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Visions of Austin
"Not so fast, opponents say. On Saturday, 69 percent of voters cast ballots against the measure. So some neighborhood and business leaders say that those ideas have been roundly rejected and that more community input is needed to create a lasting solution to the vexing issue of development in the environmentally sensitive area. Council Member Lee Leffingwell, who crafted the ordinance, plans to slow the process and allow for a larger community discussion to take place. Input from interested parties as well as the two city bodies now considering the ordinance will provide the springboard for conversation."Now, some would argue (myself included) that the 69% figure used above is completely misleading. While the propositions may have been defeated by 69% that does not, by association mean that 69% of the people of Austin are against protecting the Barton Springs watershed. Most of the Prop 2 opponents had said that protection of Barton Springs is sorely needed but they just didn't agree with how the propositions sought that protection. The fact that 31% of the people of Austin still voted for the propositions considering the outright misleading ballot language is a strong indicator that the citizens of Austin really do value environmental protection over development in sensitive environmental areas. So now we come to Council Member Leffingwell's statements. On the one hand:
"These charter amendments were written behind closed doors with no public input, no vetting and no opportunity for changes to correct errors and unintended consequences," says Lee Leffingwell, an Austin City Council member who is former chairman of the city's Environmental Board."And now the other:
"Will you answer specifically which reforms you support and which you do not? I AM STILL IN THE DISCUSSION STAGE WITH REGARD TO WRITING THE ORDINANCE, AND SO CAN'T COMMENT ON ANY ASPECT OF YOUR SCORECARD AT THIS TIME."Pot, may I introduce Kettle... (More on that from a blog post by JS Hatcher). Also, looking around in Council Member Leffingwell's campaign finance reports, one notices that the only PACs that gave Mr. Leffingwell money during that election cycle all had something to gain by defeat of the propositions (granted, these filings were in the 2005 election cycle and the Open Government/SOS amendment campaigns were ongoing but probably not a campaign issue at the time):
- Austin Apartment Association
- Austin Board of Realtors
- Austin Police Association
- BOMA
- Homebuilders PAC
"presented an audit that found that Austin does not have an "overarching vision for growth" or anything that ties together a patchwork of smaller city-planning efforts."To which the City Manager took offense and disagreed with 3 of the 4 study authors by saying:
"In fact, the City has a vision and it is widely recognized. Our vision is for 'Austin to be the most livable city in the country.' "May I introduce Exhibit A against City Manager Futrell's claim. In the studies cited in the post, Austin ranks as the third highest cost of living in the country. Higher than traditional high cost leaders San Francisco (10th), Boston (9th), Chicago (8th) and Atlanta (4th). Austin has the 4th highest average house cost in Texas (behind Ft. Worth, Dallas and San Antonio) and ranks number 12 nationally for the highest average cost of the typical home in America. These are not exactly the most livable conditions in the country. Now, does city planning have anything to do with this rise in prices? As cited in this document, my guess is that the 29 now-under-construction-or-planned residential developments and super-condos being built on the shores of Town Lake, throughout downtown and in the ultra-swanky 2nd street area will only further inflate these cost of living indices (most have starting prices in the $200's for a 1/1). One can certainly make the argument that development should take place in downtown (I do support that) but of all the projects listed, from what I can tell, not one project is an affordable housing project. So I have to agree with City Manager Futrell here. She does have an "overarching vision" of Austin. Under her's and the City Council's leadership, they seek to make Austin unaffordable for most residents. They seek to transform the prime green spaces and park lands of Austin into multi-story, multi-million dollar condominiums, raising the cost of living while attempting to replace the few East Austin parks with nasty infrastructure plants needed to clean the crap out of the water from these lofty, rich residents and the eventual Dallas-like sprawl of SH 130. They seek to keep their vision of Austin planted in future city council elections by raising campaign contributions, creating slush funds and erasing term limits. Yes, Ms. Futrell, you and your Council Member friends have a vision for Austin. Unfortunately, it seeks to replace what some of us have come to believe what Austin is about and replace it with a miserably cloned vision of Dallas. I came from Dallas after 17 years of living there to Austin for the last 10, with most of that time in the Barton Hills area so I've seen the pace of change downtown under a close lens. I can't help but think that with the most developer friendly City Council in my memory along with the unification of former Council Members and Mayors against environmental protections for Barton Springs, it won't be long before we'll see the 580-ft towers being grandfathered in overlooking Barton Springs Pool.
Trickle down?
