I’m not sure what to think about East Austin. I still don’t recommend it to investors, though I know many investors have done well and are doing well there (selling mostly to other investors and brave young buyers), and I have friends who’ve invested there. One friend of mine purchased a 2 bedroom home a year ago for around $120K. He put $25K into it right away, fixing up the kitchen and bathroom and other cosmetic issues, and then rented it for only $650/mo to a couple of waitresses chasing cheap rent. Those numbers don’t work for me, but the tiny place is probably worth close to $200K now, so he’s thinking long term appreciation.
Also read : Is Rental Property Investing in Austin Still Profitable?
I myself have made at least a half dozen serious trips into East Austin the past year, previewing homes and making sure I’m not missing out on deals I should be recommending to my investors. Each time I do this, I see nothing that comes close to making sense for the type of investors we typically work with. Our typical Austin investor wants a clean newer home located in a popular, reasonably close-in suburban area with good schools that will attract quality renters. Basically, family neighborhoods with good schools where you see Moms pushing jogging strollers, kids riding bikes and Dad jogging with the dog. Think Circle C and Steiner Ranch for example.
Some of our investors are looking for rehab projects, but those have become nearly non-existent in Austin at prices that make the risk worthwhile. You have to seriously bird-dog for these deals now, and there are a lot of bird-doggers out there trying to beat you to the next deal. It ain’t like it was in the 1990’s when you could pick up fixers in Austin for a price with plenty of upside in the after-repair value. Everybody’s an investor now and the young couples and weekend warriors have skewed the economics of the rehab market by paying too much for beat up properties.
Sure, they live in it for a couple of years and do ok with the Capital Gains exclusion two years later after they’ve chipped away at the remodeling. Then they can take their tax-free nest-egg and pay too much for another fixer and do the same thing. But the discount on fixer homes is now often less than the cost of bringing it to full after-repair market value. A paradox that baffles me still.
In other words, I see houses that have an after-repair value of $450K, and need $100K in rehab to bring it to $450K value, and those homes sell as-is for $400K. So, to buy fix and flip something anymore, you almost have to live in it for two years (to allow appreciation to help out) or really know what you’re doing if you’re going to create a rehab that will pay for itself with some profit left over. There are ample fixers in East Austin and I frankly can’t believe the prices that people are willing to pay for them. For those of you succeeding in that niche, my hat’s off to you and you’re probably working too hard.
Back to East Austin – several issues have caused me to remain cautious about East Austin. 1) The schools are underperforming and that’s not going to change anytime soon, 2) Government Housing projects dot the area and will remain there forever probably, 3) Rent-to-Sales value ratios are worse than Austin in general and 4) most homes are in bad condition and/or over-priced for long-term rental investment purposes. From a more anecdotal perspective, much of East Austin remains very rough looking and I have yet to see Moms pushing jogging strollers in East Austin. I won’t go into the crime and prostitution, but that’s all still there too.
Now I have a new item to add to the list – The City of Austin is contemplating Land Trusts. The Austin Statesman published this story the other day (posted below also) explaining that the city wants to stem gentrification in East Austin by allowing people to sell the land under which their home rests, thereby unburdening those home owners from property taxes on said land (which they would no longer own) and keeping their home affordable so they can remain in the neighborhood. Where is the city going to get the money to subsidize the removal of these properties from the tax rolls? – from you and I. Here is a map of the area in which the City of Austin wants to do this.
Personally, I want to invest in areas where market forces can operate freely and equally on all real estate in that area. A rising tide should float all boats equally. Motivating people through government meddling to stay in rundown housing long after they might otherwise have cashed out interferes with the normal process of gentrification. I know, we think of gentrification as a bad thing, but the fact is it brings renewal, rejuvenation and investment to blighted areas.
Now, if Land Trusts are indeed put into place in Austin, I wonder how that might affect investors who are contemplating the risks involved in purchasing that very ugly beat up East Austin home with plans to invest $50K to $100K in it’s rehabilitation. What made little sense to me before now makes even less sense.
Without Land Trusts, part of the investment equation is the assumption that eventually most of the other beat up ugly homes will be bought and rehabbed, thus improving the aesthetics and desirability of the neighborhood, and eventually allowing the investors/risk takers to profit and make way for the more permanent residents who want to make the area their home.
