City of Austin’s own analysis admits new supply restrictions will hurt housing affordability

(h/t Austin Contrarian for the link to the report)

For whatever reason, housing affordability advocates in the United States (unlike their counterparts in, among other places, Britain) tend to ignore the market-supply side of the crisis in housing prices, preferring to focus on the need for more subsidies or set-asides for the very low-income. That need exists, of course, but while activists deny that supply has anything to do with affordability, many of the people actually setting housing policy are pretty clear about the consequences of their actions.

In Austin, for example, a booming economy has led to skyrocketing demand for housing in one of the few major Texas cities that severely restricts supply. A crisis of affordability, unsurprisingly, has followed. In the face of very high rents, a lot of young people of modest means have  started to do what they already do in places like Boston or DC: they save money by splitting houses or apartments between many people. But the city of Austin has decided that’s detrimental to the character of blah blah blah, so the city council wants to make it illegal for more than four people who are unrelated to share the same house – or two in the same apartment.

Now I’ll turn it over to the city’s own report on the effects of this policy:

This change could have a negative impact on housing affordability for some low-income households…. The reduced occupancy limit will most likely increase the demand for both market rate and affordable housing in the city. An increase in demand and occupancy rate will most likely result in an increase in rental prices across the city.

It goes on to acknowledge the broader context of an already supply-starved market:

The occupancy rate in Austin has been high the last three years. Capital Market Research reported Austin’s occupancy rate at 96.9% and a rental rate at an all-time high of $1.21 (monthly per square foot rate) in their 2013 End-Year Summary. Based on this report, there appears to be a correlation between demand for rental units and the cost of rents to residents.

People who campaign against dense housing construction are clear about what they want. Cities that regulate density are clear about the effects of their actions. When does the left decide to wake up about this?

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