bottom line. How would lower occupancy rates and lower monthly rents benefit them?

[Trainwreck20]

How would lower occupancy rates and lower monthly rents benefit them?

....by multiplying by more properties. Most landlords would like to have 2x the properties charging 1.5x the current rate. Renters right now are being forced far afield...

[JT-3]

I think we need more rain and a market correction. This is bananas.

[Komeht]

Originally Posted by JT-3

I think we need more rain and a market correction. This is bananas.

The market is correcting...upwards. There is not going to be a downward move in prices until one of two things happen:

Austin becomes a relatively less desirable place to live.

Or

We actually reform our land use codes in a way that permits supply to meet demand.

Until that time, we reap what we have sowed, and we earned every goddam penny of it with our ridiculously restrictive land use regs.

[Eastcoasting]

Originally Posted by JT-3

I think we need more rain and a market correction. This is bananas.

Well without rain there is going to be a hell of a market correction/implosion.

FWIW we actually took the no rain/water, toilet to tap scenario into account when we bought a house, we still purchased but it certainly kept us on the more modest end of our budget.

[riaelise]

The salaries need to increase too. The h/h income of Austin as a whole doesn't correlate with the housing costs. Kinda like NYC.

I've said this before - I get paid LESS here but my housing cost is more. Whassup with that?