"presented an audit that found that Austin does not have an "overarching vision for growth" or anything that ties together a patchwork of smaller city-planning efforts."To which the Ms. Futrell, who disagreed with 3 of the 4 city auditors who authored the report replied:
"In fact, the City has a vision and it is widely recognized. Our vision is for 'Austin to be the most livable city in the country.' "I linked to a few indicies that refuted that claim and the post got a few comments, but none seemingly more vocal or condescending than M1EK, but he did put me on the path to research his claims which eventually led me here. Now, M1EK's been making a claim that by building luxury condominiums downtown, by the mystical force of "trickle down," Austin's housing market will actually become more affordable (btw, he has never linked to anything that would support this point of view). I've seen this comment of his on mine and a few other blogs (actually highlighted here) and I still have serious problems with this assertion. The vehicle that M1EK is using for this argument is now called supply-side economics. In his example, by adding more supply to the market, no matter what the price, it will eventually bring lower prices long-term to the whole market, not just the luxury segment where the current supply is being increased. While that may be true in general terms, I'll put forth that the supply isn't the greatest determining factor in this "affordable housing" scenario; I feel the demand in this limited market segment will be the more important quality as that will drive up the existing outlying property prices and will not, as M1EK asserts, increase affordability for the general public. Below, I hope to show that while in theory, M1EK's premise is generally correct for most things, there's not enough places (or plans) to build the sheer number of condominiums needed to make his assertion true in this case. The Parking Lot In M1EK's example:
"The only thing worse for affordable housing than building a bunch of high-priced condos downtown and continuing business as usual everywhere else is: NOT building high-priced condos downtown and just continuing business as usual everywhere else. Trickle-down sucks in tax theory but it works like gangbusters in real estate. I own a moderate condo unit near (not in) downtown and I can tell you that it's fairly easy to observe a depressing influence on the rent I can get for it thanks to the indirect influence of those downtown units. Some folks who used to live in high-end housing in that neighborhood (Clarksville) now live downtown; some people who used to bid up the price for moderate housing like mine moved up to previously high-end condos in Clarksville."So to begin, let's use a thought exercise... My premise is while I agree that we have to start building at some point, we're not going to get affordable housing only building luxury condos. Where I work, there are approximately 200 parking spaces in the parking garage and across the street from the building. If you're a manager, you get a reserved space otherwise, it's first-come, first-served. Out of the 200 total parking spaces, approximately 50 of them are reserved. There are about 300 employees (250 regular employees and 50 managers) in my department so on any given day, probably 250 or so show up for work and require a parking space (not everyone drives a car in; some bus, some ride bikes, some car pool, some are sick, etc). We already have too many people for the available spaces so demand has already outpaced the supply for the freely available spots (much like the overall housing market here in Austin). Now, let's start adding new employees, say 5 per quarter (20 per year), 4 regular employees and 1 manager. We already have 250 people trying to snag one of the available 150 parking spaces so the demand is already at a premium. Now, when the new employees start, one of the freely available parking spaces becomes assigned for the new manager, decreasing the available supply for the regular workers while at the same time, increasing demand for those freely available spaces. Does this help the available supply for the regular workers? Of course not. The supply of parking spaces for them hasn't increased (this is like the current situation for affordable housing; there's only so much available within the city. And between rising property values and homeowners that are fixing up their current properties, more properties are moving out of "affordable" and into more exclusive markets). So management decides to do something about it. They authorize redeveloping the small area where the dumpsters are right next to the building (for an additional 3 places) but they're all reserved for the CxOs, as they are ultra-swanky, shaded, cars-washed-by-virgins spots. The spaces are only for the CxOs and no one else. So here's M1EK's premise; the 3 reserved spots that used to be occupied by the CxOs have now been freed up for additional managers (the 1-for-1 property tradeoff) but did building the addtional spaces help the rank-and-file employees by increasing their supply? No. The old parking spaces remained reserved for management. So, in the next 3 quarters it takes to fill the old reserved spots with new managers, my department has now added 12 more people to the first-come, first-served spaces further decreasing the available supply where they can park. The only thing that will help relieve the demand for the rank-and-file employees is new spaces where they can park or new spaces in their segment. So seeing that their available parking spaces have now shrunk to about 140, the rank-and-file employees submit a protest to the City Council who sympathize and decide to redevelop the field adjacent to the building (cutting down the landmark 300+ year old oak tree, mind you [look for "Rainey" on the page]) and put in an additional 50 parking spaces. But when completed, they decide that the spaces are only for City Council and management and, additionally, they deem that 40% of the spaces are only to be used by their families. No one else can park there which leaves most of the spaces unused most of the time (this is downtown development and the 2nd home thing which I'll get to below). Is this unfair to the rank-and-file employees who are still fighting over the ever decreasing spaces? You bet. Are they upset? Beyond belief. Can they do anything about it? Absolutely not. So is this experiment wholly accurate? Of course not. In real life, the City Council would open up the new parking to tolling... ;) Actually, the only thing that is really left out of the experiment is some influx of "affordable" housing but it will be in the less desirable areas of Austin (in the situation above, those spaces would be located blocks away from the building) and since M1EK's assertion is that building downtown luxury condos will increase affordability for the average citizen, the model above is accurate enough to get the point across. But, model aside, let's try and determine some real numbers. The Numbers (with links!) Using M1EK's example that seemingly the only people looking to move into these downtown condos already live in Austin (a 1-for-1 property tradeoff and I know he's generalizing...), one can make the argument that demand for these downtown luxury condos will be limited to a very small percentage of the current Austin population (the current total Austin population is 690,252) and thus, will not have the effect of lowering the prices of the individual units downtown or the surrounding areas. A quick run of the numbers shows of those that can afford an average downtown property cost of over $300k, based on the 29% rule, the target buyer must be making at a minimum, $65k/yr and would probably have to make a bit more than that for credit card bills, recreational and living expenses, etc. The median income in Austin is $68k/yr so, working in *very* general numbers, we'll say 50% of the current residents in Austin that could afford the property and of those, another smaller percentage would actually be looking to move (even though this logic is a bit flawed -- median income does not evenly correlate to population -- but this is just for fun). I'll just pull a number out of the air here as I haven't been able to find this number anywhere so I'll be generous and say that 2% of the Austin population are looking to move of the 50% that can afford it . So, we have a maximum of 12,580 people in Austin who could currently afford the minimally priced condos and who are currently looking to move (not all of these properties downtown will be available at the $300k level). Now, based on national statistics, 40% of all housing transactions last year were for 2nd homes. So let's remove from the equation 40% of the available downtown properties because these people already have primary residences somewhere else and generally speaking, the properties won't be available to those looking to move from the periphery (except maybe as rentals at some point but couldn't find a figure for how many 2nd homes become rental properties). The Council wants 20,000 eventual downtown residents so let's average 2.4 people per residency, we need about 8,400 individual properties minus the 40% that are second homes which leaves 3,360 total residential units available on the market. So, this year, we now have 12,580 current Austin residents looking to move into the eventual 3,360 average priced properties downtown. And this figure does not take into account those people who don't currently live in Austin and are moving down here (based on census data, Austin's population grew 10,000 per year over the last 3, so we can add roughly another 5,000 additional home seekers per year divided by 50% who can afford it = 2,500). So until developers build at least 15,000 individual residences downtown and then add 2,500 additional units per year, the demand for those properties will not go down and the prices will remain where they are and will probably creep up over time. So where do those people go who want to live downtown but the demand for that prime property has forced them to look elsewhere? They go into the adjoining neighborhoods, like Clarksville and Barton Hills, and drive up the price of the current properties due to the demand and not down by supply as M1EK surmises. Generally speaking, Austin is being influxed with new residents from places other than Austin. These residents, usually coming from places that have higher property prices, don't balk at a $300k downtown condo like some of us long-time Austin residents. I think we'll find that most people who are moving downtown into the luxury condos will generally fall into three groups:
