What Austin Can Teach NYC About Housing

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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Think of a city that has a severe housing shortage and can't figure out how to add enough new affordable units. You only get one guess. New York. That's right. You all got it. Now, think of one that somehow is adding a lot of apartments to keep up with rising demand. Well, apparently the answer is Austin.

Capital of Texas is expected to add more apartment units than any other city in the country this year. How? This comes after years of an influx of demand that drove up housing costs, like happens lots of places like has happened here. In 2021, rent rose at the fastest pace in that city's history. A year later, rent growth exceeded every other large city in the country. Bad news.

Reportedly, the new moves to build will bring those prices down for renters and buyers. If you were to look at some of the media headlines, that wouldn't be good news either. The Wall Street Journal said, "Once America's hottest housing market, Austin is running in reverse." Newsweek asks, "What's behind Austin's mass exodus?" Are apartments coming or are people going?

Let's see how much of each and what New York might learn from a city with very different city limits and very different dynamics. A new article in The Atlantic makes the case that if we want to understand America's strange relationship with housing in the 21st century, we should look at Austin where "no matter what happens to prices, someone's always claiming that the sky is falling".

Joining us now is Derek Thompson, staff writer at The Atlantic. He also writes the newsletter called Work in Progress and hosts the podcast called Plain English. Derek, always good to have you. Welcome back to WNYC.

Derek Thompson: It's great to be here. Thank you.

Brian Lehrer: First, what happened in Austin before the building boom? Was there a population spike that caused the housing shortage?

Derek Thompson: There was a huge population spike. In many ways, Austin, Texas grew faster than basically any other metro in the country in the 2010s, and that's a reflection of the fact that Texas in general has been growing faster than any state for the last 10, 20 years. Austin, you could say, was the fastest-growing city in the fastest-growing state. It was adding a ton of people, and for a while, Austin was struggling to add enough housing units to account for all of these new domestic migrants, people moving within the US.

For a while, and you mentioned it perfectly, rents were going up and up, but then finally, Austin's growth of housing seems to have caught up to its growth in people, and as a result, home prices are not rising. In fact, they are falling.

Brian Lehrer: You're right. As a share of existing inventory, Austin is adding homes more than twice as fast as the national average and nearly nine times faster than San Francisco, Los Angeles, and San Diego. What does that look like? Do we know what kind of housing is being built and where, in or around Austin?

Derek Thompson: Yes. We know that it's a blend of single-family housing and apartments. We know that as in the rest of Texas, a lot of times the downtown areas get built out and as a result, more housing is added in the near suburbs, the inner ring, and then the further excerpts. Housing is being built across the board. A lot of it is apartments, a lot of it is single-family housing, but I want to return to that statistic that you just mentioned, that Austin is adding homes as a share of existing inventory nine times faster than San Francisco, Los Angeles, and San Diego.

This is a huge topic that I am obsessed with, essentially that blue cities in blue states, so especially those in California, but also New York City has really struggled to add housing. Governor Hochul has been all about how do we get more housing built in New York state? She's really struggled to get that through the state legislature. There's people on the left who oppose new construction, people in the middle who are jealous about their housing values, people on the right who don't want new construction.

It's been very, very difficult to add housing in much of the country and especially on the coast, but in Texas and really throughout the Sun Belt, that's where the houses are being built and that's where the people are moving, and so you have depopulation from New York and California. Both states are shrinking as last I checked, and meanwhile, you look at the Sun Belt and especially Texas, where populations are absolutely booming.

Brian Lehrer: What we've learned in surveys recently in New York is that the people who are leaving New York tend to be less affluent people who just can't afford the cost of housing here, and so they're looking for other places to go. To the point of the roadblocks on building the housing that New York needs, as well as some of the California cities you were mentioning, you write, "A combination of stifling construction regulations, eternal permitting processes, legal tools to block new development and NIMBY, not in my backyard, neighbors restricted the addition of more housing units."

Did Austin not see any kind of pushback along those lines? I say on this show sometimes, there are two immutable facts about affordable housing in New York City. Everybody agrees we need a lot more of it, and everybody agrees just don't build any near me. Did that not happen in Austin?

Derek Thompson: It clearly didn't happen in Austin as a metro because that's where all these housing units are being built, but at the same time, people in Austin are just like people in many ways in Boston, New York, or Los Angeles. There's an unofficial motto of Austin, Texas, "Keep Austin Weird." In many ways, I know there's lots of people who live in Austin that have been against the rise of new development, but it is generally the case that throughout Texas, it's much easier to build, not only because of geography.

