Quote:
Originally Posted by wwmiv
We should simply create a city-wide law that deals with the problem:
(insert % here) of units in every (a or b) development be given at (insert x here) share of (c or d) (e or f) (g or h), (insert exemptions here)...
The goal should be to redistribute poverty such that we don't cluster poverty in any one location. That way, all schools are dealt with and funded equally (because property taxes would eventually equalize). And thus, the poorest among us would get good education regardless of location. Of course, this is only a regional solution, not one that can or should be expropriated to the state or federal government.
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Sorry, wwmiv, I could not disagree more. The state's Robin Hood rule already deals with making sure that schools in poverty districts receive additional funding to bridge the gap in property tax values from schools that are well-funded or over-funded. Social engineering on any level should be discouraged. In fact, I would argue that letting the markets operate in unadulterated capitalism would yield better results. Capitalistic markets ALWAYS correct themselves over time. A great example is the micro-unit development underway on the Eastside (I believe it's on East 5th). The developer saw a need for housing that is more affordable than the $1,800+ rents being charged at most new developments in Austin's core so they are building smaller units with rents that will be around $1,000 so people who would not qualify at $1,800 rents can qualify (without city or Federal subsidies) for their product and still enjoy living in a walkable, Central location.
I work for a local real estate investment firm here in town (we do some development too, but no high-rises) and can tell you first hand how difficult the city makes doing business these days. Many firms like mine recognize that there is a high-demand niche in the market for units that are not over-amenitized and not A++ luxury product. The demand is much higher, meaning that lease up is achieved much more quickly than a luxury product which then means we can sell the project when it is stabilized in a shorter amount of time while also delivering at a lower cots because we're not set on putting granite, quartz, marble, travertine tile, etc. in our developments. The combination of lower upfront cost and exiting in a much faster timeframe means that we can achieve returns that are just as good (or better) than some of the luxury developments. Returns to investors are boosted significantly by achieving a capital event (sale or refinance) in a shorter amount of time. So this is REALLY a "win-win" in that provides a quality, lower-tier product at more affordable rents to the market with a lower-risk investment to us and a shorter hold period.
And trust me when I say many developers are wary of Austin's ability to continue absorbing luxury product given the slow down in job growth and the staggering amount of supply of luxury product that has hit the market in the last 5 years. I strongly believe you will see more development geared towards middle class and low-income tenants in the next several years since it is an underserved market in Austin. This will occur without the city having to force the issue because of natural supply & demand economics. Again, the markets will always correct themselves over time...if the city doesn't interfere...I'm sure that the Brackenridge development for instance will deliver medical office space, housing and hotel space that will interact well with the neighborhood and be complimentary to the Medical School Complex without the city dictating what should be built there. That is the highest and best use of the property which developers are very well aware of and what the market will best embrace there.
On that note, I just read an ABJ article that quoted one of the Central Health representatives saying they were not made aware that a new CVC was being proposed through the project. Our city does not communicate very well either....
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