Gentrification and Austin Housing Prices

[StoOgE]

Originally Posted by lzppjb

Edit: Triggered.

Or we could reduce complicated social issues to a meme. Either way.

[lzppjb]

Why do you assume it's a right for someone to remain in the neighborhood they grew up in? People get priced out and move all the time. My parents did. I did.

[chinchaaa]

Originally Posted by lzppjb

Edit: Triggered.

Wow, you really got him.

[lzppjb]

Originally Posted by chinchaaa

Wow, you really got him.

I was talking about myself.

[StoOgE]

Originally Posted by lzppjb

Why do you assume it's a right for someone to remain in the neighborhood they grew up in? People get priced out and move all the time. My parents did. I did.

I don't think it's a right. But I think it's not too much to at least consider the ramifications of gentrification and at least acknowledge that there are people who are actively harmed by it.

I also note that no one seems to have addressed the underlying societal causes of poverty, or the actual legal federal policies that limited home ownership by minorities in the US. Redlining was very real and it didn't stop when the federal law was made illegal. The first bank I recall even opening on the East side was the Wells Fargo just off the highway on 12th. There was no equal access to banking for these communities. The Equal Credit Opportunity act is from 1974! Women were largely prevented from owning property or applying for credit on their own as recently as 40 years ago. Kirchberg v Feenstra is from 1981.

HUD got hit with a 200 million dollar relining settlements from 2008! This is recent, and it's a problem.

https://web.archive.org/web/20170308...FHUDNo_15-064b

Wells Fargo created higher-cost mortgages that targeted people of color in the 2000s:

https://www.nytimes.com/2009/06/07/us/07baltimore.html

It's easy to say "do better" but it requires that you willfully ignore federal laws that kept women and minorities without equality on law let alone in practice. It's easy to say people should make "better decisions" while ignoring the fact that access to credit has never been equal in the United States. Sure, some people are certainly poor because they made poor individual decisions. But there are systemic causes of poverty, many of which have to do with historic and current societal inequality.

[wwmiv]

Kevin and/or ATX, can we create a new thread entitled "Gentrification and CoL in Austin" for discussions like this and move these comments to that thread? They seem to pop up all the time in various threads.

[KevinFromTexas]

I will say that at no time in the past have there been so few children in our neighborhood, which leads me to assume that families are moving out and are being replaced with well to do professional singles or empty nesters giving all their priority to their careers. At the moment, I think there are only two families left with kids here, and I believe one of them is in the process of moving out since they've been moving stuff out of their house, either that or they're remodeling. Anyway, I grew up in this neighborhood with kids all up and down the street. All the kids at my elementary, middle and high school lived here. Several of them lived on my street. The kid across the street was in my third grade class at Odom, and the two older ones on either side of them went to Crockett and Bedichek. Halloween night was always busy with families out walking. We often ran out of candy before it was over. Our street is also the first one you come to off of the main street from Crockett, and students would always walk down our street on their way to and from school. There were throngs of them. Now I might see 1 to 3 of them walking. I don't know that it means more students there have cars than in the past, but even if they do it's more likely that they don't live in the neighborhood anymore and are coming in from other areas. AISD is seeing a smaller student enrollment now, too. My measure of a healthy environment or economy, etc, is are families doing well there? Are they staying in a place or having to move around a lot? Kids need a stable environment. Moving around a lot is a big disruption to them. Thankfully, it's not something I went through growing up. By comparison, the neighborhoods outside of the core of Austin that my brother and sister and their families moved to are FULL of kids. Halloween night there is crazy with the number of people out trick or treating. Some of those they've figured out drive into those neighborhoods from more rural ones where people generally don't trick or treat so that their kids will have a chance to, but many of the families there are actual families with kids, unlike in my neighborhood in South Austin.

