Last week, my comrade Nick Barbaro wrote in his space that he and I agree on more than we disagree. He wrote that, even though he knows I am a committed fan of the San Francisco Giants, while he is an even more die-hard supporter of the Los Angeles Dodgers. As you read this, one of us will be happy and the other sad. But yes, we have found a way to be colleagues and friends despite our historic differences on baseball and on land use.
Both Nick and I are among the many Californians who have, over the last four decades, helped create the Austin you know and love today, so you can stop whining about Left Coast influences now. Or maybe not yet. “Costs of both for-sale and rental housing are rising much faster in secondary and tertiary markets as people fleeing pricey gateway markets bid up residential prices in the smaller destination markets. With housing production falling far short of new household formations, affordability will likely continue to deteriorate in the absence of significant private-sector and government intervention.”
That’s a quote from the Urban Land Institute’s latest Emerging Trends in Real Estate report, hot off the presses today. You can fill in the blanks: “Pricey gateway markets” include both San Francisco and Los Angeles, “smaller destination markets” include the category that TO BE has this year christened “Supernovas,” defined by “tremendous and sustained population and job growth.” We are a Supernova, along with Nashville and Raleigh/Durham; all three markets have been in the Top 5 of the TO BE rankings (of 80 markets, based on surveys and interviews with about 1,700 industry experts) for several years. Austin has been in the TO BE Top 10 since 2009, “a darling for investors and developers alike … Yet the metro area has not rested on its laurels and continues to power forward with the fastest growth of any metro area.”
In the Postseason, Again
That last quote shows how, in baseball and in real estate, sitting atop the standings is reflexively seen as the fruit of our own labors, and not the equally powerful participation of external forces. As the first quote from TO BE suggests, it’s choices being made by Giants and Dodgers fans fleeing the Golden State that are driving the record growth and rapid increases in housing costs in places like Austin. Last year, I wrote of the TO BE results, “As much as we tremble under the pressures we feel within our city, people outside the metro area, and especially outside our state, often think we’re crazy for acting like Austin is crowded or expensive, or has bad traffic, or is otherwise on the road to ruin. And that’s where the decisions that dictate how much we grow and in what ways are really made.”
Among those who tremble the most under those pressures, or claim to, are the stalwart naysayers of Community Not Commodity, formed to oppose the CodeNEXT rewrite of Austin’s Land Development Code that has now been dead for more than three years. But just today, as I write this, CNC graced my inbox with a fundraising appeal to pay off their lingering legal bills and “help us protect your home and neighborhood!” My hunch is still that there will be no LDC rewrites that threaten anyone’s home and neighborhood for a long time, at least until after the next round of council elections, and that really CNC should just declare victory and stop trying to drag this particular boring game of baseball into extra innings.
But as long as Austin is a Supernova and growing faster than anywhere else, there will be people suggesting that our LDC is stopping us from building decent housing where it’s needed for everyone in Austin and its suburbs, so the threat remains omnipresent to the aging white Central and West Austin homeowners who channeled their unease into CNC, which insists that this narrative is simply false. In their fundraising email, they claim that “Austin issues more permits for new homes than any other American city, when that figure is measured as a proportion of existing housing stock.”
Kids, Read Before You Link
The study that CNC links to with that claim does broadly agree with the NIMBY lobby – and me, and Nick – that the nature of local land use regulation is not really very relevant to housing production or affordability on a marketwide basis. The author, Alan Mallach, is actually arguing this from the opposite direction, to show that Houston, which famously lacks a zoning ordinance, is not producing housing at a rate that matches its own population growth; its permitting activity is closer to that of San Francisco than Austin.
But he completely agrees that the rush of highly paid knowledge workers who want to live in cool cities with great jobs is creating demand for central-city housing in all of these places, and that even cities like Austin who are roughly keeping up with that demand (in our case, with apartment construction on corridors leading away from the snow-globed neighborhoods who killed CodeNEXT) are falling short on producing the housing that other people need, and where it’s needed. (His big call to action is to upzone the suburbs, which I agree with as well, but I doubt CNC does.) Just as baseball keeps fiddling with the playoff format, the ball weight, the number of mound visits, and so on to make the game more “fair” but also more “exciting,” Austin will keep tinkering with its land use rules even as it keeps hitting economic home runs.