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Austin’s surge of new housing construction drove down rents

Austin’s surge of new housing construction drove down rents

matthest

Comments (341)

  • pclowes
    Its wild how the solution to housing costs is really just:Build more housing. Keep law and order.No it doesn’t need to be “affordable”. Yes rent control is a terrible idea.Just build more housing.Note: that the US already has plenty of housing and housing costs basically go up in areas of low crime relative to economic opportunity. If you build housing, but allow crime to rise, you have wasted everybody’s time.
  • rconti
    Meanwhile, California is also trying to build housing near transit, but Menlo Park wants to preserve the character of downtown by preserving dirty, cracked, flat, surface-level parking lots like it's 1950.
  • riknos314
    So glad we don't need to re-write the first chapter of almost every economics 101 textbook!
  • nomilk
    Dumb question, many cities suffer from extremely high property (i.e. land) prices. I understand the NIMBY barrier. But I don't understand why it isn't more common to simply.. start a new city. Especially in countries like Australia where property prices are sky high and alternative places for setting up a new city are abundant. Maybe internet connectivity was previously a barrier, but now.. starlink.I put this question to grok; its response:> Unfortunately, Australia's legal, regulatory, financial, and practical systems make this extremely difficult (bordering on impossible at any meaningful scale).Crazy that the reason we can't have an order-of-magnitude reduction in the cost of the most important thing people need (shelter) is not due to resource constraints, but man-made ones.
  • nemomarx
    Good news - experimental verification of the law of supply and demand!I'm sure the analysis is welcome though and I hope policy makers try to learn from this. We could densify most american cities quite a lot more.
  • karakoram
    The solution to ALL cost of housing problems globally is this.Everywhere you look, Australia, Canada, UK, EU this is just a massive issue for young professionals with long-term disastrous downstream political consequences, and yet, the solution is so simple but hardly ever implemented in these countries.Just BUILD MORE HOUSING. Mass build everywhere. Vast amounts of land is available. Just build homes and apartments everywhere!
  • lifeisstillgood
    >>> The city changed zoning regulations to allow construction of large apartment buildings, particularly near jobs and transit. In 2018, voters approved a $250 million bond measure to build and repair affordable housing. Permitting processes were reformed to speed development and reduce costs.All three of the five things most economists say about house building - and each one will hit house owning voters hard making it hard to replicate.But none the less a triumph of common sense :-)
  • jackconsidine
    Anecdote: I lived in Austin from 2017 to 2021. My rent was always very cheap (my baseline is Brooklyn which I guess makes everything feel cheap. But my rent went up $50 for the first 3 years and then down $200 during Covid and I checked recently and my aptmnt is still the same price). Around the time I left everyone was buying up houses to rent and Airbnb. Very palpably felt the growing supply when it came to bnb's (the owners having a harder time competing for renters etc). It's hard not to be surprised in spite of the tremendous growth in that city
  • exabrial
    It's wild how the solution to housing is: stop the government from stopping housing from being built.
  • alsetmusic
    It's almost as though the well-known and proven method of building more housing works!Similarly, the tested and proven solution to homelessness is providing housing up front. Don't have any requirements (employment, sobriety, etc) blocking housing. Those things are easier to achieve with a roof over your head.
  • caditinpiscinam
    You say progress, I say enshittification.What this article says: *The median apartment rent in Austin has dropped X% over the past 5 years*What this article does not say: *Apartments in Austin cost X% less to rent now than they did 5 years ago*It's completely possible for the cost of the average apartment in a city to go down, while the cost of existing apartments increases. How does this happen? The enshittification of rentals. Units get smaller (apartments in Austin are shrinking), they get built near highways (air pollution), they lose amenities like parking, they pop up places where they previously weren't allowed (smaller ADUs, basement units, see article), they get subdivided (landlord throws up a wall and turns a large 1br into a cramped 2br).If supply and demand were really working the way its heralds claim, then we'd see the price of existing units going down. This article offers no evidence that this is happening. I don't believe for a minute that it is.Instead, it's the same story as always: your rents will keep going up. You can move somewhere cheaper and shittier if you want. The people who profit will congratulate themselves while decrying the thing they actually fear: rent control.https://www.statesman.com/story/business/real-estate/2025/05...
