Pearlstone CEO Robert Lee talks on the ever-growing population rise in Austin while addressing issues such as rising housing costs and whether or not subsidized housing should be a main focus moving forward in the city. Having grown a family business, worked in multiple companies, and lived in dense cities, Robert brings a lot to the table in terms of hashing out how to fulfill Austin’s housing needs and accommodate the city’s growth.
[00:00] Start of episode
[05:54] Affordable housing
[11:34] Fixing housing market issues
[14:08] Keeping up with demand
[20:37] Growth of housing costs
[26:45] Austin’s rapid population growth
Affordable Housing in Austin
Robert speaks on how housing real estate is different from any other type of real estate. Housing is a fundamental need, Robert says, that this form of real estate addresses. He says that he’s worried about the current environment in Austin not being able to meet the need for affordable housing in the city.
“We came into this market short, we’re going to come out of this market shorter, there will be a day of reckoning, and we’re not going to be ready.”
What needs to be done to fix the market?
Robert starts out by saying that one step his business has taken in the housing landscape is changing the way they refer to housing. Pearlstone uses the term “attainable” to describe housing that might typically be called “affordable” to avoid the assumption that “affordable” always means a subsidized product. By focusing on upper-scale workforce housing, Pearlstone was able to reach a demand in Austin and believes that, moving forward, density will be essential in filling more housing.
“As a producer, I do not believe that unless the market rate units are involved, that we’re going to be able to get there on just subsidized housing. I think that’s been proven.”
What makes the current housing demand unsustainable?
Robert says that, with the current demand, it will be impossible to meet the need for attainable housing with only subsidized housing. Spreading that cost for every unit means that the average price goes higher and that many working people will not be able to afford housing. Overall, Robert says that Pearlston’s mission has always been to bring the most attainable market rate prices.
“Every subsidize unit that we have to do on our building means I have to spread that cost to the other units—which raises the cost to the average Joe. And so there are first-year doctors first-year lawyers, professors—usually younger ones—less-established, that are having serious difficulty finding housing where they need to be. “
Difficulties in developing
While Robert mentions the efforts for equity in housing, he says that the reality of business puts up a lot of barriers to affordable housing through rules and regulations. He says that the city has a vibrant future ahead, but must focus on having an “any and all” approach to development in which housing is broadly provided for the city’s population at large instead of narrowed down.
“When you do a development, you’re not king of the world, you can’t just do something on your own, you have to do it with partners, lending partners, and finance partners, construction partners.”
Keep up with Robert on LinkedIn.
Visit the Pearlstone website.