- Professionals from outside of Austin who don't currently own any Austin property
- Professionals that bought the condo for a 2nd property (I would argue that this figure will probably be a bit higher than the national average in this case as we're primarily talking about condominiums in a now cosmopolitan and hip city, further increasing the demand)
- M1EK's scenario of upwardly mobile Austin residents
"Yes, M1EK, I did *a lot* of research into your property value claim (the same lame "my Clarksville condo" rant I've now seen on no less than 2 other blogs). Over the last few weeks I've read numerous density articles, affordable housing scenarios, case studies (Portland, Seattle and New York), blogs and comment threads and even the city's development plans (like the City Auditors, I wasn't impressed). I even went so far to talk to 2 MBA's (one in real estate). I couldn't find a *single* sentence or person that supported your "trickle down" assertion (building luxury condos leads to increased supply which leads to more affordable housing citywide). The overwhelming theme I gleaned from those articles and my research is that there is no direct link between building downtown luxury condos and the lowering of property values from previously higher priced properties in outlying areas. In fact, I saw more examples of the opposite; the building of luxury condos downtown increased the housing prices nearby and displaced traditional residential neighborhoods. As shown by this article and from here:What I see happening downtown is an economic segmentation of the super-haves (i.e. - Congress, 2nd street and the new high-rises), the haves (like M1EK and myself; our outlying areas) and the have-nots (the East Austinites that are soon going to be priced out of their neighborhoods through higher property taxes and moved out through infrastructure placement and building). I believe this is counter to Austin's traditional blending of cultures and income levels throughout their neighborhoods. So in the anecdotal spirit M1EK is fond of, I'll use where I live as an example of the "traditional" neighborhood. I live in a duplex in Barton Hills. The surrounding houses in this neighborhood roughly start in the $300's and go up. I couldn't afford to live in this neighborhood otherwise (I live on a city worker salary, for pete's sake!) but because there is "worker affordable" housing in this area, I can enjoy the benefits of living in this neighborhood (the key one being I can ride my mountain bike to work safely on the greenbelt :). What's key to greater affordablity is a supply of housing within the segments that people can generally afford. That's why I've been posting that we need more "affordable housing," and not just addtional inventory in the luxury segment. While I'm at it, I guess I should define what I mean by "affordable housing." When I talk about "affordable housing," I'm not talking about the traditional political definition of the term. I'm not talking about putting government subsidized housing on 2nd street or the like. What I am talking about is "worker affordable housing," which is generally set at about 70% median income (roughly $1,400/mo rent) versus "affordable housing" which is 50% and below median income (about $700/mo and below) **. As far as my research has been able to produce, there's only one property being built downtown that could fall into that "worker affordable housing" range as their rentals will be starting at $1,400/mo: Red River Flats. So for me, a long time (11 yrs) Austin resident, it concerns me to see the current pattern of development that excludes the types of developments which will lead to the "unblending" of what I feel is one of the defining characteristics of Austin. Economic segmentation is how places like Dallas developed and I have a bit of firsthand knowledge there as well. I lived in the McKinney Ave. area just before the big redevelopment boom and moved to Austin about 3/4 of the way through it's completed development. I saw the moderately priced area where I lived soar to unaffordable in a mere few years which benefitted the property owners (like my father who owned a few of those condos) but didn't do anything to bring middle-income families to the area (seemingly, the "rocket shot" of property prices hit just after the completion of the driving range. Go figure...). I saw the residents of the low income side (east of Central) displaced in fairly short order as the property values skyrocketed and they were left looking for affordable housing elsewhere. (But give credit where it's due... At least Dallas had the foresight to put in a good mass transit system so at least for those that can't afford to live downtown but need to work there, an inexpensive and efficient people moving system is in place.) In my opinion, Austin needs to stop this segmentation or we risk losing what makes this city so great. We can do this by building (and the City supporting) affordable housing initiatives (like inclusionary zoning) and the building of more "worker affordable" housing like Red River Flats downtown. This really will bring diversity to downtown and will speed the migration of middle-income families to the downtown and surrounding areas. Finally, I see gentrification being the larger threat to long-term property values and see little merit to M1EK's "trickle down" scenario to stem the upward trending property values. We currently have a very developer friendly City Council and Mayor, seemingly offering tax breaks and incentives to any of their PAC supporters that come within breathing distance (see the above mentioned post for some details). I suppose time will tell if gentrification is truly going on downtown as the growth starts to spread eastward but the seeds certainly seem to have been planted. I'm all in support of development downtown and certainly support NuPro's ideas for new urbanization (I hope she'll post about the importance of bringing middle-income families to downtown) but I feel there must be greater support from our City Council to provide affordable as well as luxury housing downtown with a coherent development plan if they truly want to meet their goal of 20,000 people living downtown while preserving cultural and economic diversity that is so much a part of Austin."Gentrification usually increases the property value of an area. This is a positive development for city officials (by raising tax revenue, which is often dependent on property values), the middle class, as well as existing resident owner-occupiers. Unfortunately this same rise in property value can be devastating to those in lower income groups, when children of such residents find they can no longer afford to live in certain neighborhoods. As a result, there tend to be very strongly opposed views on gentrification, with some seeing it leading to healthier, more vibrant cities, and others seeing it as destroying poor communities. Both views would seem to be correct."
"Well, his first assertion is true - the markets are 'segmented', but individual complexes can, and do, migrate from luxury to moderate segments."So the premise I took in my post may not be what's going on but at least it's not a "complete" misunderstanding of economics. Finally, someone else did take the time to look into the issue and sent me a great link (h/t Jen). This link to the National Housing Council shows how much money it takes to "survive" in various cities using 63 jobs as a metric. In Austin, just to "get by," it takes $61,840 / yr with a median priced home at $195,000. Looking at the 5 pre-selected jobs (School Teacher, Nurse, Police Officer, Retail Sales Rep and Janitor), none of them make enough money to "afford" to live in Austin (which goes along with this editorial that shows that most Austin police officers and fire fighters live outside of Austin). The type of "affordable housing" I'm talking about would allow people in these jobs to live in the city where they serve. That just seems like the right thing to do. Update II: Whilst searching my history for the lost "worker affordable housing" classification link, I found this great comment attached to this article:
[...] As someone once said, the notion that all growth is intrinsically good is the mindset of a cancer cell.
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Re:Trickle down?