If you’re one of the first to take a gamble on a rundown area, you’ll benefit down the road as others become brave enough to follow your lead. This is what has been happening in East Austin over the past few years in particular. This is what started happening off South Congress and South 1st Street about 10 years ago and now those areas are considered very desirable. Many assume this is what will happen in East Austin.
With Land Trusts, as I understand them, your rehabbed home might forever stand alone on a block of junkers if it so happens that those homeowners elect to take the Land Trust deal and don’t have to pay property taxes on the land value like you do. Your risk becomes greater and you may decide it’s not a risk worth taking. I know that’s what I would be wondering if I were contemplating investing in an area with Land Trusts in place.
You might also like to read our post about Austin Real Estate Investing – Then and Now
It will be interesting to see if the City of Austin follows through with this plan and what effects it will have on what is currently a very active and natural real estate renewal process in East Austin.
Below is the text from the Statesman article:
East Austin homestead-preservation district still isn’t a reality
City is stalling to avoid loss of tax base, housing advocates say.By Sarah Coppola
AMERICAN-STATESMAN STAFFPaula Simpson has lived all of her 50 years in East Austin. Her ancestors settled there, and many of her family members still call it home.
But Simpson has seen family and friends leave recently, too, driven away by high property taxes or big home resale offers as a development boom continues east of Interstate 35.
“All of a sudden, East Austin is the golden egg, and developers want a piece of it,” said Simpson, who runs a child care business from her home. “I want to make sure that I can stay here and my kids and grandkids can stay.”
Simpson is encouraged by a law that state Rep. Eddie Rodriguez, D-Austin, got passed last year to set up a homestead-preservation district in East Austin.
But city officials say the law, passed in May 2005, needs fine-tuning before it can be used to buffer East Austin homeowners from rising property taxes as intended.
The law’s aim is to build affordable housing in East Austin and help low-income homeowners there stay in their homes. It would plow some tax revenue from new, high-priced development back into affordable housing and allow existing homeowners to keep their homes but sell the land, which would reduce their property taxes and allow them to pay for repairs or other expenses.
The law could have taken effect in September 2005. But the Austin City Council must adopt the district first, which it hasn’t done.
City officials say the law has major flaws that must be fixed in the upcoming state legislative session, Rodriguez says he’s agreed to most of those changes.
Housing advocates say city officials are stalling because the law would require Austin to set aside a potentially big chunk of property tax revenue for affordable housing.
While the city waits, advocates warn, more residents are being displaced.
City officials “need to get over their fears and put this tool in place,” said Mark Rogers, who runs the Guadalupe Neighborhood Development Corporation, a nonprofit group that builds affordable homes and apartments in East Austin.
The rough boundaries of the district would be Manor Road, Airport Boulevard, Town Lake and Interstate 35.
The law would let the city set up an East Austin land trust. The city could either buy vacant land and build housing on it or buy the land beneath existing homes. A homeowner would retain ownership of the house and would have to pay taxes on only the home, not on the rising value of the land.
Homeowners who can’t afford to keep up or repair their homes might use the money from the land sale for that, Rodriguez said.
Eligible homeowners would be folks who earn a maximum of about $50,000 for a family of four and $35,000 for a single person, which is less than 70 percent of Austin’s median family income.
Housing that’s part of the land trust would remain affordable in perpetuity because the trust would mandate resale to low-income families.
“The problem right now is, you build an affordable home, and a family qualifies for it, and two years later they resell it to realize the value of the land. The land trust is a way of sustaining the affordability in the long term,” Rodriguez said.
Margo Weisz, executive director of the Austin nonprofit group PeopleFund, said other cities have created successful land trusts. The oldest began in Burlington, Vt., in 1984 and now contains 400 homes and 1,600 rental units.
An East Austin land trust “probably won’t happen in big, widespread pockets,” said John Henneberger of the Texas Low Income Housing Information Service. “There will be homeowners who won’t want to participate. I don’t think we’ll see the trust cover large portions of East Austin.”
