January 23, 2008

Loving Jennifer

Ok, kids... local politics time. Councilmember Jennifer Kim is running for re-election this May. We've talked about some of her antics before but over the last year or so, she's become the kind of councilmember that many of us who supported Margot Clarke hoped she'd be. Yeah, she's had some pretty big PR gaffes but that's only because she doesn't have my head on her shoulders. Will's had them as well and I think many will remember Lee Leffingwell's captivating performance at DFT during the fight over the ballot propositions in 2006.

Needless to say, our electeds at the muni level are human. Like the rest of us. Which means they screw up just like you and me. Sometimes to embarrassing effect.

Beyond that though, Kim's stood up for Austinites time and time again. Her opponent, Randi Shade, seems like a reasonable and decent person. That being said she has a stink on her that won't go away. It's the same one that's starting to emanate from Will, that of tolls and overbuilding luxury condos downtown.

If I'm elected, I'll work to solve our traffic problems, keep our air and water clean, keep Austin affordable for middle-class families, deliver reliable and efficient city services, and restore the community's trust and confidence in City Council Place 3. We can do better, and with your help we will.

This all sounds great, but it's the SOS we get every cycle from candidates. 'Solve our traffic problems'? How'd you like to do that without money from the Lege? Keep Austin affordable for middle class families? OK, what part? Maybe plant all the middle class folks in the outlying areas while the Council and city staff work diligently to Manhattanize central (and no, this isn't an 'anti-density' rant... this is an anti-stratification rant, OK M1EK?).

None of this is to say Randi's a bad person. However, it's pretty clear that she's fallen in with people that have convinced her they have the right answer. The same folks who have proven political poison for many. I'm talking about the Chamber and the people who control endorsements for the service unions. It isn't really the firefighters who endorsed Randi. It's the people who finance those organizations. The same folks also endorsed Cid Galindo. We talked about him here. He's also managed to raise $7,350 in contributions from just 22 people. Impressive isn't it? He says the donations are from a 'broad spectrum of Austinites'. I don't know about you, but I'd like to see any 22 people who could be called a 'broad spectrum of Austinites'.

Shade and Galindo, while I'm sure they're nice people, as candidates are nothing more than the same old bullshit piled a little higher.

And I'm goddamn tired of seeing tall piles of bullshit.

Posted by mcblogger at January 23, 2008 09:14 AM

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Comments

You should avoid the knee-jerk reaction that downtown condos will increase "stratification" just because they are expensive.

Central Austin is rapidly stratifying even without the new condos. E.g., there are some small bungalows in Zilker listed for 400,000 or more. The only way to restrain future price increases is to add lots of new housing in central Austin. 800+ new condos per year downtown for the next few years will fit the bill.

Also, families with children who want to live in central Austin must compete with singles and and childless couples for the limited single-family housing. The families with children might not be interested in the downtown condos. But the condos will draw some of the singles and couples who otherwise would have been competing for the Central Austin SF housing.

Posted by: AC [TypeKey Profile Page] at January 23, 2008 10:13 AM

AC is right – I bought my house in Crestview in 1997 for 91K. Even before I added two bedrooms in 2003, the value had doubled, and now Zillow.com tells me it's worth $350,000. I never thought I'd live in a $350,000 home, but apparently I do. A block away, a teeny little 2-1 (what mine was when I bought) is on sale for $300K.

Posted by: Lee Nichols [TypeKey Profile Page] at January 23, 2008 10:42 AM

AC has it mostly nailed but he's more optimistic than I am - I don't think 800 condos per year downtown is enough, when the ANC and Laura Morrison's crew have put policies into place which will result in a net DECREASE of housing units in the close-in neighborhoods (severely penalizing garage apartments and duplexes which were the only remotely affordable housing extant, while vigorously fighting any new development even out on the arterials).