[ATXboom]

Originally Posted by KevinFromTexas

I will say that at no time in the past have there been so few children in our neighborhood, which leads me to assume that families are moving out and are being replaced with well to do professional singles or empty nesters giving all their priority to their careers. At the moment, I think there are only two families left with kids here, and I believe one of them is in the process of moving out since they've been moving stuff out of their house, either that or they're remodeling. Anyway, I grew up in this neighborhood with kids all up and down the street. All the kids at my elementary, middle and high school lived here. Several of them lived on my street. The kid across the street was in my third grade class at Odom, and the two older ones on either side of them went to Crockett and Bedichek. Halloween night was always busy with families out walking. We often ran out of candy before it was over. Our street is also the first one you come to off of the main street from Crockett, and students would always walk down our street on their way to and from school. There were throngs of them. Now I might see 1 to 3 of them walking. I don't know that it means more students there have cars than in the past, but even if they do it's more likely that they don't live in the neighborhood anymore and are coming in from other areas. AISD is seeing a smaller student enrollment now, too. My measure of a healthy environment or economy, etc, is are families doing well there? Are they staying in a place or having to move around a lot? Kids need a stable environment. Moving around a lot is a big disruption to them. Thankfully, it's not something I went through growing up. By comparison, the neighborhoods outside of the core of Austin that my brother and sister and their families moved to are FULL of kids. Halloween night there is crazy with the number of people out trick or treating. Some of those they've figured out drive into those neighborhoods from more rural ones where people generally don't trick or treat so that their kids will have a chance to, but many of the families there are actual families with kids, unlike in my neighborhood in South Austin.

Regarding families. This is evident in AISD enrollment. City is growing but enrollment dropping fast. Part of this is due to private schools but no doubt families are getting priced out of Austin.

[KevinFromTexas]

Most private schools are small, though. The one my niece and nephew go to/went to has maybe 100 students. They've gone back and forth between private school and homeschooling. My nephew will probably end up going to Crockett, though, and will become the third generation student in the family to go there. In fact, most of our family did. He'll have to transfer, though, because they live well outside of Crockett's enrollment zone.

[urbancore]

I really think it has to do with the changing requirements of families and the condition/price of older home stock in Austin. Kev, the wave is headed your way. Just wait...granted in may take 10 years. When you grew up, those houses were pretty new, and Austin was a more modest town. A lot of people age in place. I'd say there are 10 people on my street alone who have lived on Hether since at least the 80's. The house I bought in 2015 and moved out to Bertram, housed the original owner since the 50's.

Zilker Elem was a school scheduled to be closed just a few years ago, due to the fact that the neighborhood kids all graduated high school and moved on. The houses they lived in, were VERY modest 800-1200 sqft homes ripe to be torn down. On my street alone, within 4 blocks from Bluebonnet to Lamar, there are 18 new homes...every single one of them replaced an older run down house that was beyond repair, and every single one of them has small children.

The interesting thing is, most of the newcomers are Austinites....not West Coast Techies (though there are a few). Because Zilker is primarily white (though it used be the home of at least one Freedman Town -The Goodrich Freedman Town), you don't hear gentrification cries, though the NIMBY's are out in force. I predict all of the urban core in Austin will go the route of Zilker.....nice old homes will be renovated and sold for a ton, shitty old homes will be torn down and new homes will replace them (most will be more family friendly) and sold for a ton x 2. These homes are primarily bought by families. I see it happen all around me. Zilker and Barton Hills Elem are closed to transfers for the first time in a long while, and my street is bursting with kids.

Halloween this year, I passed out candy to more than 300 kids in the rain. I just applied to the city to close our street to auto traffic for 4 hours during Halloween next year.

What is happening in Zilker is what will happen in all these older stock neighborhoods, at one point or another. It's what is supposed to happen, it a natural order. Kids grow up and move. Older homes get dealt with, and newer families will move back when it makes sense to them. I don't see this process as sad, I see it as tilling the fields for the new crop. Its beautiful, its obvious, and its life.

On the other subject of black home owner discrimination. My industry along with complicit Fed/State/Local Governments is completely 100% to blame for holding back the black community (and probably other races/ethnicity's). And I WOULD support some sort of reparations to the black community. After reading the "The Color of Law" by Richard Rothstein, I am convinced there is no other way to right our collective wrong.