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. :)
Ed. Note - Thanks for the catch! I've updated the entry with your correction. Thanks for reading and leaving your comment!
New Feature: Friday Bike Trail Blogging
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Re:New Feature: Friday Bike Trail Blogging
Well, it's not a Austin blogger post without a gratuitous Dallas slam... BTW, I'm sitting in my office in downtown Dallas after commuting by bike from my home (8 miles) on the Dallas MUTs (I've never, ever, heard them called 'nature trails').
Re:New Feature: Friday Bike Trail Blogging
Hehe, well, I lived in Dallas for 17 years and did *a lot* of bicycle commuting / riding back in the early to mid 90's (for the most part, I rode from Turtle Creek / McKinney Ave <-> Coit and Arapaho 6 days a week for nearly 5 years). I was nothing but a roadie at the time, looking down on those poor schmucks who were mountain biking (that's one thing I really didn't like about Dallas; too much emphasis on "what you had" and not on "how you rode," but that might have changed since then (I've been in Austin for the last 11yrs but it's even pretty clique-ish here)). At the time, I was averaging nearly 200 miles a week in commuting / training (I was living the dream of qualifying for the Atlanta games in '96... :) and most of that on the busy Dallas streets (primarily Oak Lawn / Preston) and the training was primarily with the guys from Richardson Bike Mart and a few times with the Chili's pro team around White Rock and out on the northern Plano roads.
I really didn't ride mountain bikes back then and I would agree with you that they really aren't "nature trails" but they were some of the few "trails" that were separated from traffic which made it safer for the cyclists. I'm not slamming Dallas; just comparing what I saw there to what is available down here. There are some truly great trails here in "downtown" Austin and even better trails scattered throughout the city and outlying areas.
Currently, here in Austin, there's been a lot of debate about how we Austinites would like our city to develop with the crushing growth that has been happening. A lot of us would like to keep the greenspaces and trails as we feel that they are a defining characteristic of this city. Otherwise, Austin really does run the risk of becoming a city much like Dallas or Houston (car friendly and a lot of sprawl). If a Starbuck's drive-thru at a strip mall is my cup of tea, I would certainly move to Plano/Dallas as it's already there. I don't need Austin to follow that path. That's not what I love about this city. In fact, it's the relative lack of those "amenities" that I like (but don't get me wrong; there's a Starbuck's about 2 miles from where I sit typing this... Next to a pool hall of all places... :)
And take heart in knowing this isn't your typical Austin blogger Dallas slam. I've got 17 years of experience to base it on! Thanks for leaving your comment!
Trickle Down Follow-up...
"The vehicle that M1EK is using for this argument is now called supply-side economics. In his example, by adding more supply to the market, no matter what the price, it will eventually bring lower prices long-term to the whole market, not just the luxury segment where the current supply is being increased. While that may be true in general terms, I'll put forth that the supply isn't the greatest determining factor in this "affordable housing" scenario; I feel the demand in this limited market segment will be the more important quality as that will drive up the existing outlying property prices and will not, as M1EK asserts, increase affordability for the general public. Below, I hope to show that while in theory, M1EK's premise is generally correct for most things, there's not enough places (or plans) to build the sheer number of condominiums needed to make his assertion true in this case."I then followed that thesis with a few examples (a parking lot and a Ferrari / Camry metaphor) and links to authoritative sources to explain how I got there. So, a few days ago, a reader emails me the following article from the Austin Business Journal (h/t Clayton) in which Austin's current downtown city planner, Michael Knox, makes a statement that nearly perfectly matches what I wrote in my post:
"But with so little space left, demand may end up forcing development into adjoining areas, perhaps along Shoal Creek on the west side or along Waller Creek to the east. "That's going to cause a lot of friction when you start talking to these abutting neighborhoods," he says."Now I know that Mr. Knox is talking about demand for developable property and not the demand for actual completed residential units but the demand for land is complimentary to and actually bolsters my thesis by bringing yet another "X-factor" to the housing supply market that will increase prices. Currently, the Mayor and Council want to move 20,000 more people into the downtown area over the next few years. But as I mentioned in my post, there aren't currently enough places for these people to move so demand will force these people into looking for the most desirable property left on the market. If these more affluent buyers don't want to live in the "Hills" on the periphery of town or out at the lake (as they are looking for properties $300k+), they will undoubtably will be looking in the adjoining neighborhoods (Barton Hills, Clarksville, etc), which increases the demand for the available homes on the market. From the Austin Real Estate Blog (my emphasis):
Austin Residential Home Sales continue to be very strong. The number of homes sold increased 21% from 2,462 last June to 2,980 June 2006. At the same time, the number of active listings fell 2% from 8,637 to 8,477. The number of Pending Sales in June is up 31% from a year ago, from 2,506 to 3,286. This continued increase in demand along with reduced inventory is driving healthy value appreciation despite rising interest rates. Average Sales Price is up 12% from a year ago, from $219,196 in June 2005 to $245,655 June 2006.Now, maybe M1EK can see the "depressing influence on the rent I can get for it [his Clarksville condo] thanks to the indirect influence of those downtown units," but I'm not seeing that "trickle down" effect from those downtown condos in these numbers... Maybe I'm not squinting hard enough... Now add the "X-factor" of developers looking to "spill out" into the peripheral neighborhoods where they will be competing for the more affordable tracts of land (with homes or not already on them) as well as the resulting rise in property values as the downtown luxury units are completed. This scenario is much like the Turtle Creek area of Dallas (hehe, where I also lived in an 24-story condo tower for awhile. But I'll save those stories for another time [I can hear that sigh of relief from here...] :) In Mr. Knox's statement about needing more residential space downtown, he said there wasn't going to be enough property that could be developed to house all those future residents and the demand for that property would have to spread into the outlying neighborhoods to accomodate the Mayor's goal. So, in that scenario, we now have 2 sources of demand in the adjoining neighborhoods:
Median Sales Price is up 8% from a year ago from $168,500 to $182,000 (a new Austin record high)
note: the graph below has the wrong median amount on the chart, it’s $168,500 not $165,800.
- demand from developers for the limited developable land in the adjoining neighborhoods (see quote above)
- the influx of residents (both from Austin and recently arrived) that would like to live downtown but there are no units available downtown because of the high demand
"It's clear that demand is high for units. One need only look at projects like The Shore, a 22-story residential tower that recently broke ground with 80 percent of its units already committed. And more than a dozen other projects are already in the works."
