What's for sale in central Austin? (2/07 edition)

Another in a perhaps-monthly survey.

My search results (run on 2/28/07) are below.  Here are the parameters I used:  1400+ square-foot; single-family; active MLS listing; $300,000 or less.  (See here for an explanation.) 

South Austin (MLS areas 6 & 7):  There are three 1400+ square foot, single-family homes listed for sale for under $300,000.  The largest has 1529 square feet.

North Austin (MLS areas 1B, 2 & 4):  There are 18 such houses, most in the Crestview, Wooten and Highland neighborhoods.  There are none in the rectangle bounded north-south by 45th and Town Lake and east-west by I-35 and MoPac. 

East Austin (MLS areas 3 and 5):  48.  (This total includes a dozen or so east of Springdale, near 183, which some people may not consider "central Austin.")

Comments

[fastmole]

I'm not sure I understand the implication here. Single family houses are expensive because the neighborhood groups won't allow more multifamily? I don't get it. Restricting a use (Single Family homes cannot have McMansions, Super Duplexes or Multifamily) should drive the price down. Constricting supply (not enough multifamily outside of downtown) should drive the price up.

If you want to declare that zoning causes an increase in the price of housing (all types) I can agree, but when you limit it to single family, I disagree. The supply of single family housing in Central Austin will only decrease.

[M1EK]

fastmole,

I don't think he's saying what you think he's saying. He's been arguing that the supply of single-family housing is essentially fixed and so those neighborhood associations who claim to support affordable housing but fight multifamily development are liars.

These posts are datapoints to back up the "because the supply can't increase, the price has long since left 'affordable'" statement.

[AustinContrarian]

fastmole,

This really is just a quick-and-dirty look at affordability, in this vein (http://austinzoning.typepad.com/austincontrarian/2007/02/irreversible_un.html). I'm not making cause-and-effect claims in these surveys.

For the record, I don't claim the McMansion ordinance has caused these steep price increases. I've always suspected the McMansion ordinance will hurt the value of small lots relative to large lots. I don't know that it has; any effect has probably been overwhelmed by the across-the-board increase in demand.

Neighborhood tactics have increased the price of single-family homes in at least two ways. First, neighborhoods have resisted an increase in dense, owner-occupied multi-family (condos and townhomes). Condos and townhomes are a pretty close substitute for single family homes; if you restrict the supply of one you drive up price of the other (as you note).

Second, neighborhoods oppose increases in single-family density. As lots become more expensive, we should gradually allow homeowners to shift to smaller lots. But there are few places in the central city where you can do that.

(BTW, there has been a steady if small increase in the number of single-family homes in central Austin for the last six years; I doubt we'll see a decrease in the number of single family homes.)

You are right that restricting uses generally hurts a property's value. McMansion limits, impervious cover limits, and restriction to SF all tend to reduce property value. Some (but not all) of these also constrict the supply of competing housing, though, so it's a question of which effect dominates. Given the spiraling prices in central Austin, I'd guess that supply restrictions have a bigger effect than use restrictions.

[fastmole]

I guess my point is that neighborhood protections do limit the price of single family homes in Central Austin. You bring up splitting large lots into small lots, and I agree that is a protection that reduces supply of SF homes. But for the most part, the supply of SF homes is artifically low, because more profitable uses are denied to the property owner. I think Rainey Street is a perfect example. The prices of those houses doubled overnight once the restrictions were removed, and within a year or two, they will all be gone. Replaced with multifamily. That the prices only doubled was because owners were already speculating that someday the area would be rezoned. Most of these homes had fallen into disrepair because no one wanted to invest in a home that would just be turned down as soon as the property was flipped. There were one or two homes that were built in the last 5 years. Here the homeowners got a lot at below market rate because of the restrictions. You don't see single family homes going up anywhere else in downtown. Now that the restriction have been removed, there will be no more single family homes built. Just across the freeway in the East Cesar Chavez area, there are plenty of new homes being built. As the lots overtake the existing houses in value, the old ones are razed and new luxury homes are built (On riverview there are $600k homes going up next to 400 square foot shacks.) If you allow these lots to build quadplexes or midrise condos you will see the bulldozers sprint to that part of town. Citywide, the overall effect might be cheaper housing, but nothing will be as affordable as the 400 sq ft shack. And if any new single family homes get built they will be million dollar plus homes.