If the only place we allow any increase in density is on the most expensive land in the city, you'll get your stratification. As AC notes, you'd have it even worse without the new condos, but if you want to really get rid of it, fighting the new condos is the wrong battle - you should be fighting the ANC's efforts to weasel out of their end of the McMansion quid pro quo.

Posted by: mdahmus [TypeKey Profile Page] at January 23, 2008 11:15 AM

No, no... I'm fine with dense development. However, I see the loans coming DAILY and I'm declining the lions share of them because the market is saturated at the top end and prices are declining. Even Core Logic is reading it. Hell, I'm surprised we haven't been slapped with a declining market hit to LTV's because of rising default levels in Central. That's the issue.

Look, y'all. I'm a banker... I hate the idea that prices will find their own level based on turnover and FC. I'd rather see a strong mix. Where are the three bed condos in the 150-225 range that many two income families could afford? Where are the even more affordable units that lower income folks can afford? That's what we need more of.

I'm fine with 2,000 new condo units downtown. Let's just make sure that at least 50% of them are affordable, not the 400k 1 unit lofts we've seen so much of.

As for the ANC not wanting a massive condo building next to SFR, gimme a break. We had this discussion and this isn't even an issue in Manhattan where there is still significant SFR housing.

At the end of the day, we have a very narrow window in which we can set our path forward. Do we want an downtown where every income group can afford to live, or do we want a Manhattanized downtown were only the very wealthy can live? I see more concern from Jennifer for that than I do from Shade.

Posted by: mcblogger [TypeKey Profile Page] at January 23, 2008 01:58 PM

AC - one other thing... the valuation models we use to track FV all indicate that sales of condos, while not apples to apples, are having a significant impact on SFR in Central Austin. It's just reality. Prices on one type of inventory are in effect driving prices in other types of inventory in a kind of feedback loop.

Posted by: mcblogger [TypeKey Profile Page] at January 23, 2008 02:07 PM

"I'm fine with 2,000 new condo units downtown. Let's just make sure that at least 50% of them are affordable, . . ."

Then there will be none. No one will build $400/sq ft condos just to give half of them away at $150/sq ft.

And how do you square these two statements:

"I see the loans coming DAILY and I'm declining the lions share of them because the market is saturated at the top end and prices are declining."

with

"Prices on one type of inventory are in effect driving prices in other types of inventory in a kind of feedback loop."

Is the point of your first comment that the (alleged) overbuilding of high-end stuff is posing a risk to Austin's SF market? That's not a rhetorical question. I'm just not sure I understood you.

Posted by: AC [TypeKey Profile Page] at January 23, 2008 07:09 PM

"Where are the three bed condos in the 150-225 range that many two income families could afford? Where are the even more affordable units that lower income folks can afford? That's what we need more of."

Again, you're not going to see those on the most expensive land in the city. That's the whole point of bringing up the fact that we need to support density in some other places than just downtown - or we're going to have to come up with hundreds of millions of dollars to pay for some very expensive affordable housing.

There's apartments being converted to condos in my neighborhood going for low 100s. (Not 3 bedrooms, of course, but still). And that's in an area with artificially restricted supply. Shows how much land cost has to do with affordability, IMO. (I bought a 2/3 bedroom condo in Clarksville in 1997 for sub-100K also - you don't have to go very far from downtown before land costs, although still higher than the burbs, are low enough to support reasonable priced units).

Posted by: mdahmus [TypeKey Profile Page] at January 24, 2008 10:20 AM

I'll grant you that, but you'll also have to admit that this speculative boom has done much to drive of the price of land in the Central Austin. The City's done little to stifle that, even though steady growth is better than the kind of speculative boom we're only now beginning to feel the hangover from.

Posted by: mcblogger [TypeKey Profile Page] at January 24, 2008 11:33 AM

AC - Sorry, you're comment got trapped. The latter statement was related to the runup in values. The former is related to the market as it exists today.

And yes, you can build cheaper than that. Not everyone needs a granite kitchen:)

Posted by: mcblogger [TypeKey Profile Page] at January 24, 2008 08:32 PM

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