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Re:Trickle Down Follow-up...
While some of your points are valid, I'm finding you're argument far too complicated and a bit short-sighted. You're wanting to see the effects of increased housing now, while M1EK is looking at this on a 10, 20, 30 year time line. The reason that you're not seeing a trickle down effect is that developers have only started building large numbers of condo properties in the past few years. Prices are high (downtown and in adjoining areas) because demand outpaces supply. If supply can come closer to meeting demand, a condo built in 2006 will more affordable than a condo built in 2026.
I don't think M1EK was asserting that downtown housing will lower prices across the city, just the core. Prices are high in the urban core because supply doesn't meet demand. The only way to get prices to go down is to attempt to increase supply in the core. And we're talking about mitigating high housing prices here. Land in central Austin is more expensive than land in the suburbs. Housing will always be more expensive downtown and in adjacent neighborhoods. But housing costs will be even higher if we don't build downtown.
Re:Trickle Down Follow-up...
Actually, M1EK was the one that framed this debate in both the comments he left on your site and the comments he left on mine (the key being the one phrase I highlighted in both of my posts and from your blog):
<blockquote>
<i>"I own a moderate condo unit near (not in) downtown and I can tell you that it's fairly easy to observe a depressing influence on the rent I can get for it thanks to the indirect influence of those downtown units."</i>
</blockquote>
The comments he left on my blog are:
<blockquote>
<i>"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)."</i>
</blockquote>
and
<blockquote>
<i>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>
</blockquote>
All of these quotes are referencing today's market, not 10 or 20 years down the road. I agree with both of you that we need to build and get some density downtown. I also agree with you both that eventually, over time, adding more housing stock will bring affordability down over the long term (probably through some economic bust I would think). I took issue with M1EK because he wrote, in no less than 3 times on 2 different blogs, that he was seeing direct influences on *today's* market from the currently built / building / planned housing stock. I was ok with not responding to his comments on my blog but when I saw him make the exact same comments on your blog with the "<i>fairly easy to observe</i>" qualifier, I had to say something.
And it's a bit out of context that I'm looking for affordability in the market today (you can blame me for that as I really didn't make the distinction well in the 2 posts). Yes, I would like to see some properties built that would promote middle-class ownership (after all, if I really wanted to live with just rich, white guys, why did I move from McKinney Ave. in Dallas? Rich, white guys trundling along in their BMWs and Ferraris at each and every intersection (although, truth be told and in the spirit of full disclosure, by that measure because I drive a Jaguar, I guess I could be considered part of the problem... :). I'm really not worried about housing prices in the near term (even though in these last few posts I spent quite a bit of time trying to debunk a very loud and sometimes obnoxious compatriot). I am really more concerned with losing the cultural and economic diversity of this town. So if we can promote that diversity by adding a few units in the central core at about $1400/mo, I think we should do it for the overall health of the city. If we could do it your way, so to speak, I'm even more in support of it... :)
Just please remember that what started this was a comment by someone which I found interesting. I knew he would take it the wrong way so I really tried to mind my P's and Q's and follow everything I put out there with the facts as best I could find them. For me, my style of writing has always been a bit on the conversational side so sometimes my main points might get a bit lost (anyway, isn't that what blogging is about?) but I still stand behind the posts as my best attempt to explain a very complex situation.
Thanks for reading and leaving your comment. I'm an avid reader of your blog as well but I've been keeping off the comment button there. I don't want to inflame a certain somebody again until it's justified... :)
<b>Update:</b> Hehe, go figure. Updating a comment! Geez, I'm pathetic... Anyway, I think that maybe M1EK has been mixing his message a bit since this topic first started which might be the reason why there's a bit of confusion when speaking about market time frames. I went back and noticed that he added to his post that was trackbacked from mine (without an appropriate update attribution, mind you), so while the conversation has been evolving, it very well could be that he started referencing today's market and then started making more comments about future markets while I stayed on just today's market frame. I'm not planning on making any more posts about this subject so maybe M1EK and I can just move on to the next debate topic (or not as I don't think either one of us reads the other's blog anymore). Thanks again for reading!
Friday (Well, Saturday...) Bike Trail Blogging Week #2
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Saturday Bike Trail Blogging Week #3
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Thoughts on the new design standards...
Rather than exasperating chic development and steep prices, McCracken contends the ordinance strives to balance density goals with affordability. By focusing growth along major corridors and away from neighborhoods, the hope is to keep taxes affordable on single-family homes. But, "affordability doesn't happen organically," McCracken says. "It is untrue that the market produces affordability due to supply." Therefore, 10% of VMU rental properties must be set at 80% median family income. Ten percent might not sound like much, but McCracken says the neighbors can set lower MFI if they wish, and the 10% reserve can double with city assistance, if the developer desires. "As density comes," he says, "we don't want to turn into San Francisco – a great urban environment for rich people."In this one quote, Council Member McCracken has addressed the core issues I've been posting about over the last few months. First off, he upholds my view that affordability will not come through supply alone; there must be other ways to that goal and it appears, from the design standards, they want to mandate a way through ordinance. He also seems to be echoing my fears of losing the economic and hence, the cultural diversity of Austin through gentrification and thus, has tried to promote some sort of control mechanism through the new standards (using mandated median income levels and neighborhood association input). As an example, the design standards, starting on page 72 under Section E. Affordability Requirements for the new VMUs (Vertical Mixed Use), states the following (I'm quoting the full section in its entirety):
My only problem with this part of the standards is I would like to see a greater percentage of units offered at a lower percentage of median income. Currently for homeowners, the standard sets 5% of units at 80% of median income and another 5% of units at 100% median income. I would like to see Austin follow some other cities suggestions and offer 10% at 70% and maybe an additional 5% at 80-100% median income. Anything we can do to offer incentives to middle-class ownership will only benefit Austin's cultural diversity otherwise we really do run the risk of becoming what Council Member McCracken states -- "a great urban environment for rich people." I don't think that's what most Austinites want. Well, I should clarify. That's not what most of us Southies want... :-) The only other thing that really stuck out at me came from section 2.7 Private Common Space and Pedestrian Amenities. I won't quote the entire section (I've linked to the document below) but here's the section I found interesting:
- Affordability Requirements
To be eligible for the dimensional standards exemptions in subsection D.2. above, the residential units in a VMU building shall meet the following requirements.