You have a ton of expansive space. You're not budding an ocean out of the Pacific or the Atlantic on the coast. You're not running up against a series of mountains, but it's also the case that their regulations tend to be a lot laxer. It is easier to build a ton of different types of housing. You don't have the permitting processes that you infamously have in San Francisco. You don't have the same legal blocks to new development. That's why you see that in not just Austin, but in Raleigh, in North Carolina in Las Vegas, throughout the mountain states, you've just seen much more housing built in these places, and as a result, you have cheaper housing because you have more supply. T

hen you get to the fact that you said, when you're a middle-class family who's living in San Francisco, Los Angeles, New York, Washington, DC, Boston, these really expensive, productive rich cities, you're a middle-class family thinking, "We need more space and we can't afford it in this city. Where are we going to move to?" In all likelihood, you're going to move where the houses are and the houses are in the South and the West. Not along the coasts.

Brian Lehrer: Listeners, anybody want to help Derek Thompson from The Atlantic report this story? Anybody listening in Austin right now? Anybody with connections to Austin want to talk about the population boom there, the housing construction boom there, the backlash against the housing construction boom there, which we're going to talk about. Even backlash against falling rent prices, which talk about Keep Austin Weird. That's weird from a New York standpoint, or with a question for Derek Thompson about his article on this. 212-433-WNYC 212-433-9692.

Before we get to that backlash, and before we get to why The Wall Street Journal, for example, is decrying the fact that rents are falling in Austin. When we talk about the opposition to construction, not just in New York City, but in the greater metro area as well, there are three things that always come up, race, class, and neighborhood character. Whether anybody wants to say it or not, this does often have to do with race and class.

In white or more affluent neighborhoods, they don't want more affordable housing bills because they think there's going to be more crime or they just don't want to be with people like them. Then there's the neighborhood character issue which is, "Hey, my neighborhood is nice, it's low rise, it's private homes, it's brownstones. I don't want apartment towers blocking the light or making my neighborhood more dense and every subway stop more crowded and not enough seats in the local schools." All of those things. Do they not have those conversations in Austin?

Derek Thompson: They absolutely have those conversations in Austin, and I'm sure that if someone calls from Austin before you would ask that question, they're going to say, "I can't believe that you're not pointing out that we're having a lot of these conversations in Austin." Every single city that deals with an influx of domestic migration or international migrations, that's either Americans moving from New York to Texas or people moving from say, Mexico into Texas, change is destabilizing.

Change is weirding, and change is resisted, I would say, not only by the rich, as you said, the upper class, but it is often resisted by the middle and lower classes as well, just in a different way and without the same kind of political power to resist that change. For example, I think you could pick any number of small California towns that resist the construction of new apartments because they want to "maintain the neighborhood character".

That tends to be an example of the political power of the upper middle class or upper class resisting new apartment construction because they don't want traffic, they don't want new construction. They don't want new loudness. They don't want any kind of change in their area. We're familiar with that story from the upper middle class and the upper class, but often when new construction comes into a poorer area, we also worry about gentrification. What happens when there's change in this area, when there's new restaurants added and new apartments built that cost more than the existing apartment stock? We worry about gentrification.

I'm not trying to shift the conversation away from race and class in particular because obviously, these are incredibly important, especially as you tell the story over the decades, going back throughout the 20th century when Black Americans were just so obviously and structurally barred from buying houses and getting mortgages in America. Today I think it is all classes who have certain aversions to change and it's one of the reasons why I think NIMBYism can take hold no matter what the average income of that zip code is.

Brian Lehrer: We are getting a call from Austin. Here's Ami in Austin, you're on WNYC. Hello from New York and thanks so much for calling in today, Ami.

Ami: Thanks Brian. Thanks for having me. I just want to say, I grew up in New York and I've lived in Austin for 13 years and a lot of what they say is true and it is great that the rents are going down in the building and especially the concentration, but I think the speaker isn't really talking too much about the environmental impacts that we struggle with in Texas and in other Sun Belt states. In Houston, they have a lot of development, but during the hurricanes, the whole place flooded because it's all paved over, the wetlands are paved over.

Obviously in Arizona and places like that, the water issues, and even in Texas, the water issues are huge and we just can't necessarily support all the development. I think it's going to end up being a problem also at the end of the day that people really need to take and consider those environmental issues.

Brian Lehrer: Derek, you want to talk to Ami?

Derek Thompson: There's two issues here that I want to hold in tension with each other. On the one hand, the caller's pointing out that building large and dense cities in the South and in places like Phoenix and Texas incur certain risks either to environmental resistance as in Houston, or to water availability as in Arizona. I want to recognize those risks at the same time that I point out this other thing in the environmental calculus, which is that overall density is a friend of the environment.

