4 ms·

What I'm really curious about is what happens to Austin (and to a lesser extent, Atlanta, Raleigh, Denver, SLC etc). Does Austin become the next Bay Area/next S

What I'm really curious about is what happens to Austin (and to a lesser extent, Atlanta, Raleigh, Denver, SLC etc). Does Austin become the next Bay Area/next Seattle? Crazy high housing prices, and high homelessness/crime? If so, how long does that take, and what happens to native Austinites? If not, what prevents history from repeating itself?

nine_k 5y ago
This being Texas, I suppose Austin has fewer restrictions on new development, so housing prices may be less crazy. To say nothing of taxes, which leave more of your wages to pay the rent.
- redisman 5y ago
  Austin also has hundreds of miles of land around it in all directions. Coastal cities are always expensive because of the geographical barriers causing over half of potential lands to be water and having a lot of bottlenecks to get into the city
- gopalv 5y ago
  > which leave more of your wages to pay the rent. Austin has crazy property taxes in comparison to CA, which is where they get you. 2.5% tax rate evaluated for the property prices annually, so retiring on a fixed income in Austin is a tiny bit harder than in CA (that's the real goal of Prop 13). Income taxes are easier to think about, because it goes to zero when your income drops, but property taxes based on the unrealized value of the house is completely out of your control. The homestead exemption does apply, but Prop 13 is by far the superior option for an owner, though what Austin does is better for the government's fiscal policy.
  - thephyber 5y ago
    > the superior option for an owner Agree with you, but I would guess most of the Gigafactory workers who haven’t exercised stock options probably can’t afford to own in the Bay Area. While Prop 13 probably filters down to renters in reduced rent, the supply/demand issues for housing is still pretty out of whack even with all of the new units in Milpitas. Also Prop 13 has second order effects that keep older empty nester boomers in a large house even though they would otherwise downsize if they didn’t lose such a generous benefit.
    - rcpt 5y ago
      > Prop 13 probably filters down to renters in reduced rent It doesn't. Rent is set by the market. New and old landlords have drastically different tax rates but charge roughly the same rent. Same deal with gas stations: you can't figure out how much property tax they're paying based on the price at the pump. In fact one of the main reasons California has rent control is that Howard Jarvis promised renters that landlords would be nice and pass along the cuts. Of course this was a lie and in the early 80s cities lashed out with rent control in response.
      - refurb 5y ago
        It kind of does but more in a political way. Property taxes on commercial property are also frozen and the trade off was rent control for tenants. But you are right that the rental and home sale markets are entirely different. Owning costs more than renting in SF by a large margin.
  - deleted 5y ago
    [deleted]
  - rcpt 5y ago
    That's not the "real goal" of Prop 13. California low income seniors have the California Tax Postponment Program which allows them to defer taxes until death if they wish. Prop 13 was a "tax revolt" passed because greedy angry landowners wanted revenge on the state for taxing them.
- thephyber 5y ago
  Your intuition is shared by many, but it is a little off. Lots of low/middle income Californians actually have a higher total tax burden in Texas.[1] And I’d guess that Austin is one of the places where cost of living is highest for Texas, reducing the net quality of life profit. Also, residential expansion in those two places is a bit of apples and oranges. Bay Area is surrounded by water, mountains, and Open Space Preserve. Austin is surrounded by land, land, and more land; and most of it is flat. [1] https://www.bloomberg.com/opinion/articles/2021-05-19/wait-california-has-lower-middle-class-taxes-than-texas https://www.bloomberg.com/opinion/articles/2021-05-19/wait-c...
  - jasondigitized 5y ago
    Austin is where the Hill Country begins. A large swath of it is hardly flat. With that said your main premise is correct. Land as far as the eye can see.
  - nine_k 5y ago
    This is a good point. But it does not apply to most well-paid engineers who might consider moving to Austin. Land and more land is one solution. Density and more density is another, so the downtown can actually grow bigger and bigger; if people are willing to live closer to everything, they have a better chance than in SF (but still a far cry from NYC or Chicago).
deleted 5y ago
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twalla 5y ago
Austin continues to become less and less affordable for people who aren't bringing in existing home equity from other high cost of living areas. My understanding is the bulk of offers for homes in the Austin area are from Texans and existing Austinites but the bulk of winning offers are from out of state.
- scoofy 5y ago
  This is incorrect, the property tax system in Texas should allow market forces to guide housing development. I grew up in Austin, the city is literally 3x the size when i was in high school, but unlike they Bay Area, they are building a ton of housing, and have since the 90s, because it's not profitable to just squat on undeveloped valuable property because of the high property taxes. You look at the skyline from when Dell was founded, and look at the skyline today. It's been non-stop residential housing development, and it's only accelerating. The current squeeze is sizable, yes, but the market forces are working.
  - slownews45 5y ago
    This is a major difference. In Bay Area, your prop taxes are based on time of purchase. That is game changing. Much better even to rent it then to sell it, if you are paying taxes on a cost from 20 years ago you are golden. Development is hard in the bay area too.
amznthrwaway 5y ago
[dead]
mosdl 5y ago
Austin already has plenty of homeless people, and the #s are quite comparable to san jose for example - they are just more visible in the bay area due to lax rules for them (plus weather).
- newacct583 5y ago
  > homeless people [...] are just more visible in the bay area due to lax rules for them I'm not normally someone who picks on phrasing, but this one is a little orwellian. The implication is that, while homelessness is endemic basically everywhere, the proper "rules" for them to obey are that they are not to be seen. And enforcement regimes that allow them to exist in public are "lax"? Yikes.
  - xeromal 5y ago
    I feel like orwellian is the wrong term. Isn't that geared more towards the thought police and how you feel about the government's politics? Not if you're homeless or not? I don't think OP meant anything by his post. California's policies are lax. Regardless if you think they're deserving of consideration or not, it's miserable to have a huge homeless population living next to your house. People may pretend its not real but homeless areas tend towards drugs and unsanitary conditions and it's not a great place to raise a family.
    - wpietri 5y ago
      The homeless are also people who live somewhere, just not in houses. "Lax" implies that treating them harshly would be better. But fining and jailing them isn't going to make them more able to get a place to live. Aggressive anti-homeless policies just hide the suffering from the well off.
      - deleted 5y ago
        [deleted]
  - mosdl 5y ago
    I admit, lax was the wrong term to use. Can't think of a term that means less aggressive trying to hide them.
notJim 5y ago
If they don't build housing, they will rapidly have all these problems. There's no magic here, no curse on the Bay Area and Seattle, it's all economics, though the geography of SF and Seattle don't help. From cursory Googling, it looks like Austin is beginning to upzone areas so that apartments can be built, which is a step in the right direction. From what I understand, Austin has already been struggling with affordable housing, so I don't think the outlook is very good.
- zionic 5y ago
  Bay Area does have a curse though, it’s city council is A unique mix of evil, incompetence, and self interest.
  - kelnos 5y ago
    The "bay area" does not have a "city council".
FormerBandmate 5y ago
Homelessness isn’t really caused by housing prices, people just move to worse places or get roommates. Crime definitely isn’t caused by housing prices, it’s plunged as housing prices have soared over the past 30 years
- fighterpilot 5y ago
  That correlation analysis is not good, you've got N=1 there and an astronomical number of confounders. A better analysis would be to look at inter-city or inter-municipality variability in crime and correlate that with the cross-section of housing price changes. You'll have a rich N=50 to N=5000 dataset. I don't agree with your assertion that homelessness isn't caused in part by house prices. That seems unintuitive to me. Yes some people will get roommates, but what about people that already had roommates and were barely meeting rent? Some of them will have the foresight to get up and move interstate before they get wiped out, but there's frictions and costs associated and not everyone will succeed.