The city could also add rental units to the trust. That’s exciting for projects such as the city’s redevelopment of Plaza Saltillo, Rogers said, because “dozens and dozens of units could be maintained at affordable rates.”
Money to finance the trust would come from the increased property tax revenue generated by East Austin’s development boom. The city would basically have to use that extra revenue to buy or build affordable housing for the trust instead of putting it into Austin’s general fund for basic city services.
If the preservation district began today and the city collected $10 million in East Austin property taxes this year and $15 million next year, it would have to use the difference, $5 million, to maintain the trust andbuild East Austin affordable housing.
“The very thing that is causing the problem and displacing people — a lot of new development — will be used as a funding mechanism to counteract the detrimental effects. That’s the stroke of genius in this bill,” Rogers said.
The city could also use money from the $55 million affordable-housing bond proposition that passed this month to add land and affordable homes to the trust.
Council Member Mike Martinez said the law should be amended so that the city has to contribute only some, not all, of the extra tax revenue. Rodriguez agrees that the percentage needs to be changed.
Another option would be to require Travis County or the Austin school district to add some of its increased tax revenue to the pot so the city won’t shoulder the whole burden, Martinez said.
The law also needs to be tweaked, Rodriguez said, to let the city use the money to pay for infrastructure, such as utility lines or sidewalks, near new affordable housing.
The City Council will adopt the district boundaries by the end of the year, Martinez said, so Rodriguez can go back to his colleagues and seek changes to the law.
“It would give him leverage to say, ‘Austin’s ready to do this; let’s make the amendments,’ ” Martinez said.
The law would also let the city set up a land bank, which would give Austin first dibs on parcels of vacant East Austin land that are about to be foreclosed. The city would have to build affordable housing on those parcels.
Martinez hopes to extend that right of first refusal to older homes, not just land, that come up for foreclosure, so the city can gain affordable housing units.
It remains to be seen whether the district will work. Other ideas to help low-income East Austinites gain or retain housing have languished. Former City Council Member Raul Alvarez, for example, championed a plan to help longtime East Austinites stay in their homes, but it never gained much steam.
Simpson said she likes the principles behind the bill but disagrees with some details.
“I’ve bought and paid for my home, and I don’t want someone else owning my land,” she said.
As you know, I’m also skeptical of land trusts.
But isn’t there an argument that land trusts will actually inflate the value of other East Austin property? Land trusts will discourage incumbent owners from moving (if I understand the setup). Fewer homes will be put on the market, effectively restricting supply.
Your point is that rundown properties that are “land trusted” will remain rundown, hurting a neighborhood’s long-term attractiveness and dampening demand. That’s what we should expect if land trusts work like rent control. There’s at least a superficial similarity (again, if I understand land trusts). Both create powerful incentives for the incumbent residents to stay put.
Rent controlled properties tend to deteriorate because the landlords don’t have an incentive to maintain them, much less improve them. Renters don’t have an incentive to do much, either, since the landlord would capture some of the value of any long-term improvements.
Will land-trust homeowners act like rent-controlled renters? It’s not clear, at least not to me. If they retain the right to sell the house for whatever price they can get, they’ll have an incentive to maintain and improve the structure, since they’ll see a return on that investment. They’ll also have the capital to make that investment, courtesy of the City. On the other hand, if the City caps the sales price, either directly or indirectly through affordability limitations, then this might hurt the incentive for long-term improvements. (I guess if the City permits unfettered resale, then what’s the point of land trusts? The homeowner will be able to sell the structure for the fair market value of the property as a whole.)
Oh god, this is such B.S.
Very similar to all the whining about affordable housing downtown. Let’s take money from the rich and help out the poor ahem… lazy so they can enjoy the same benefits without improving their own lives and making more money.
What the numbskulls who crated this scheme don’t realize, is that there won’t be any more new development to fuel their ambitions. No one wants to risk building a condo building next to a perpetually trashy neighborhood, since few people will want to buy it. East Austin will stagnate and they’ll all be wondering what went wrong.
Or…the very people they’re trying to protect will not participate b/c they’ll realize they can make much if the whole neighborhood holds out longer and makes a bigger profit.
Hi Contrarian:
> But isn’t there an argument that land trusts will actually inflate the value of other East Austin property … (by) effectively restricting supply?