https://www.npr.org/2017/05/17/52882...ed-segregation


That being said, to combat gentrification, we cannot just section off neighborhood and say only these types of people can live there. That has never worked out. Homeowners are not "pushed" out, renters are. But then, I rented in this town for 20 years before I saved enough and purchased a POS on Riverside and fixed it up. It can be done, it just takes time, risk, a ton of work and sacrifice. Most urban core homeowners sell for a ton of money. Don't feel bad for them....not one bit. The renters will have to start in cheaper neighborhoods and make it work. I don't get to live in Rollingwood cuz I want to, I have to figure it out... I first bought in Riverside in 2001. People thought I was nuts. Then I bought off Cameron Rd, then Rosedale, each time fixing them up...with lots of my own efforts, time and money. In 2011, at the bottom of the market, I bought a tear down for $218k in Zilker. Everyone I know thought I lost my mind. It was risky...yes. But after living in this town since '83, I knew it would come back stronger than ever. I've seen Austin comeback the late 90's, the mid aughts, and again now. I did however lose my ass on my 360 Condo and sold my Milago at break even.

I grew up poorer than anyone I've ever met...on hippie communes (one with no running water.....so we had an outhouse). My middle is Che as in Che Guevara. I paid my way through UT, living on Riverside working 3 jobs, one of them for $3.50/hr. I don't pity poor or hate the rich. The only reason I can afford the home I live in, is because I built it, and I don't owe a lot on it (due to the fact I rolled the profit from the last several homes into it)

We need to learn to live together...not apart.

[austlar1]

Young couples (many of them newly arrived in the city and more than a few are gay or lesbian couples) are snapping up the "affordable" modest 1980s era homes in my southwest Austin neighborhood (Maple Run) at a breath-taking pace. Some homes sell before the listing goes active just from a "coming soon" sign in the yard. Prices have easily doubled in the past 8 years. These are 1,200 to 1,600 square feet homes on small lots. Lots of trees and great shopping (Whole Foods, Costco, Randall's, two HEBs) within blocks, nearby park, trails, and green spaces, quick Mopac access, and downtown or the airport 15 to 20 minutes away during rush hour. The neighboring public schools are supposedly pretty good, but there are very few children in the neighborhood. I am assuming (with a certain amount of dread) that many of these new homeowners will start making babies one day soon. There seem to be a lot more traditional families with children right down the road in more upscale neighborhoods like Circle C. I think it is obvious that some of the older and more modest housing stock in South Austin has been targeted by younger first time homeowners and new arrivals to the area. Will they stay put when the kids start to arrive? I can imagine a time in the not so distant future when these modest homes are being enlarged or remodeled into something far more grand. That's what happened in many central North Austin neighborhoods.

[the Genral]

I left the downtown area to have a 5 bedroom house built on a half acre east of Round Rock. $139K in 1997. My mortgage payment is still $918 not including taxes. What's hurting me is I'm paying taxes on the current value of my house which is close to $300K now. It's 22 years old and should have depreciated in value due to wear and tear. The same scenario that is affecting everyone from homes to business throughout the Austin area. I didn't add $150K to the value of my house, supply and demand did. Hoards of people moving to our area did. It may be possible that I have to look further north to find a less expensive alternative to what I have now, especially since I'm so close to retirement. It's entirely possible I may be forced out of my situation that I truly love and worked hard for due to circumstances out of my control. I don't know if it's fair or not, but what I think would be fair would be to pay taxes on what I paid for the house, and if I end up selling my house, let the buyer pay taxes on what they paid for it. Anything new getting built around me seems to dictate what my new valuation is, and I get higher tax rates as a result. Am I wrong to think this is unfair? The only plus is the resulting equity is pretty high but not really useful while I'm alive. I don't want to borrow against it, ever.

[jbssfelix]

Originally Posted by the Genral

I left the downtown area to have a 5 bedroom house built on a half acre east of Round Rock. $139K in 1997. My mortgage payment is still $918 not including taxes. What's hurting me is I'm paying taxes on the current value of my house which is close to $300K now. The same scenario that is affecting everyone from homes to business throughout the Austin area. I didn't add $150K to the value of my house, supply and demand did. Hoards of people moving to our area did. It may be possible that I have to look further north to find a less expensive alternative to what I have now, especially since I'm so close to retirement. It's entirely possible I may be forced out of my situation that I truly
love do to circumstances out of my control. I don't know if it's fair or not, but what I think would be fair would be to pay taxes on what I paid for the house, and if I end up selling my house, let the buyer pay taxes on what they paid for it. Anything getting built around me seems to dictate what my new valuation is, and I get new higher tax rates as a result. Am I wrong to think this is unfair?