nine_k 5y ago

This being Texas, I suppose Austin has fewer restrictions on new development, so housing prices may be less crazy. To say nothing of taxes, which leave more of your wages to pay the rent.

redisman 5y ago
Austin also has hundreds of miles of land around it in all directions. Coastal cities are always expensive because of the geographical barriers causing over half of potential lands to be water and having a lot of bottlenecks to get into the city
gopalv 5y ago
> which leave more of your wages to pay the rent. Austin has crazy property taxes in comparison to CA, which is where they get you. 2.5% tax rate evaluated for the property prices annually, so retiring on a fixed income in Austin is a tiny bit harder than in CA (that's the real goal of Prop 13). Income taxes are easier to think about, because it goes to zero when your income drops, but property taxes based on the unrealized value of the house is completely out of your control. The homestead exemption does apply, but Prop 13 is by far the superior option for an owner, though what Austin does is better for the government's fiscal policy.
- thephyber 5y ago
  > the superior option for an owner Agree with you, but I would guess most of the Gigafactory workers who haven’t exercised stock options probably can’t afford to own in the Bay Area. While Prop 13 probably filters down to renters in reduced rent, the supply/demand issues for housing is still pretty out of whack even with all of the new units in Milpitas. Also Prop 13 has second order effects that keep older empty nester boomers in a large house even though they would otherwise downsize if they didn’t lose such a generous benefit.
  - rcpt 5y ago
    > Prop 13 probably filters down to renters in reduced rent It doesn't. Rent is set by the market. New and old landlords have drastically different tax rates but charge roughly the same rent. Same deal with gas stations: you can't figure out how much property tax they're paying based on the price at the pump. In fact one of the main reasons California has rent control is that Howard Jarvis promised renters that landlords would be nice and pass along the cuts. Of course this was a lie and in the early 80s cities lashed out with rent control in response.
    - refurb 5y ago
      It kind of does but more in a political way. Property taxes on commercial property are also frozen and the trade off was rent control for tenants. But you are right that the rental and home sale markets are entirely different. Owning costs more than renting in SF by a large margin.
- deleted 5y ago
  [deleted]
- rcpt 5y ago
  That's not the "real goal" of Prop 13. California low income seniors have the California Tax Postponment Program which allows them to defer taxes until death if they wish. Prop 13 was a "tax revolt" passed because greedy angry landowners wanted revenge on the state for taxing them.
thephyber 5y ago
Your intuition is shared by many, but it is a little off. Lots of low/middle income Californians actually have a higher total tax burden in Texas.[1] And I’d guess that Austin is one of the places where cost of living is highest for Texas, reducing the net quality of life profit. Also, residential expansion in those two places is a bit of apples and oranges. Bay Area is surrounded by water, mountains, and Open Space Preserve. Austin is surrounded by land, land, and more land; and most of it is flat. [1] https://www.bloomberg.com/opinion/articles/2021-05-19/wait-california-has-lower-middle-class-taxes-than-texas https://www.bloomberg.com/opinion/articles/2021-05-19/wait-c...
- jasondigitized 5y ago
  Austin is where the Hill Country begins. A large swath of it is hardly flat. With that said your main premise is correct. Land as far as the eye can see.
- nine_k 5y ago
  This is a good point. But it does not apply to most well-paid engineers who might consider moving to Austin. Land and more land is one solution. Density and more density is another, so the downtown can actually grow bigger and bigger; if people are willing to live closer to everything, they have a better chance than in SF (but still a far cry from NYC or Chicago).