I’m honestly not sure what will happen, but I suspect there could be a dis-investment in the area as investors move Capital to areas unecumbered by government interference. Real Estate investing is risky enough without having the government creating artificial variables to consider and try to predict.
I really don’t think it’s a bad thing when when an area long in decay is able to turn a corner that causes re-investment of capital into that area. The new businesses and restaurants that follow that investment are counting on the demographic changes that also naturally follow the re-investment in an area. Businesses that seek to cater to the new demographic may pause and think twice about their investment if they start to doubt whether the demographic trend will indeed continue.
Then we haven’t even talked about the potential for fraud and abuse of what is essentially a new government entitlement program. How will they monitor whether owner-occupants aren’t just renting out the house to friends or relatives and collecting mail a couple of times a week?
I think it’s prudent that the city is “dragging its feet” on this as there are a lot of unanswered questions.
Steve
They’re not making any more land. This land is close to downtown, within a mile of the Capitol. Getting around town takes longer and longer. The value’s in the land and in the location, not in the improvements. People used to be told they were crazy to buy in Clarksville, Hyde Park, and Travis Heights. Look what’s happened to them. People from outside Austin and even more so from outside Texas see the value that others are blind to.
I’ve lived for the past 16 years about a mile and a quarter due east of the capitol in the Chestunut neighborhood and have seen a lot of changes. (I also see mothers with baby carriages, occasionally, btw, though we have more than our share of singles and DINKS.) Prices right now ARE too high in East Austin for investors. The only reason to buy here is if you want to live in the house for a few years or more, live close to downtown, not commute (I’m at work door to door in ~ 8 minutes), and enjoy the urban amenities that come with being this close to everything in the center.
Also, the Featherlite development might change the investment outlook if the commercial fills in. It’s hard to say what that will finally look like, but they’re starting at least part of it now. And the crime problem which in the past has been truly significant has diminished quite a bit. I used to see hookers and drug dealers on the street literally every day. Not often, now.
Either way, the land trust idea is too little and probably ten years too late to accomplish its goals, and at this point would be a bad idea (that’s speaking as someone who might even benefit). If the City has so much extra money to spend over here, how ’bout after-school programs for those kids in underperforming schools (they do suck, my kid went to them) or physical improvements like extending the hike and bike trail north of 12th street?
The market is transforming this neighborhood, not in the way that everybody wants, per se, but in ways that are an improvement. If the investor class can’t figure out why, well, then that’s why they call it the Invisible Hand. Best,
Hi Scott,
> the land trust idea is too little and probably ten years too late to accomplish its goals, and at this point would be a bad idea.
I think you’re probably right. The amount of momentum already in play in East Austin seems unlikely to stop at this point. You make an interesting comment about “10 years too late”. We can only ponder and guess, but I wonder if things would be as they are today in East Austin if the land trust program had been implemented in the mid 1990’s and widely adopted by established residents. Perhaps the proximity to downtown trumps everything eventually, but I still have a hard time getting a grasp on what the effects would be of essentially creating two classes of property in an area.
Steve
This post is included in our favorites for the week at Austinist. . . even if I don’t totally agree with you about East Austin real estate.
Thanks. I appreciate that.
Steve
Speaking of the Featherlite tract, the bulldozers started clearing land behind my house literally today, btw. If they fill that in with commercial and a rail stop at 19th and Boggy Creek, that could also change things.
Hi. My wife and I are two of the brave few. Our street (in 78702) has drug dealers, prostitutes, AND joggers and couples with strollers. Best of all worlds.
I don’t entirely agree with you, but I do agree that much of east Austin is overpriced for investors. However, if you are young and single – or maybe just childless – and plan on living here for a few years, I think there are some great deals. I live in a newly renovated 3 bedroom 1950s house that I bought for under 140k. The lot has century-old oaks, is across the street from a golf course, and is over 13,000 sq ft.
I moved back to Austin last year after spending five years in an urban neighborhood in Washington, DC. We moved here partly because in those five years we were completely priced out of real estate in DC. When I moved in there were drug deals going down in the alley under my apartment window, when I moved out the streets I had once been scared to walk down at night for fear of getting mugged had been totally transformed. We bought in East Austin in the hopes that the same thing would happen here, and I feel confident that it will.