  • xwowsersx
    You mean to tell me that increasing supply lowers price? Fascinating.
  • clamprecht
    At a glance, I'm a bit skeptical. It looks like they're cherry picking the high point for rent (the COVID spike).> "Rents fell. In December 2021, Austin’s median rent was $1,546, near its highest level ever and 15% higher than the U.S. median ($1,346)."Of course having more housing should, all things equal, lower rent. But all things certainly weren't equal, especially during this time period.
  • lasky
    The laws of supply and demand don't apply to housing in the Bay Area.We need affordable housing, not more housing for rich people, made by rich developers. Just because my house is worth $3M and I have $3M in stock options doesn't mean I'm rich. I'm working class, I had to come back from paternity leave to log-in to Slack on my laptop every damn day, and tell Claude how to write this damn software!Did you sign the petition to block the apartment building down the street? It would RUIN our neighborhood!!As an aside, I am not part of the problem!! I care about poor people!!! I am a good person!!!!Oh you want proof? Look at my front lawn: "In this house we believe black lives matter, science is real, love is love..."Proof point 2: look at my Tesla! "I bought this Tesla before I knew Elon was crazy!"Plus I voted for Kamala. I'm GOOD. People in Kansas are DUMB and BAD.
  • legitster
    Another part of this - higher interest rates really put the brakes on home values. We own a rental property and the home value has more or less been locked in since 2022. In our otherwise hot metro area, nobody has raised their rental rates on similar properties in 4 years.It's a win-win for our tenants. Prices seem to be stable and there's no rush for them to lock down a house RIGHT NOW.It's sure not good for my bottom line as a landlord for them to keep adding homes and keeping rates up. But it sure seems like a no brainer for society at large.
  • easterncalculus
    Austin is not a success story. It is a treading water story, and an example of lying with statistics because most of where it's cheap to live in "Austin" literally wasn't Austin when these measurements start. They just literally redrew the lines in part to make this headline.If you want a success story, look a Vienna. That's what actual community and housing looks like and its because of the exact opposite of what econ clowns on here believe, non-market housing.
  • shcheklein
    Can it be also related to demand not catching up or even declining? If place is in high demand and prices go down shouldn't it cause even more people coming to it (compensating for a possible price change). (Note: not an expert on this, I'm just curious how it really works - besides obvious thing: more supply -> price goes down).
  • rgovostes
    I'll admit ignorance here, but I've been skeptical of the claim that new construction drives rents down. What I actually see is: a luxury apartment building goes up, surveys the market, and sets its rents 30% higher for the privilege of living in a new building with a gym for dogs or ball pit or whatever. Then the older buildings say, "Well, we can raise our rents 20% and still be the best deal in town," and so on.Maybe if you flood the market with 30% more housing units like Austin you get the Econ 101 effect. On the other hand, apartment owners realized intentional vacancy is a profitable strategy, which alone seems to defy that basic interpretation.
  • Gigachad
    Same has been happening in Melbourne, Australia. The state government has basically steamrolled the boomers and allowed highrise construction next to existing train stations. Despite having huge population growth, rents are some of the most affordable in the country.
  • kart23
    the problem in sf is building is incredibly expensive, and projects that have been planned, land acquired, are simply sitting as empty lots because developers don’t have the money.interest rates for construction loans, reduced funding, labor and material costs, all contribute to the amount of housing built.there is a bond being debated in the ca senate now that will help by giving loans for construction.https://calmatters.org/politics/2026/01/2026-housing-agenda/
  • CSMastermind
    Certainly, that can't be true?Increased supply lowered prices for the same levels of demand?Seems unlikely.
