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Tag Archives: Affordable Housing

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This is NOT a beautiful container home. This is what people are trying to avoid.

We have been reading more and more about various real estate options. Another topic we have enjoyed delving into is container homes, which are houses made of shipping containers. You might have seen some pretty funky ones in the past, but this article Russell found features some really elegant ones. This can be an option in some areas, depending on local zoning regulations.

There are some big plusses and minuses to these homes. They are very sturdy, when they aren’t compromised by too many openings, but dealing with moisture can be a problem, and they can be really loud in the wind. Want to learn more? Here’s a good article that details good and bad points to shipping container homes. (That article’ from a great site called “The Tiny Life” that you can enjoy after reading about the shipping containers to get more on tiny homes and their alternatives.)

A nanny cottage is like money in the bank, or can be.

More can always be learned about building additional homes on your property. We are really thinking this idea is onto something, though it might take some working on the Austin City Council to get the zoning situation taken care of. They want more dense housing, and this “backyard bungalow” idea would get them there!

We continue to educate ourselves on the issue of the affordable housing needs of so many people. It’s not just here. Russ found an article about Berlin freezing rents, because costs are rising so quickly.

So where are younger folks going to find housing? Madison, Wisconsin; Oklahoma City, Oklahoma; Omaha, Nebraska; and Grand Rapids, Michigan were found to be most popular by A National Association of Realtors survey reported by Bankrate. Another report cited by Bankrate said that affordable counties grew at a faster rate than un-affordable counties last year. How about that?

Perhaps we should look at some affordable counties!

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Do You Have Anything for Rent?

diagram of houe

We buy houses. We renovate houses. We sell houses or rent them out. But whatever we do has to make sense. Right now, it’s getting harder to buy rental houses in many Texas markets. That means it’s getting harder for tenants to find houses they can both afford and want to rent.

One thing Austin and Cameron have in common is a shortage of housing most people can afford. I’m avoiding the term “affordable housing,” because of the connotation of it being subsidized.

  • In Cameron, many teachers and other professionals commute in to their jobs because as even the school superintendent noted, “I could rent houses in the $900-$1000 range in no time.” There just aren’t many houses in that price range, and those that exist stay rented. We were able to relet one of ours before the previous tenants moved out.
  • In Austin, our available rentals seldom stay on the market for more than a few days.
  • Tenants are staying in place more than they used to. A few have even been asking for two-year leases or longer.
  • Nationally, many older folks (and young singles) are having to take on roommates to afford their rent, ala Golden Girls.

Why Are Rentals Scarce?

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What’s Happening in the Austin Area?

Inventory for February was 2.1 Months

Inventory has crept up by .1 months for the last couple of months, but we’ve got a long way to go until we have a stable [balanced] market in the Austin area.

The February 2017 Central Texas Housing Market Report released this week by the Austin Board of REALTORS® (ABoR) showed a slowdown in single-family home sales growth throughout the Austin-Round Rock Metropolitan Statistical Area (MSA) in February 2017, indicating that the Central Texas housing market is beginning to normalize to more stable market conditions.

—ABoR

What does that mean?

We are still in a seller’s market. Although inventory has crept up for the last couple of months, it remains weighted in favor of sellers. Even though the median home price in the greater Austin area increased only $10 from January, it was up about 7% over 2016, which in itself was a strong year for sellers.

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Responding to Market Pressures

Two dolphins jumping

What’s Flipper to do when rising prices hamper our ability to provide quality, affordable housing?

It’s been almost a year since I explained why I don’t like being called a “flipper.” I prefer “redeveloper,” not because it has more syllables, but because it better describes what we do. Then over the last few weeks, both Suna and I have written about the changing economic pressures affecting the redevelopment business model. These pressures and reviewing our core values have caused us to reevaluate our business model.

When we started this business, one of our goals was to provide quality affordable housing. We wanted to serve a market that was historically under-served in our area. We realized working people, and especially first-time home buyers are being priced out of the market. I mean, who can afford a “$250,000 starter home” working a $15/hour job?—which I remind you is still almost twice minimum wage.

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What Do Rising Home Prices Mean for Current Homeowners?

Trulia heat map

Austin is a very diverse market. Prices and trends vary tremendously by neighborhood. Even Trulia’s mapping by ZIP code doesn’t capture the details.

Current homeowners are in a much better position than are first-time buyers. If nothing else, current homeowners can continue to hold the house they’re in now and watch appreciation create wealth. But for many of these people, appreciation is a double-edged sword. Yes, it increases the value of their home, but it also increases the property taxes they have to pay each year.

Current homeowners are also more likely to be in the upper half of the income distribution. That means they can afford a higher payment and the ever-increasing tax burden, which could increase their monthly payment every year. [As a side note: don’t think you avoid property taxes by renting. You still pay your landlord’s property taxes; you just don’t get to deduct them.]

Finally, current homeowners can roll the equity in their homes (garnered through payment and appreciation) into their next home purchase. If they need (or want) a bigger home or one in a more expensive neighborhood, that equity helps them keep their monthly costs down by providing a larger down payment.

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