- Affordability Requirements for Owner-Occupied Units
- Five percent of the residential units in the VMU building shall be reserved in perpetuity for ownership and occupancy by residents earning 80 percent of the median family income.
- In addition, five percent of the residential units in the VMU building shall be reserved in perpetuity for ownership and occupancy by residents earning 100 percent of the median family income.
- The homeowner association fees for the owner- occupied affordable units shall be subsidized by the entire membership of the homeowner association, pursuant to procedures and criteria established by the Director.
- Affordability Requirements for Rental Units
- Ten percent of the residential units in the VMU building shall be reserved for a minimum of 40 years for rental by residents earning 80 percent of the median family income.
- As part of the one-time opt-in/opt-out process described in Section 4.3.5. below, a neighborhood association may request that some or all of the affordable rental units be available for renters earning a lower percentage of the median family income, to as low as 60 percent of the median family income. VMU projects that file zoning or site plan applications prior to August 9, 2006, will not be subject to this neighborhood affordability customization; and instead ten percent of the residential units in the VMU building shall be reserved for a minimum of 40 years for rental by residents earning 80 percent of the median family income.
- The city may elect to subsidize an additional ten percent of the residential units in the building for rental purposes for residents at any level of affordability pursuant to criteria and procedures established by the Director.
- Fee for Upper-Level Nonresidential Space The developers of VMU buildings that contain non- residential uses above the ground-floor shall pay a fee as set by the City Council for all climate- controlled nonresidential space above the ground floor.
- Parkland Dedication Fee VMU buildings not located on greenfield sites that meet the affordability standards of this Section 4.3.3.E. are exempt from the parkland dedication requirements in Chapter 25-4, Article 3, Division 5.
2.7. PRIVATE COMMON OPEN SPACE AND PEDESTRIAN AMENITIES22 [...] 2.7.2. ApplicabilityPersonally, I would like to see that final section dropped as I would rather see public amenities instead of a payment to a slush fund to the City. This exemption only applies to the "urban roadways boundary" (which is pretty much all of the urban core of Austin) so I don't know how many 5 acre sites are still left down here but I would much rather see places where people can gather then have the space devoted to a few extra sq. ft. of building or parking. Maybe the "exemption" should be a smaller percentage of the site (maybe 1% instead of 2% devoted) but I really like the idea of the city promoting open, green spaces rather than a pavement exemption. I'll be honest, there could be reasons for this payment that I'm not aware of but based on this document, I don't see how making a payment to the City helps with livability. It just seems to be a convenient loophole for developers to not add that enhancing green space to their development. But overall, the document reads sensible and I feel this is a plan that most of the Austin residents can settle on. To be completely honest, I was *really* looking for the developer loopholes in this document and I was quite surprised by the relative lack of them. I need to go back over the document with that fine-tooth comb I mentioned earlier but in the meantime, I say "Well Done!" to those involved on trying to give Austin a coherent development direction.
The following table summarizes the applicability of this section:2.7.3. Standards
Standard Applies if the Principal Street is: Applies to the Following: 2.7: Private Common Open Space and Pedestrian Amenities All roadway types All site plans five acres in size or larger [...] F. Fee In Lieu
- Amenity Required
All development subject to this section shall devote a minimum of two percent of the net site area to one of the following types of private common open space or pedestrian amenities:
- A natural and undisturbed private common open space, for use of the residents, employees, and visitors to the development.
- A landscape area other than one required by Subchapter C, Article 9 (Landscaping), provided such landscaped area has a minimum depth and width of 10 feet and a minimum total area of 650 square feet. The area shall include pedestrian amenities to support these places as gathering areas.
- A playground, patio, or plaza with outdoor seating areas, provided the playground, patio, or plaza has a minimum depth and width of ten feet and a minimum total area of 300 square feet. The area shall include pedestrian amenities to support these places as gathering areas.
- A combination of the above-listed amenities. (See Figure 42.)
Instead of providing private common open space or pedestrian amenities as required in this section, the developer of a property located within the urban roadways boundary (as defined in Article 5 of this Subchapter) may request approval to deposit with the city a nonrefundable cash payment, based on a formula established by the council. The Director shall review the request and accept or deny the request no later than 15 days following its receipt.
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Re:Thoughts on the new design standards...
If a person buys a 'low cost' unit, does that obligate the low income buyer to only sell to another low income person?
Re:Thoughts on the new design standards...
Five percent of the residential units in the VMU building shall be reserved in perpetuity for ownership and occupancy by residents earning 80 percent of the median family income.
I think it would be the developers/owners of the development that would be responsible for the vetting of the prospective buyers as this part of the proposed ordinance is part of the "agreement" the developers have with the city before they broke ground on their new development. I can see where the owners of the property can comply in 2 ways with the ordinance:
- By demarcating units that will always be at the 80% MFI or
- "Floating" the 5% of the total units around the development when they become available.
Does this somewhat screw the homeowner? Well, yes and no. I'm not sure about the details (and I promise I'll look into this but if someone else who already knows could leave a comment...) but one way to approach it would be as an "administrative fee" assessed by the development owner.
- The developer would "deem" certain units "low income" and would sell to the qualifying buyer. At closing as part of the contract, the qualified buyer agrees to pay an "administrative fee" to the developer to make up for any positive offset in property value if the unit sells for more than the appraised value of the unit at the time of the original purchase (after all, the homeowner was originally given a price discount from the developer and it still allows the homeowner to get back any equity built up in the property).
- When the homeowner moves out, they sell the unit on the market and pay the "fee" to the developer if the property sold for more than the orginal contract value
- The developer puts that unit back up on the market for another 80% qualifying individual
In that scenario, the homeowner is having to pay an eventual penalty if the property goes up in price but they are also receiving the benefit of living in a space that they would not normally be able to afford. To some, that would probably be a good tradeoff.
I'm sure there are other ways to handle this (subsidies, etc) but I would think the ordinance wouldn't mandate a way to reimburse developers/homeowners. Some developers might just look at the dedicated units at MFI as just the price of doing business in Austin and write it off as just another tax.