This is partially why the property-tax-heavy system in Texas can be extremely painful. At least with an income tax, my taxes only go up when I get a raise/promotion. With property taxes, it's completely out of our control how much they go up.

Alternatively, Austin also cripples peoples' abilities to mitigate those taxes by forcing folks to keep their old large-lot SFH exactly as such, when they could subdivide and build multiple units on the same land, and peanut butter spread those taxes across multiple payers.

[lzppjb]

Originally Posted by jbssfelix

This is partially why the property-tax-heavy system in Texas can be extremely painful. At least with an income tax, my taxes only go up when I get a raise/promotion. With property taxes, it's completely out of our control how much they go up.

Alternatively, Austin also cripples peoples' abilities to mitigate those taxes by forcing folks to keep their old large-lot SFH exactly as such, when they could subdivide and build multiple units on the same land, and peanut butter spread those taxes across multiple payers.

I think your last point is going to be more widespread (pun intended) soon. The neighborhood in South Austin (just south of Ben White) where we just sold my grandma's house (and where jdawg lives) is doing just that. Houses are being bought and either replaced or renovated. The lots are usually long 1/4 acres, and 2nd homes are being put in the backyard. This has been going on for quite a few years now. I think this density will keep happening.

[lzppjb]

Originally Posted by ATXboom

Regarding families. This is evident in AISD enrollment. City is growing but enrollment dropping fast. Part of this is due to private schools but no doubt families are getting priced out of Austin.

Another factor is that AISD kinda sucks compared to our neighbors. At least with regard to extracurricular activities, which is a huge part of a student's life.

Athletics is one example. Just look at our facilities. Old stadiums, tiny locker rooms, no space for outdated weight rooms, etc.

Neighboring ISDs have shiny new football stadiums. Newer schools have bigger, nicer locker rooms, meeting rooms, weight rooms, laundry facilities for athletics, bigger training rooms, and many even have indoor practice facilities (Lake Travis, Westlake, and even Del Valle).

If you have a kid(s) that you think will play sports, what would you do? Pay the high tax and stay in Austin where the facilities can't begin to match up, and the programs don't have as much success? Or do you move to the burbs, allow your kids to have access to better facilities, higher paid coaches, and more success? You'll probably get a bigger house and just have to commute some.

AISD is trying to fix this. They just got that bond passed that will put a ton of money into the schools. Bowie is getting an entirely new athletic wing. Austin High is getting an expanded athletics area. And they've already started on the 2019 Facilities Master Plan. One of the main areas of focus is Athletics. They want to address the shared use facilities (House Park, Burger, Nelson, etc.).

If we could ever replace, or at least adjust Robin Hood, AISD could have a LOT more money to support their facilities, salaries, etc.

[AusTex]

Originally Posted by StoOgE

We need more density (and change to get there), requiring a certain % of new units to be low-income, tying a certain % of low-income units to those displaces recently and giving bonuses for retaining locally-owned or historic neighborhood business in new developments. A more robust public transit infrastructure is a big help to poorer people in increasingly more expensive cities as well. There are solutions to this, and unless we want Austin to be 99% upper-middle class tech bros in 20 years these are problems that need to be tackled now.

I totally agree with the need for more density and robust public transit infrastructure. The density should not be corporate owned rental apartment buildings as the only choice.

Every development, including, apartment buildings should be required to have a diversity of unit sizes, including smaller sized units. Say... 2 bedroom units with smaller bedrooms and living spaces that rent at market value; rent per square foot. This would allow certain lower income groups into the development that otherwise would not be able to afford the rent.

Single family home developments should be required to provide a certain number of smaller sized units at market rate as well. Offer duplexes or attached house if necessary for part of the total. Offer choices.

The day of allowing the developer to do anything they want needs to be over. Fast growing regions like ours cannot keep socioeconomically segregating the income classes. Building only big new homes and corporate owned apartment developments only limits the offerings.

[AusTex]

Originally Posted by the Genral

It's entirely possible I may be forced out of my situation that I truly love and worked hard for due to circumstances out of my control. I don't know if it's fair or not, but what I think would be fair would be to pay taxes on what I paid for the house, and if I end up selling my house, let the buyer pay taxes on what they paid for it.