There is no reason to approach the East Austin real estate situation primarily from the perspective of investors. It is young families, young single people and empty-nesters who put a premium on downtown living that will keep the momentum going (and in my experience new retail will light a fire under everything. many people just don’t have the vision or patience to buy or move in until the promises have been fulfulled). Let the investors buy in Pflugerville.
I don’t know if I’d quite compare the slow evolution of East Austin to DC’s rapid gentrification. I also recently returned from the District after ten years there – and I assume the neighborhood you’re talking about is Columbia Heights? Trust me, the drug dealers are still there, they’ve just moved east and north a little bit. The ‘rapid’ change you witnessed along the 14th Street Corridor reflects a broader change to the entire metro DC area. Back when I first moved in, Adams Morgan was much like you described. And believe it or not, the far west end of M St in Georgetown, down near the Key Bridge, was even dicey. They changed slowly, and once the rents ran up in those areas, Columbia Heights became the new frontier, primarily because of its proximity to downtown and completely despite the lack of public transportation in the area. It created a new class of (largely car-dependent) wealthy young city dwellers, who ten years before would have opted for the metro accessibility offered by the Arlington neighborhoods. What’s next? Probably the Trinidad and Waterfront areas of Southwest, as the city government begins to re-focus its attentions on building of the new baseball complex.
Austin does not = DC in this situation. The big difference is money. The District experienced a HUGE surge in income because defense contracting firms have been raking it in hand over fist, so suddenly many people at once were able to afford rehabbing close-in neighborhoods. (And hey, that may dry up and disappear soon due to the shifting political climate there, halting the incredible ‘progress’ that has been made over the past decade.) Other than people like us who move from overpriced areas and buy because we’re floored by the relative bargains available, Austin just doesn’t have an opportunity for that kind of monumentally sudden cash infusion. And if it does come, odds are good it will go. Look at what happened here in the early 1980s during the oil bust, and again in the early 00s with the tech bust.
That said, I think the infusion of folks from the East Coast who are stunned at the proximity offered by the Eastside could impact the way people here view the appeal and necessity of that drive from Pflugerville, Buda, Elgin or wherever people are living these days.
My husband and I recently purchased a home in East Austin. We bought a 1930’s home in the Chestnut neighborhood for around 130,000. We purchased the home with the intention of fixing it up. Before we bought our house it had been partially renovated, but the work completed was very poorly done, so we are having to redo almost everything. Our original intention was to complete most of the major work on our own to cut down on the expense, but it has been almost a year since we moved in and we are starting to get frustrated by the lack of progress. We are currently considering having the major interior work done by a contractor; However, we want to make sure that we do not put more money into the house than it is worth. I realize that the bulk of this article focuses on the negative aspects of purchasing a home in East Austin, but I am hoping that we will get both positive and negative feedback.
Thanks
Hi M,
Good luck with your house. I remember well how frustrating a remodel project can be.
You’re correct to be aware of and try to avoid “over improving” your home. The best way to avoid that is to find out what the “after repair” value of your home will be. Subtract from that what you currently have invested in the home, then add back what it will cost to complete your repairs. If the total cost exceeds the finished value you may want to re-evaluate your contemplated upgrades.
Sticking to kitchen and bath improvements usually brings the best improvement in value, provided the work is done well.
Contact us direct if you’d like a CMA done for you.
Thanks
Steve
This is a very interesting discussion here, because I recently read an article in Dwell magazine that perked my interest in East Austin. I currently live in the Washington, DC area, and I, too have felt the strain of the real estate market here. I’ve been considering relocating to Austin for the past few years, and this year may be the one. I am actually visiting the city in May to do more “hands-on” research/vacationing. As a single person on a moderate income, I am not able to buy here in the DC area, and I’m still limited by what I’m seeing in Austin. So, we’ll wait and see, I guess, but I’m interested in feedback on this as well. I’m not exactly looking to be an investor; however, I understand the value of owning vs. renting. Any advice on areas, programs, etc.?
