Freeing up space for others
Katherine Gregor at the Chronicle covered the opening of the 360 condos in downtown Austin last week. Embedded in the ogling coverage of the “thirtysomething lovelies” was this interesting fact: 75% of 360’s buyers are Austin residents. 360 has 430 units, which means that Austin residents have taken around 320 of the units.
This confirms a point I have made before. It’s a counter-intuitive point, I admit, but then it’s usually taught only in courses on quantum mechanics — and, in fact, was confirmed just last year after exhaustive high-energy particle experiments at the Fermi supercollider: Downtown condos buyers don’t vanish into another dimension when they can’t get a loft downtown. They remain corporeal. They continue to occupy space. They live somewhere else.
For 320 of 360’s buyers, that “somewhere else” has been Austin. Where in Austin? We don’t know for sure, but my guess is that condo buyers who can afford $300,000+ condos and condo association dues of $0.33/s.f. probably haven’t been living at the Bachelor Arms. Given their their proven willingness to pay for being near the action, most probably haven’t been living in the ‘burbs. More than likely, they are vacating housing in central Austin.
The new supply 360 has brougt on line will open up at least 320 other units in the Austin market, either owner-occupied or rental. That is a lot of new housing. If you want something to measure that by, there were fewer than 300 home sales in all of central Austin in March 2008 — and that includes 10N and 10S, which most people don’t consider “central” Austin.
The best thing you can do for young families is to give their competition — the affluent singles and couples without kids — options for other housing. That automatically gives families with children a better shot at getting into central Austin. That’s a better strategy for getting families into central Austin then mandating affordable housing in condos that cost several hundred dollars per square feet to build. Thus, even if the sight of a thirtysomething hipster makes your leg twitch and triggers an autonomic sneer, recognize that these condos help the housing market (unless you think housing should be more rather than less expensive). Welcome the condos. Don’t bash them.
PS: I know there are plenty of singles and couples who want a single-family home and would never, not in a million years, not with a gun to their heads, ever consider buying a condo. That’s OK. Really. This isn’t a criticism of individual preferences. I’m talking about aggregate effects.