California Proposition 13 from 1978 (officially named the People's Initiative to Limit Property Taxation) comes to mind. Taxes are frozen at 1% of the cash vale of the property. This includes commercial property which was a huge mistake since company's hold property for a very long time.

Texas needs an Income Tax.

[verybadgnome]

Originally Posted by StoOgE

I don't think it's a right. But I think it's not too much to at least consider the ramifications of gentrification and at least acknowledge that there are people who are actively harmed by it.

I also note that no one seems to have addressed the underlying societal causes of poverty, or the actual legal federal policies that limited home ownership by minorities in the US. Redlining was very real and it didn't stop when the federal law was made illegal. The first bank I recall even opening on the East side was the Wells Fargo just off the highway on 12th. There was no equal access to banking for these communities. The Equal Credit Opportunity act is from 1974! Women were largely prevented from owning property or applying for credit on their own as recently as 40 years ago. Kirchberg v Feenstra is from 1981.

HUD got hit with a 200 million dollar relining settlements from 2008! This is recent, and it's a problem.

https://web.archive.org/web/20170308...FHUDNo_15-064b

Wells Fargo created higher-cost mortgages that targeted people of color in the 2000s:

https://www.nytimes.com/2009/06/07/us/07baltimore.html

It's easy to say "do better" but it requires that you willfully ignore federal laws that kept women and minorities without equality on law let alone in practice. It's easy to say people should make "better decisions" while ignoring the fact that access to credit has never been equal in the United States. Sure, some people are certainly poor because they made poor individual decisions. But there are systemic causes of poverty, many of which have to do with historic and current societal inequality.

I won't argue that there was not discrimination and later on adjudication of these wrongs. Still on the east side most of the property owners were low income minorities up until recently. Actually I bought my Holly house from someone who grew up in the neighborhood, but sold and moved to south Austin. Actually I've been surprised by the number of people who have owned multiple properties, something I was not accustomed to living in the the suburbs. Even know one guy who owns a house near Juan-in a-Million who had a five (5)! year mortgage, which is less than the average auto loan today. My lender never even offered me such a product.......The fact that there wasn't a bank on the east side probably points to the fact that it was not profitable for them as I can't think of a single bank that is a non-profit (as opposed to credit unions)......All this is getting away from the root causes of poverty which have little to do with housing or so-called high opportunity areas.

[verybadgnome]

Originally Posted by AusTex

I totally agree with the need for more density and robust public transit infrastructure. The density should not be corporate owned rental apartment buildings as the only choice.

Every development, including, apartment buildings should be required to have a diversity of unit sizes, including smaller sized units. Say... 2 bedroom units with smaller bedrooms and living spaces that rent at market value; rent per square foot. This would allow certain lower income groups into the development that otherwise would not be able to afford the rent.

Single family home developments should be required to provide a certain number of smaller sized units at market rate as well. Offer duplexes or attached house if necessary for part of the total. Offer choices.

The day of allowing the developer to do anything they want needs to be over. Fast growing regions like ours cannot keep socioeconomically segregating the income classes. Building only big new homes and corporate owned apartment developments only limits the offerings.

Corporate-owned rentals are not the only choice as their is a wide array of housing inventory owned by individuals.

Mandating sizes and number of bedrooms does not change the market fundamentals including the cost per square foot or the price of land. I am not against relaxing zoning to provide a greater diversity of products, but that still does not change the fact that a basic stick built home costs $200/sq. ft. and no one under MFI can afford a new unit (unless it is tiny).

The overall situation has not so much to do with the cliched "evil developers" as a lack of product relative to demand. You put a mandate on developers that they provide X number of units at a lower price means they will just charge the market units enough to recoup the losses on the subsidized units. Penalize them more and they will just develop another product not subject to your rules or put their money in tech start-ups.

[zrx299]

Property taxes based on perceived paper value is just plain evil and feudalistic.

If/when you sell, that's an entirely different story. That's capital gains.

Plenty of much more fair ways to raise funds for local services that don't have people guessing and paying ever increasing "rent" on their own damn property every year. Why even bother owning at that point?