If we have more people living in denser cities and denser metro areas, we tend to have a lower carbon footprint of those individuals. They tend to have to drive less and their electricity, and especially in Texas, where I believe they just set a new record for the renewable share of their electricity, tends to be more efficient. It's a tough overall calculation that I can't do live on the air here. When we're thinking about the environmental cost of building cities in the South, I just want to hold both these things side by side, environmental resilience and water issues on the one hand, but also the benefits of density for the environment on the other.

Brian Lehrer: Ami did he convince you at all?

Ami: I think it's a give and take a little bit, but I think that the fact in a place like Houston, there's almost zero zoning laws and when you go there you see how weird it looks, especially as a New Yorker. I think that yes, I agree that density is good and when they build here as opposed to the sprawl, which they also build and I think that's something that talk about because a lot of these cities are building a sprawl. Also about the density, the transportation, public transportation in Austin is way, way behind the population growth.

That's becoming a huge issue because it used to be like old Austin people could get anywhere in the city for 10 minutes and now it's a thing, but people don't take public transportation here. They drive and with the density, it's causing a real problem because you can do the math.

Brian Lehrer: Ami, thank you very much. Here's another caller from Austin. Tan in Austin. You're on WNYC. Hello from New York, Tan.

Tan: Hello Brian. Just a little background. I was born and raised in Brooklyn and I moved down to Austin for graduate school. I guess the main topic was--

Brian Lehrer: Glad you're still listening. Go ahead.

Tan: Oh yes. I'm also a contributor. I have my WNYC hoodie that I bring to school. [laughs]

Brian Lehrer: Cool.

Tan: Basically, I was talking to some of my faculty at school who actually moved here a few decades ago from Canada. They said that basically what we see as Rainy Street and Sixth Street, how there's always a party every other night and weekend, that used to not exist. The idea of keeping Austin weird, it was never quite weird to begin with. Then this was cultivated by external factors, by people coming in. People want to talk about maintaining a community, but this community never would've existed because as society, as humans, we progress and it ebbs and flows. This never would've existed if there weren't outsiders to contribute such as New York.

Brian Lehrer: From a housing standpoint does it relate? That's an interesting cultural analysis.

Derek Thompson: I'd love to actually jump in here because I'm actually very interested in this line of analysis that Tan is pointing out. There's no such thing as stasis in any human system. Sometimes NIMBYs or other people that are culturally conservative will say, "Keep things the way they are." Nothing ever stays exactly the way it is. You either have progress or you have things changing back in some other way. When you think about an idea like Keep Austin Weird or to keep any city weird, weirdness, I think Tan's trying to point out, weirdness is often maintained by or encouraged by the influx of new residents.

I lived in New York for seven years and I think about this with New York all the time. If it wasn't for immigration, the population of New York would've started declining decades ago. The growth in New York's population is almost entirely the result of immigrants. If you think about the question, who keeps New York fresh? Who keeps New York growing, who keeps New York dynamic? It's immigrants and that's part of what makes the city so wonderful. I think some of my favorite cities in the world, not just in the US but around the world, their weirdness, their character, their genius is created by migration. It's created by flux.

People who stand against flux aren't necessarily standing for stasis, which can't actually exist in the human system. They're actually standing for something retrograde. They're asking to go back in time. I prefer that cities not go back in time.

Brian Lehrer: Tan, thank you so much for calling. Brian in Brooklyn, hang on for a second. We're going to get to you. Somebody moved back to Brooklyn from Austin just recently and has a different comparison to make. I want to get your quick take, Derek, on one of the other aspects that your article touches on because if we generally think here declining rents would be a good thing, The Wall Street Journal reports, "Once America's hottest housing market, Austin is running in reverse," and Newsweek asks, "What's behind Austin's mass exodus?"

What's your take since you've cited those headlines on why The Wall Street Journal would be against this? Maybe they just want more profits for landlords and rising rents and is there an exodus that's taking place from Austin after the influx of people to it?

Derek Thompson: I'll answer the second question first because I think it's probably the easier question to answer. It is absolutely true that domestic migration into Austin has declined significantly over the last three or four years. I think it's too early to say that Austin as a metro area is shrinking. It's far too early to say that. It is the case that as Austin became much more expensive in 2021, 2022, that message was very much sent and received by people around the country who started looking at other places in the south and the west to move to like, for example, Raleigh or Phoenix or Las Vegas. The first question you asked is the one that I'm [crosstalk]

Brian Lehrer: By the way, just to put even a finer point on that, the fact that we are getting on this show right now, multiple calls from Austin, from people who used to live in New York and there are ones we haven't even taken yet. I could keep going on this longer than the amount of time we have, then it's an indication of what has happened. Right?