Hi Chris,
We can of course help you when you come visit in May. The best thing to do would be to send us an email or call and we’ll start from there.
Steve
Steve, I’m sure you won’t be posting my reply, and I understand. I do strongly feel, however, that
Austin is the most overhyped ANYTHING since PT Barnum was pushing his collection of fakes and oddities
in the 19th century(but at least a circus came out of it)! Make sure to send me an e-mail and let me know when the bottom falls out of the Austin market. My Vegas odds are 2-1 that it happens in less than 12 months….prob more like 7-8. Sorry, but when I see RE classifieds full of 400 thumbnails begging for
bad credit buyers, the party is over. Make as much hay as you can while you have the blog, bro!
-Scott
you dont have no right talking about the east austin area like that you think you better then us? you aint no better then anybody else. Honestly i wish that people would leave east austin alone cause everytime more white people move in east austin loses it heritage. What makes you think that we are not uncomfortable with the fact that their is white people on every block riding bikes and water they lawns. You need to look into what you talking bout a little bit more. We might not have the best schools but, great people have came from what you call the projects.
I have to agree with Matra. From what I’ve read, this real estate team is condescending, racist, and discriminatory. You list a number of “problems with East Austin,” such as government housing projects and bad schools. This is as if to say that there are bad people living in these government housing projects. What I don’t understand is how you can talk about these individuals in such a manner, when in reality, if you knew the history of East Austin, you would know that Blacks were originally placed there due to segregation in 1928. And now segregation has ended, but you want to get rid of the original inhabitants of East Austin because that’s what’s convenient for you? Because all of a sudden, East Austin is a prime location for investing? Honestly, go get educated.
Hi Matra and Melissa,
Thanks for your comments. You’ve misinterpreted the point being made about East Austin. I am discussing it strictly from a real estate investment perspective, evaluating it from an economic standpoint, not judging its people.
The Land Trust issue is an economic issue that can affect the overall market value of homes in the area as it sets some homes on a different economic equation than others. Other factors that influence home values are proximity to downtown (obviously a positive for EA), school quality, crime and drugs, government housing, etc.
That those negative elements exist in East Austin is not a commentary of the people, it’s just a measurable set of factors to consider, and those are the things that an investor or home owner should consider if deciding to purchase real estate in East Austin.
I do understand your point of view and see how one cuold take some of the elements of this personally. That is not the intent of the discussion.
Steve
This is a very ignorant negative article from people who have no idea what they are talking about. I grew up in East Austin and I am quite proud of it. I didn’t know that such a negative stigma existed regarding East Austin until I was a student at UT. The negativity was quite shocking. I wished I understood what I do now and I would have set a few folks straight (in a polite but direct manner). Now that I’m older, I know it’s just plain ignorance. My whole life we never had any problems in our neighborhood. We rode our bikes throughout the neighborhood and walked to the store and no one ever bothered us. Our neighbors cared about their homes, watered their grass and always watched out for each other. We left our home and car doors unlocked without incident. My sister and I camped out on the front porch…and nothing bad happened. Nothing was ever stolen. It was simply a terrific neighborhood.
Now after I went off to college many of the older residents started to pass away and some of their houses became vacant or in a few instances a younger unproductive child or grandchild stayed in the home and became a neighborhood nuisance. But even with that it’s still not “bad”. I visit often and I still love it. However, there is much more traffic which I hate. There are a few negative issues that the neighborhood group is working on but nothing that makes the place so terrible or dangerous. I have lived in several other places including the suburbs of one of the richest counties in the US and there were several home break-ins in the 3 years my family resided there. Our neighbor had his bike stolen and several neighbors had their cars broken into. Unlike you, I have live in both types of neighborhoods. Today, evil is rampant everywhere.
Anyway, back to East Austin. My relatives still live in the neighborhood and own rental properties that rent well. As I said, I come back to town regularly and I have witnessed the massive numbers of whites buying homes in our neighborhood. It’s good and bad. I have personally witnessed that many of the whites are actually the trashy addition to the neighborhood compared to what I know existed in the past. And compared to the way my relatives tend to their homes. A lot of these people (the whites) never water their lawns, don’t maintain their homes well and park too many cars on the street. Furthermore, they are “ex-rated” as my grandmother says…not married, shacking up with their “baby daddy or partner” – totally against my upbringing. These type of folks are saying they moved from the suburbs so they don’t have to drive so far. Hmm, the suburbs are not so “perfect”.
