I have recently heard campaign rhetoric and seen newspaper reports by city and county leaders about the need for affordable housing. It is interesting to hear politicians and economic development persons talk about providing affordable housing.
I was a successful homebuilder in Houston for 39 years. I have seen the price of houses rise and fall several times in my career. However, all the cycles are the result of the laws of economics or a gross over or under estimation of future economic cycles.
Concerning Kerrville wanting more affordable housing now. Here are the cold hard facts of a demand and supply economy.
1. Land prices are higher
2. Interest rates are higher
3. Infastructure cost are higher
4. Unemployment is below 4 percent and there are fewer migrants available for jobs. Thus labor is higher.
5. Materials are higher due to the bustling economy, tariffs, and the price of Canadian lumber.
Considering these factors, how can developers and builders come to Kerrville and build homes lower than the prices we see today?
I heard city council candidate Gary Cochcran that the city could “incentivize” developers. I think any incentive to a builder or developer is a bad idea and will lead to substandard developments and substandard homes, not affordable homes. The city needs to be a governmental body and not a partner with a developer or builder.
In housing booms as we are seeing now, it drives some would-be buyers out of the market and they become renters. This is not a bad thing. It’s better they rent than buy a house they can’t afford to own. Today at loop 334 and Singingwaters Dr., there is a 110 unit apartment complex under construction. This is a better solution for affordable housing than subsidizing builders and developers.
Ronny Carroll, Kerrville