  • babybjornborg
    This is democracy in action: give the people what they want (and need)!
  • ksec
    This reads like some triumph but rent was up 100%+ from 2010, and it is merely back down 15%.Even adjusting for inflation, and even if the measurement of inflation is decent, it would still need to go down by another 20%.
  • yieldcrv
    I would buy more complex arguments around housing price solutions if ALL housing price problems everywhere else hadn't been solved by building more housing
  • afh1
    Germany could learn a lesson or two here...
  • mancerayder
    Anyone ever drive around Austin, its highways and its endless new construction of new superhighways, to the point that Google Maps is confused?As annoying as NYC (and driving) are, there are downsides to unlimited housing and lack of zoning - as it turns out, the same states that do this sort of thing we all praise, are the same laissez-faire philosophies that oppose communal public transportation and walkable urban communities.
  • lanfeust6
  • lumirth
    I mean… duh? Genuinely baffled at people struggling to understand this. When there’s more of a thing, it costs less. Which is good when that thing is essential, like housing.Not sure the idea of housing being an asset which endlessly accrues value is good for anybody involved, long-term. Open to disagreement, though! I’m no economist.
  • imadch
    Austin is a good reminder that supply does matter — but also that it needs to be added at scale before people actually feel it.Small incremental changes probably just get absorbed without visible impact on rents.
  • redwood
    Supply glut aside... Quality of life down... Traffic up... Kind of makes sense rents are down. Density needs transit investment too
  • redwood
    Supply glut aside... Quality of life down... Traffic up... Kind of makes sense rents are down.
  • diogenescynic
    Wow it's almost like the law of supply and demand is in fact accurate. Who would have thought basic economic 101 would be proven out? It's almost like when you allow supply to increase to meet demand the price equilibrium can move down. Shocking.I say this with a bit of righteous anger though because the moronic democrats in California want to virtue signal about housing and homelessness but they make it downright as difficult and expensive as possible to increase housing supplies. The democrats in California have done nothing but make our problems worse, even as there are states we can look to with proven examples to solve our problems. Nope... more housing lotteries and BMR units will be required instead of just making it easier to actually build..
  • cat-turner
    Thats cool. Now do LA. Sorry but I want beaches and housing options.
  • plantain
    Water, still wet.
  • tonymet
    what they didn't mention is that supply didn't impact rents until the large remigration back out of Austin
  • elng
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  • shablulman
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  • ctdinjeu2
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  • cyberax
    Sigh. NO it didn't. One fact of life: new construction does NOT lead to lower housing prices. Sad, but true.So what did? Likely COVID. The _only_ way to decrease the housing prices is to decrease the population. As proven by countless cities, including the world's most liveable Copenhagen.So does my prediction hold for Austin? Let's see.Austin TX population in 2019 (ACS estimate, data series ACSDP1Y2019.DP05): 979263.2021 (ACSDP1Y2021.DP05): 9446582023 (ACSDP1Y2023.DP05): 979700.2024 (ACSDP5Y2024.DP05): 979539.So yep, my prediction holds true. The housing prices in Austin were stagnant because its population decreased during COVID and barely recovered to pre-COVID levels.Want another prediction? Seattle's home prices will fall down, because its population is now (likely) decreasing. Not because of a rush of new construction. We'll see updated population released stats in April.Edit: I sent a letter to the editor of Pew. We'll see if they have a shred of honesty (doubt it).Edit 2: honest researchers take care to control for other factors before jumping to conclusions. For example, they could have found a comparable city that also had falling rents but _no_ significant new construction.And hey, I did that. According to https://vitalsigns.mtc.ca.gov/indicators/asking-rents the rental price in SF was $4060 in 2019, and it fell to the low level $3319 in 2024 before starting to climb in 2025. Can you guess what was happening with its population?
  • postflopclarity
    how surprising, never would have seen that coming