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Austin’s surge of new housing construction drove down rents

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Re: Austin’s surge of new housing construction drove down rents

#21

Post by atomicnumber3 »

seanmcdirmid wrote: post #9
nemomarx wrote: post #3

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.

Developers not recouping their investment will discourage less housing in Austin in the future and it will become expensive again. A lot of our current housing shortages are from the build up in 2008 and an implosion of the entire industry (so that crafts people did not really exist for the next need for housing).

So, do we just need to nationalize housing construction? If the free market apparently just can't handle it?

Re: Austin’s surge of new housing construction drove down rents

#22

Post by 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

Re: Austin’s surge of new housing construction drove down rents

#25

Post by postflopclarity »

seanmcdirmid wrote: post #9
nemomarx wrote: post #3

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.

Developers not recouping their investment will discourage less housing in Austin in the future and it will become expensive again. A lot of our current housing shortages are from the build up in 2008 and an implosion of the entire industry (so that crafts people did not really exist for the next need for housing).

just because rents fell doesn't mean developers couldn't recoup their investment. 2008 was completely different.

Re: Austin’s surge of new housing construction drove down rents

#26

Post by scarmig »

clamprecht wrote: post #6

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.

> 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). By January 2026, Austin’s median rent had fallen to $1,296, 4% lower than that of the U.S. overall ($1,353).

For comparison, in San Francisco December 2021, the median one bedroom was $2810. In San Francisco March 2026, it was $3597, an increase of 28%.

Re: Austin’s surge of new housing construction drove down rents

#27

Post by cg5280 »

amelius wrote: post #10
nemomarx wrote: post #3

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.

What if the people in power don't want prices to go down?

The problem isn’t the powers that be. A lot of regular homeowners fight new developments tooth and nail. And many blue states unfortunately give them a lot of tools to do so.

Re: Austin’s surge of new housing construction drove down rents

#28

Post by 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.

Re: Austin’s surge of new housing construction drove down rents

#29

Post by seanmcdirmid »

atomicnumber3 wrote: post #21
seanmcdirmid wrote: post #9

Earlier quoted context omitted.

Developers not recouping their investment will discourage less housing in Austin in the future and it will become expensive again. A lot of our current housing shortages are from the build up in 2008 and an implosion of the entire industry (so that crafts people did not really exist for the next need for housing).

So, do we just need to nationalize housing construction? If the free market apparently just can't handle it?

Maybe? Obviously boom bust cycles that come from a free market are not very efficient.

Re: Austin’s surge of new housing construction drove down rents

#30

Post by seanmcdirmid »

nemomarx wrote: post #16
seanmcdirmid wrote: post #9

Earlier quoted context omitted.

Developers not recouping their investment will discourage less housing in Austin in the future and it will become expensive again. A lot of our current housing shortages are from the build up in 2008 and an implosion of the entire industry (so that crafts people did not really exist for the next need for housing).

They can recoup the investment with volume (especially apartments) I would think? Sell 10 houses at 2 million each or 30 at 1 million each or however it breaks down.

Their land, labor, and material costs aren’t trivial. If thy were pulling a 10-20% margin before, how will increasing volume (which increases costs) make it up?
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