Is rent control in other cities good for Austin Texas?

Question

In today's wall street journal, there is an article about rent control proposals in other places like the the typical spots in California, New York City and now Portland, Seattle, and others. I think that anyone with a wee bit of brain power can figure out that rent control is bad for everyone. If the landlord isn't able to get market rents then the costs of operations shouldn't be at market prices either. One cant expect the handyman, or the cleaners or the electrician or the plumber to work at below wages just to cut the tenant a break. Its economics, the tradesmen/women will simply not work there..I wouldn't if I were them. So, who gets squeezed? Landlord..Yes but the tenants will ultimately have to fix everything themselves because I would not be fixing it as I now have an incentive for them to move out. So that is the economics as I see it.

The interesting idea that just occurred to me is do those policies in other places create more capital flows to less regulated areas like Austin, Dallas, Houston and San Antonio? Its a hunch that it does. Thoughts?

Stephen Stokes · Answer

Few interesting articles from Mises on rent control:

https://mises.org/library/unintended-consequences-...

https://mises.org/blog/rent-control-makes-good-pol...

David Ferrette · Answer

I really like how the first article starts out:

"Suppose that you want to destroy a city. Should you bomb it, or would it be sufficient just to impose rent control?"

John Umphress · Answer

Aaron, the I-35 upper decks were constructed about 40 years ago, when Austin was smaller and before I-35 became the NAFTA highway.  Few cities and counties have the resources to construct highways - that has traditionally been the role of state and federal governments.  But Washington has slashed transportation funding (especially for transit and multimodal) and Texas hasn't increased the gas tax in more than two decades.  Hence, congestion and the recent move to toll roads.

For all the complaints about Austin being too expensive,  sure is a lot of construction going on.  Lot prices are a good reflection of Austin's desirability.  Scarcity of buildable land is only part of the equation - you also need demand to move prices and there is a lot of demand for Austin lots.  Not as much large-scale SF development as Austin does not have the raw land like eastern Travis, Hays and Wilco.  CodeNext will likely result in higher density along transit corridors, but not a whole lot else.  Rent controls?  In a state that expressly prohibits inclusionary zoning?  Doubt we will ever see it.  Density bonuses (like Austin utilizes) and land trusts will likely be the (minimal) nod to affordability.

Austin wasn't always expensive.  I remember cheap rents in Clarksville, foreclosures in Travis Heights and 2100sqft houses in University Hills that could be picked up for 48k.  Lots in near East Austin?  2 or 3k apiece - may have to clear up some back taxes.  Too bad I was broke back then!

Aaron Gordy · Answer

@Jarrod Weaver I am not so sure about the term socialists describing the powers that be in Austin. This code next business is addressing the land use restrictions and housing supply in Austin. I think that rent control is bad. WILCO will continue to blow up given the high cost of living in the core of the city and the traffic. It seems that no one in power has the courage to step up with mass transit like major cities or fix the roadways that cause so many issues. I can go around the core of the city and point out the errors in highway construction. Its horrible. For example, when is it smart to go from 4 lanes down to 3 lanes near downtown in a highly congested area? Its stupid. I am talking about the upper and lower deck going from north to south and the turn off onto 11th street. Is it any wonder why there are traffic jams there every day? It takes courage to address these massive failures. These failures are causing the tax base to move to wilco and hays county. Code Next is trying to increase the supply of housing which will have an major effect upon keeping prices not escalating out of control but developers will have a field day and I am personally looking forward to it!  I will be in Wilco, Hays County and Travis County. Good to be in Central Texas!!!

Jarrod Weaver · Answer

The restrictive policies adopted by the City of Austin are already moving capital to other markets. The growth in Williamson County (Georgetown/Cedar Park/Leander/Round Rock) is in no small part created by the socialists in control of ATX. It's a win-win of sorts. They get what they want and the more reasonable governments in WILCO get all the growth they can handle.

Marcus Johnson · Answer

To me it's simple. If  your local Gov't isn't for the free market and they want to force you into rent control basically by pointing a gun at your head, then I wouldn't want buy in that market.   Scary stuff.

Fred Heller · Answer

The first time I visited Austin was in the late 70s. I spent a couple of days there scouting out the area while I considered a job offer.Compared to Dallas, Austin was pretty sleepy. It was a smaller city of 300,000 give or take.The thing that really stuck out to me was that they had nude apartment buildings. I kid you not. Many of the apartment buildings in Austin were clothing-optional around the pool.

Bart H. · Answer

Dallas is trying to become a California/Austin mini-me.  I don't think they will get rent control.  But there is a real push for source of income.  And they are pushing very hard to force rules on developers of large apartment buildings to add affordable housing.

Nate R. · Answer

The restrictive policies in Austin amount to regulations that constrain supply, which in turn drives up prices. So far, I haven't heard about imposing rent control, but I've heard things like mandated affordable housing for new projects. Which is just another way of restricting supply, which will maintain property values in the long run. The City Council and other leaders are all property owners - they know what's good for the goose is good for the gander.

Is rent control in other cities good for Austin Texas?

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