deleted 5y ago

[deleted]

twalla 5y ago

Austin continues to become less and less affordable for people who aren't bringing in existing home equity from other high cost of living areas. My understanding is the bulk of offers for homes in the Austin area are from Texans and existing Austinites but the bulk of winning offers are from out of state.

scoofy 5y ago
This is incorrect, the property tax system in Texas should allow market forces to guide housing development. I grew up in Austin, the city is literally 3x the size when i was in high school, but unlike they Bay Area, they are building a ton of housing, and have since the 90s, because it's not profitable to just squat on undeveloped valuable property because of the high property taxes. You look at the skyline from when Dell was founded, and look at the skyline today. It's been non-stop residential housing development, and it's only accelerating. The current squeeze is sizable, yes, but the market forces are working.
- slownews45 5y ago
  This is a major difference. In Bay Area, your prop taxes are based on time of purchase. That is game changing. Much better even to rent it then to sell it, if you are paying taxes on a cost from 20 years ago you are golden. Development is hard in the bay area too.

amznthrwaway 5y ago

[dead]

mosdl 5y ago

Austin already has plenty of homeless people, and the #s are quite comparable to san jose for example - they are just more visible in the bay area due to lax rules for them (plus weather).

newacct583 5y ago
> homeless people [...] are just more visible in the bay area due to lax rules for them I'm not normally someone who picks on phrasing, but this one is a little orwellian. The implication is that, while homelessness is endemic basically everywhere, the proper "rules" for them to obey are that they are not to be seen. And enforcement regimes that allow them to exist in public are "lax"? Yikes.
- xeromal 5y ago
  I feel like orwellian is the wrong term. Isn't that geared more towards the thought police and how you feel about the government's politics? Not if you're homeless or not? I don't think OP meant anything by his post. California's policies are lax. Regardless if you think they're deserving of consideration or not, it's miserable to have a huge homeless population living next to your house. People may pretend its not real but homeless areas tend towards drugs and unsanitary conditions and it's not a great place to raise a family.
  - wpietri 5y ago
    The homeless are also people who live somewhere, just not in houses. "Lax" implies that treating them harshly would be better. But fining and jailing them isn't going to make them more able to get a place to live. Aggressive anti-homeless policies just hide the suffering from the well off.
    - deleted 5y ago
      [deleted]
- mosdl 5y ago
  I admit, lax was the wrong term to use. Can't think of a term that means less aggressive trying to hide them.

notJim 5y ago

If they don't build housing, they will rapidly have all these problems. There's no magic here, no curse on the Bay Area and Seattle, it's all economics, though the geography of SF and Seattle don't help. From cursory Googling, it looks like Austin is beginning to upzone areas so that apartments can be built, which is a step in the right direction. From what I understand, Austin has already been struggling with affordable housing, so I don't think the outlook is very good.

zionic 5y ago
Bay Area does have a curse though, it’s city council is A unique mix of evil, incompetence, and self interest.
- kelnos 5y ago
  The "bay area" does not have a "city council".

FormerBandmate 5y ago

Homelessness isn’t really caused by housing prices, people just move to worse places or get roommates. Crime definitely isn’t caused by housing prices, it’s plunged as housing prices have soared over the past 30 years

fighterpilot 5y ago
That correlation analysis is not good, you've got N=1 there and an astronomical number of confounders. A better analysis would be to look at inter-city or inter-municipality variability in crime and correlate that with the cross-section of housing price changes. You'll have a rich N=50 to N=5000 dataset. I don't agree with your assertion that homelessness isn't caused in part by house prices. That seems unintuitive to me. Yes some people will get roommates, but what about people that already had roommates and were barely meeting rent? Some of them will have the foresight to get up and move interstate before they get wiped out, but there's frictions and costs associated and not everyone will succeed.