What Austin has going in its favor is its booming development. Developers are falling all over themselves trying to "get in" the urban core so dedicating such a small number of units (in just VMUs, mind you) shouldn't cause any negative economic impact. Plus, it sends the positive message that Austin really does care about economic and cultural diversity in its urban core. I'll send a message to a few people I know in planning to see if I can get a definitive answer on this for you.
Re:Thoughts on the new design standards...
And how would you like to be the kid growing up in the designated "poor family house?"
Re:Thoughts on the new design standards...
I hope you are being facetious here... :-) If not, I'll give you a personal example...
At one point, when I was living back in Dallas, a HUD property came up in one of the swankier condo towers on Turtle Creek. My Dad put in a bid for it and they accepted the bid so my Dad bought the place and we all "moved on up..." It was on the 18th floor of a <a href=http://maps.google.com/maps?f=q&hl=en&q=turtle+creek,+dallas,+tx&ie=UTF8&ll=32.815294,-96.799625&spn=0.004076,0.007843&t=h&om=1>24 story building</a> (it's the one in the center of the image) with a gorgeous, due south view of Downtown Dallas with Turtle Creek snaking right along side the building (well, across the street... :). Inside, the unit was just like all the others with the same square footage, plan layouts and amenties. The doorman even opened the door for us just like everyone else. We participated in all the building festivities, took part in the homeowner assn. meetings, walked our dogs and went to every Christmas party just like all the other residents. So, in short, <b>I was</b> that kid growing up in the designated "poor family house" and never once did anyone say anything. In fact, I would go so far as to say that:
<ol type=1>
<li>Nobody knew that the unit was a "low income" property
<li>And if they did know, they obviously didn't give a rat's ass
</ol>
Even though my family was a solidly middle-class family, because of the affordable housing option, we were able to live in a great downtown unit in the middle of one of the higher priced (well, at that time) areas of Dallas.
That's why I'm so passionate about middle-income families being able to share the same living areas as the "privileged" families. I got to share the same downtown living area as some of the wealthier people in Dallas. Did I get any benefit from it? Sure. I got to live in a really nice building in a safe neighborhood surrounded by some of the most expensive property in Dallas (Highland Park is just north of there) and some great green spaces. I got to go to some of the best restaurants (The Mansion on Turtle Creek) and pubs (the Mucky Duck) in the downtown Dallas area, all within walking distance. I also got to meet some really nice people (the neighbors) and I hope that they would say the same thing about us (our middle-class Scottish-English heritage family should have been good for a few laughs around the holidays!)
So if you're trying to say that some kid will be picked on by the other residents... Geez. Get over it and get a life already... I can't believe that people can be that small-minded. Now, if you're rich enough to afford living in one of these places without the assistance, great! Go back to your country club and stop slummin' on my solidly middle-class blog!
The City's Wireless Mesh Explained, Part one...
Re:The City's Wireless Mesh Explained, Part one...
Scott -
Excellent article... I look forward to reading Part 2.
I must confess I am guilty of perpetuating the government-provided wireless access hype. As Chair of the city's Community Technology and Telecommunications Commission, I've been harping on council to consider how the wireless mesh could be used for economic development purposes, primarily as a resource for existing small businesses that reside under the umbrella.
Looks like that is a labor of futility...
However, I have also preached of expanding the wireless mesh to serve portions of the community in need and combat "digital divide" tendencies. As you pointed out, it is an ongoing debate.
Current federal legislation being hammered out often lacks any build-out requirements. That's troubling because it would essentially legalize cherry-picking of markets. If build-out requirements are absent from the legislation that passes, then it would behoove the city to expand the wireless mesh network in these areas (grow the technological infrastructure).
So What Am I Afraid Of?
"No plan can prevent a stupid person from doing the wrong thing in the wrong place at the wrong time - but a good plan should keep a concentration from forming." -- Charles E. WilsonI caught the tail end of a segment of the locally produced PBS show, Downtown on KLRU (episode #207) a few weekends back. The segment involved following a few local bands around in their quest for their big break and how instrumental downtown and it's clubs are for them and their future success. They showed a few bands playing at Cedar Street and the like but when they showed the bands sans gigs, they were shown in that traditional definition of an Austin SoCo backyard: huddled on top of the wooden picnic table with hubcaps hanging on the fence; dogs barking and yelping in the background; live oak trees in the immediate distance; the kitsch of that traditional South Austin residence and the associated lifestyle that goes with it (I think that segment was filmed at Rock N' Roll Rentals on Lamar and Oltorf). For me, the implication was "For all the chicness and swank of the downtown clubs, the music is sewn and grown in the old traditions of the Austin community." It seemed the marketable aspect of the piece was not the venues where those bands played but where they and the community lived to produce the music that defines Austin. I think nothing quite sums up this feeling better than the article that's linked to at the Armadillo World Headquarters info page or the quote on the home page which states:
"...The Armadillo is more than just a local symbol. It is the center of the music industry in Texas, the premiere showcase for the rest of the nation to look at Texas talent and the spot where Texas audiences get to see national acts at their best… In the vision of Texas we want to communicate, the nine-banded Armadillo is more important than John Connally or the oil industry. It's a vision the rest of the country hasn't seen yet."That vision, which is still shared by many current and former Austin residents, is to them the defining characteristic of Austin. It's the reason why they decided to take up residence here and to give what they have creatively to the Austin commons. That vision, though not unique in Texas, certainly had a flavor that was different from anywhere else and what set Austin apart from the other music hubs like Seattle and Nashville. So when I read that another Austin "iconic" place is going away for another multi-story development, I again start to worry if Austin is losing another small piece of its collective soul. Like the photograph above of U2 in the Shady Grove RV Park back in '82, would that photograph be as near as interesting if there were two 6-story condo buildings in the background? And when you take into account the targeted demographics of the projected residents of the new buildings, that same photograph of U2 in late 2008 would have a solid line of BMW's, SUV's and assorted yupster toys trundling about in the background. Kinda changes the character, or one might say, the implied meaning of the art work. And I guess that's what I'm afraid of. With all this generic, cookie-cutter development and architecture that's being green lighted in Austin lately, more of Austin's character is being assimilated into a homogenized mix of big box retailers and pseudo-80's-ish, Trammell Crow-like mini-towers (and don't forget their associated strip malls. For an example, just go see the giant strip mall on MoPac next to the Pickle...) Soon enough, Austin will not be as easily distinguished from other geographic locations which I think bothers many Austin residents (see the comments on the above article at the Statesman). After all, the Arboretum area is a spitting image of the NorthPark area of Dallas. Downtown development, much like anywhere else urban, tends to blur together unless you have niches like 6th street (or in Dallas' case, the West End and Deep Ellum). 