Derek Thompson: The path from Brooklyn to Austin is clearly well-trode. I would add that to the first question you asked, which is really about the magical thinking that Americans have about housing. I don't blame The Wall Street Journal author at all, really. I think in many ways, he and many other people are trying to reconcile two irreconcilable ideas that we have about housing in America. On the one hand, we want housing to be affordable and on the other hand, we want housing to always be appreciating faster than inflation so that it helps build us wealth. Those things cannot be true at the same time.

There is no such thing as any good that is appreciating faster than the rate of inflation and is always affordable. It can't be true at the same time. It's hard to reconcile these two things because we think of housing both as a necessity, which means we should hope that it's always affordable. In fact, we should hope that the prices keep going down, the same way that we should be happy when say, food and clothing spending is a lower and lower share of Americans' budget as it has been over the last 100 years.

On the other hand, we want housing to be an investment, which means it should get more and more expensive and rich and wealth-creating over the decades. It's impossible to have these two things at the same time.

Brian Lehrer: When you're already an owner, you want prices to go up, when you're not yet or you're a renter, you want prices to be down, which is the social good and there's the tension, right?

Derek Thompson: That is the tension but also I'll just say really, really quickly that many people are both homeowners and sellers. Within even the same decade, people are in the average house for, I think, seven, eight years these days. Again, I think even within a decade, the same family can hold both irreconcilable thoughts in their head. They should hope that their house appreciates over time while hoping that the next house they move to will surely be affordable. Again, it's very difficult to have both these things within the same housing paradigm.

Brian Lehrer: One more call. Brian in Brooklyn, who just moved back from Austin. Brian, you're on WNYC. Thank you for calling in.

Brian: Oh, thanks for having me. I'm a big fan of yours. We missed you the most when we lived in Austin. I [chuckles] do want to say that I think the affordability aspect of living in Austin when we first moved there, my partner's a lifelong New Yorker. I've lived here for about eight years. We moved there. The rental market was pretty unaffordable, not only what you get for your dollar, but also if you moved out, your security deposit is gone. You don't have any rental rights. Two of the three winters we were there, we lost heat for five to seven days and we were on our own.

We had to go find hotels. We ended up going to San Antonio. That was a huge expense. You don't have the renter protections. We bought a duplex there in the Springdale neighborhood. It was like a fixer-upper, but rentable out where you rented it out. We had to do some improvements and the rental market went wacky, and our property taxes went up from $5,000 a year to $9,000 a year. That's what the city said, which did not reflect what our house was actually worth.

Our experience in the rental and the buying market there is that the people who are buying houses are mostly corporate people who are trying to take advantage of people, and the people who are selling the houses, they just don't know, it's all a guess. They told us we could sell our house at 450 and we ended up selling it at 325.

Brian Lehrer: Whoa. No, thats--

Brian: We bought it at 392.

Brian Lehrer: Brian, thank you very much. Exemplifying the thing that Derek was just talking about a minute ago, as well as, I guess, there are corporate, or I should say, regional culture differences between New York and Texas as if we didn't know. Like fewer renter protections and things like that. We have one minute left in the segment. I want to get back to something that one of the earlier Austin callers mentioned, which is that they don't have as much zoning there.

We had New York City Deputy Mayor Maria Torres-Springer on the show last week and she said for the Adams administration, their big new affordable housing construction push is to ease zoning restrictions. Meaning, you can build higher in more places. Is zoning the key, or is getting rid of zoning the key to having more affordable housing? We have one minute.

Derek Thompson: There's no such thing as one key to unlocking housing abundance. Of course, zoning is an incredibly important part of the puzzle, but it's not just zoning. In some places, it's land use regulations. In some places, it's historical preservation laws. In other places, it's the eternal permitting processes of which I'm most familiar about in San Francisco and other places in California. In many places, it's very easy for neighbors to sue to block new development either through NEPA or other environmental rules. Then, finally, different areas have different cultures when it comes to the degree to which they root for new housing.

In some places, there is more of a push for new housing, and in some places, there's more NIMBYism and housing is only a priority in name and not in deed. Zoning is absolutely a critical part of the puzzle, but I would encourage people listening who want to unlock housing abundance to remember that this is a puzzle. There are a lot of pieces, and getting all of the pieces right is necessary to unlock the kind of abundance that we want.

Brian Lehrer: Derek Thompson, staff writer at The Atlantic, author of the Work in Progress newsletter, and host of the podcast, Plain English. Thank you for sharing this reporting on Austin with us.

Derek Thompson: Thank you.

 

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