The other terrible thing is the ridiculous rise in property taxes that has occurred in the area. It should be criminal. Some homes have risen in value by 150k in 10 years. One house that was valued at 100k in 2000 is now valued at 247k and this is not isolated. A few of my relatives tried to get lawyers but they couldn’t get anything changed because the whole system feeds the cronies that love to whine about welfare but they take their tin cans to the government offices and manipulate the system to get what they want. It’s all mind games.
With that said, African-Americans are not perfect and there are social ills in the community that exist due to many factors (oppression, racism, Jim Crow laws, ignorance, laziness and some of the people “give up”- they simply get tired of fighting the system and feel they always come up short). Also about the drug dealers: I have seen a few shady characters that weren’t in the neighborhood when I lived there. It’s only within the last 10 years that my childhood neighborhood has seen the likes of this gross behavior. But again it’s everywhere. Most “normal” people don’t like it and work hard to get rid of it. White neighborhoods have meth labs, pedophiles, crazy unsupervised kids shooting up everyone in their suburban schools, high-class prostitution, wife beaters, husbands (lots of CPA’s) stabbing up the whole family, crack and cocaine and I could go on and on. Same stuff, just dressed in a suit to camouflage the behavior.
I am a product of East Austin. I lived there from 1972 until 1996. I graduated from UT. I also have an MBA and I’m working on a MS in Engineering. My sister is working on her PhD. My sister’s husband grew up in East Austin and has BS in Computer Science. Neighbors around the corner are a family of dentists and professors. I have friends who are pharmacists, CPA’s, lawyers, etc that are all products of East Austin. US Trade Representative Ron Kirk is a product of East Austin. Not bragging, just saying.
Your article simply reflects a lot of ignorance and falsehoods. The notion that you have to be so “brave” to live in East Austin is utter stupidity. It’s the other way around – blacks are brave to live near ignorant whites (so many examples–here’s one: dragging another human being from the back of a truck until his head was severed: James Byrd US 1998). It so reminds me of the white person that snubbed me when I said I grew up in East Austin. Today I would say “back at you”. I’d find out what neighborhood they live in and I’d be sure to tell them I wouldn’t want to live by their kind. This article oozes with that white condescending air that always thinks that white is better and black/Hispanic is bad. It also perpetuates the mind game tricks—it’s “bad” until we want it. I am so glad I know better.
I would suggest that you stop downgrading neighborhoods when you don’t live there or personally know anyone who lives there.
Hi Lane,
Thanks for your insight. The article was written from the perspective of investing in real estate in East Austin vs. other areas in Austin, and how the contemplated Land Trust idea, outlined in the Statesman article, might mess with normal market behaviors. It was written almost 5 years ago. The Land Trust hasn’t happened, but the idea isn’t dead.
Meanwhile, all the froth came off the top of the East Austin real estate market and it’s settled into what I think are probably correct values. I was right to keep my investors out of that frenzied area. For the record, I like East Austin. When I was young and single in Austin in the 1980s I lived in East Austin for a while. It’s changed a lot, for better or worse depending on who you ask, but it has it’s pluses and minuses just like all areas of Austin.
Steve
I know this is old but randomly came across thIs post. Young family with kid. Bought a 3 bed, 2.5 bath new build in east Austin (Chestnut) for $260,000 about 4 years ago. Now valued at 450,000. Almost $200,000 in equity in 4 years. If you got in 5+ years ago you made a small fortune.
Well whoever wrote this 10 years ago sure got it wrong…
Rick and Elizabeth,
Thanks for your comments.
Again, the article was written from a rental investment perspective. Yes, Easy Austin has appreciated greatly as the gentrification continues.
The Rent/Value ratios are still way out of whack though. For owner/occupants, I don’t have a problem and never did. Even today though, 10 years after writing this, it doesn’t fit our investment criteria for buy and hold real estate that will rent for enough to cover enough of the carrying costs.
Steve