2nd Street and the Town Lake area are quickly becoming Austin's McKinney Avenue / Turtle Creek equivalent. Now my question here, I guess, is "Does all development have to be the same as everywhere else?" "Can we not as residents of Austin, ask for a more regional interpretation of these developments to better fit into our community and help preserve our sense of place?" I know that our coming design standards attempt to give an Austin "brand" to the new development but it seems so limited in scope that most of this development going on only falls under the broader zoning plan in which most of these developers seem to be bypassing anyway by seeking major variances seemingly on every development. Now, I've been quite clear in the past that I'm not anti-development. I think there are many places in Austin where development is absolutely needed and should be promoted by our Council and their supporters. But I've consistently drawn the line on a few things: 1) that neighborhood associations and local "icons" as deemed by most residents of Austin are taken into account *before* development starts (I define an icon as a place that most Austinites feel reflects what they believe to be Austin) and 2) new development downtown should have to promote some "affordability" before being green lighted. This new development being proposed on Barton Springs fits neither of these statements for me. For instance, I like to use this little scenario to look at any proposed development to weigh it's "community" benefits (to help define number 1 above). Your parents, who live in East Oshkosh and have never been to Texas, much less Austin, come down for a visit. You have one day to show them what Austin is all about and what makes it different from anywhere else in Texas before they head to Dallas and then Houston. Where do you take them? What places do you think define Austin and are different from Dallas or Houston? Now, apply that filter to any of the places now under consideration for development. Would you take your parents to Shady Grove for a frito pie or two? I know I would as I've done it numerous times in the past. Now, get rid of the "grove" in "Shady Grove" and replace it with two 8-story condominium complexes ("Shady Condo Towers?"). Kinda changes the character or the implied meaning of the place, doesn't it? It's kinda like replacing the trees and Airstreams in the U2 picture above with a generic condo tower and BMW's. I mean, if you wanted to dine amongst tall, urban buildings, there are plenty of places on 2nd street to do that. So, to me, that development doesn't contribute to that "Austin flavor" or community definition that most Austinites feel defines their city. It's just another condo development in that respect and in fact, Austin loses a bit of its character in the exchange. Ok, so now let's look at the second of my development "qualifications." Does this new development benefit affordability in the immediate area? With a target demographic of $60k - $80k a year, at the low end (of which there will be only 5-10% of the stock that will qualify based on earlier developments and the new design standards), it doesn't seem like it will encourage families of different economic levels to the neighborhood. But it's perfectly targeted at the yupster level though, so the neighborhood's SUV population will be sure to rise. So are yupsters and SUV's representative of or define Austin? Hate to say it but I don't think so (and before some of you, and you know who you are, go off in your own mind and since you don't leave comments, think that I have something against yupsters now, take note. I happen to be in the yupster demo group and although I don't drive a SUV, I do drive a "European sports sedan." So because I have membership in that group, it should qualify me enough to comment on that demographic...) So it comes down to the title of this post for me... What am I afraid of? I've lived in the Barton Hills neighborhood for nearly 10 years now and I'm afraid that the new development will take a piece of Austin that won't easily be replaced. And that piece will be removed without giving back to the community something equally as valuable (by the way, I find it interesting that the first thing these developers do is throw out the "new path to the greenbelt" bone to the neighborhoods when they request these variances. How well will that meme float when all the development changes the greenbelt so much that there won't be much "green" left in the "belt" and they're just paved paths to a concrete canyon surrounding Town Lake?) Now, I don't know where my NA stands on this (I don't really participate much as I rent a duplex here) but I find myself against this current proposal. What I would be for is a development that would fit in with the rest of that area (much like the condos/townhomes directly across the street, nestled against the hill and which blend right in and don't drastically change the character). I'd support a smaller development, something only as tall or just above as the roof of Flipnotics and with as many trees left as possible. I feel that the current proposal just wouldn't fit in and would dramatically change the Austin "flavor" of that area too much. So, to me, it comes down to what we are implicitly saying about ourselves when we greenlight projects like this. Are we all closet Dallasites or Houstonians where cookie-cutter architecture and planning decisions like this truly reflect our collective character? Are we truly willing to throw away these small jewels of our history and collective soul for someone's long term profit margin and the promise of future tax revenue? To be honest, I just don't know the answers to those questions but I know what camp I'm in. I found this quote from Eddie Wilson on the dedication of the commemorative Armadillo plaque fitting for this situation in an implied sense:
"It is still on the lips and minds of a lot of people 26 years after it closed. This is noteworthy for me because of the zero-tolerance mentality, and now the city erected a memorial that glorifies the things of the past that are not accepted today."Now, I think Mr. Wilson was probably talking about the "lifestyle choices" of the attendees of the Armadillo in the quote above but I also read it as a kind of collective regret from those "official" citizens of Austin to our past. As if the plaque was meant to make up for the destruction of something that so defined and made Austin, some kind of amends to the collective memory of those long time Austin residents that defined us for the last 30+ years had to be made to continue to justify what they are still selling to this day. Something official that says to those Austinites, "Sorry, we kinda screwed up here by replacing this important piece of our history with an office building parking lot. But even though we continue to sell the image of the Armadillo to the rest of the country, here's a plaque and please accept our apologies whilst we continue through our action to undermine and bury that unique image..." Personally, I would hate to see that 26 years from now after that part of Barton Springs has been dramatically changed with 10-story condo buildings up and down, a future Council again feels the need to leave another plaque with a picture of what was once there to tell the story of Austin instead of Austinites being able to experience it for themselves.
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Friday Fog Pictures - Town Lake
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Re:Friday Fog Pictures - Town Lake
These are quite beautiful I love the first one especially. Yesterday's fog made for an interesting drive for me.


"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.
"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 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 this 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 census 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!