Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Austin’s surge of new housing construction drove down rents

pew.org

Post reply on HN
Print view View original

151–160 of 1001 posts

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

#151

Post by alephnerd »

rgovostes wrote: post #144

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. M…

> I've been skeptical of the claim that new construction drives rents down.

It can, but not in isolation.

It requires a couple additional variables such as population demand (rate of growth of Austin has reduced since the COVID boom [0]), existing stock (Texas had a building boom and bust in the 1980s [1] that decoupled it's housing market from the rest of the US), and a shift from buying to renting.

That said, the peers I have who work in professional real estate (not realators - as in actual MDs for REITs or multi-generational landlord families whose parents went to school with Governers and Mayors) are starting to shift away from real estate to equities because of headaches around succession planning and reduced margins.

What is ending up happening is megacap REITs like Equity Residential, Essex, Avalon, etc are buying out older groups, taking stakes in new developments, and shifting away from selling condos to perpetually leasing. At their size they can afford to have significant amounts of unleased units becuase they would have made up the cost via higher rent on leased units, tactically building high margins condos and SFHs in high appreciation geographies, or loss harvesting in order to subsidize commercial buildouts like data centers.

Naively saying only construction will reduce prices is false, and if the consolidation aspect is not solved (and sadly, it won't be) it would only lead to an even worse situation.

Additionally, these are hyperlocal problems and what may work for Austin may require significant retooling for Chicago.

[0] - https://www.bizjournals.com/austin/news/2026/01/28/austin-be...

[1] - https://www.nytimes.com/1986/09/14/business/john-connally-s-...

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

#152

Post by varenc »

muyuu wrote: post #77
riknos314 wrote: post #4

So glad we don't need to re-write the first chapter of almost every economics 101 textbook!

it's crazy that people nowadays seriously question basic market pressure being a thing

I'm with you, but many people still question this. Here's a recent pre-print paper that was in the news arguing that inequality, not lack of supply, is the real source of housing affordability: https://osf.io/preprints/socarxiv/95trz_v1

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

#153

Post by Tiktaalik »

rgovostes wrote: post #144

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. M…

what you're neglecting to consider is what would have happened if someone moved to Austin (say a wealthy person from SF) and that expensive new apartment didn't exist.

The mechanism by which new construction drives down rents is that people that need a new apartment are in less competition with existing residents in older worse apartment buildings.

So the newcomer from SF moves into the expensive new apartment, which means that there's less competition for decades old apartments, which means that when one of those is vacated there is less price appreciation on that product.

If there is a scarcity of apartments what happens is that when a decades old apartment is vacant it is filled by a wealthy newcomer and the landlord increases the rent accordingly.

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

#154

Post by QuiEgo »

strbean wrote: post #42
rconti wrote: post #11

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.

To be fair, parking structures always look and feel pretty distopian. I like the approach of making downtowns walkable and having a bit of parking at the periphery of downtown, along with good public transit. Encourages people to use public transit to get to town in the first place. Downtown residents can use transit or a zipcar or equivalent when the need to get out of town, instead of devoting a ton of space downto…

> To be fair, parking structures always look and feel pretty distopian.

What a lot of the new buildings in Austin are doing is putting an attached garage directly behind a 4 + 1 mixed use development - the street-facing facade is the apartments and shops, and the garage is directly behind (and usually attached) to the apartments. You basically never see them.

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

#155

Post by svpk »

tkel wrote: post #89
riknos314 wrote: post #4

So glad we don't need to re-write the first chapter of almost every economics 101 textbook!

There's loads of other inefficiencies as well. Moving is a huge hurdle. It's difficult to find housing that meets dozens of conditions, and even then you don't respond to supply + demand imagined equilibrium, you pay more or pay less to live near friends or family. It's something you only do a handful of times in your whole life. Trying to use the same analysis as for buying a can of beans is absurd. You might need t…

Not really, it used to be the case that a full third of Americans moved every year. Obviously life is more complicated than econ 101, but it's also obvious that a current undersupply of housing is one of, if not the primary, drivers of home pricing. Admittedly other factors like the governments interference in the home loan space have also had large effects on the market over the last century.

https://www.theatlantic.com/magazine/archive/2025/03/america...

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

#156

Post by kortilla »

hnthrow0287345 wrote: post #97
TulliusCicero wrote: post #39

Earlier quoted context omitted.

Unfortunately, there's a lot of people -- especially further left -- who fight this kind of reasoning. They insist that the housing market is different , and that just building more private housing won't help. No amount of evidence will convince these people, because they already made up their mind ahead of time: their ideology says the market can't help, so the market can't help, period. Any evidence to the contrary…

Their core argument is that we could increase supply but choose not to, and that we should be maximizing supply (as an ethical and moral mandate, but that is not a tenant of capitalism really) because housing is an essential thing like food and water. FWIW we don't maximize food/water production either for various reasons, which would also drive food/water prices down. Maximizing supply can mean other things than bui…

Food supply is most definitely maximized

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

#157

Post by Tiktaalik »

darth_avocado wrote: post #49
scarmig wrote: post #26

Earlier quoted context omitted.

> 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%.

It is well known that there was a brief moment in time when people were abandoning San Francisco and “moving to Texas” (mostly Austin) that coincides when the rents peaked in Austin. I’d be not surprised if that was also the time when San Francisco rents were down. We’re seeing a reversal in trend when SF is hot again and Austin is not. So not exactly a straightforward comparison. It could explain the SF-> Austin and…

Yeah this would be the interesting thing to try to normalize the data against somehow.

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

#159

Post by bluGill »

nomilk wrote: post #118

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 quest…

You can't start a new city. I city exists for all the things you can do. Your new city will have nothing to do because nobody lives there and there are no jobs to attract anyone to move.

that is why we build suburbs - they get anound this by being right next to a place with everything you want in a city

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

#160

Post by scoofy »

QuiEgo wrote: post #154
strbean wrote: post #42

Earlier quoted context omitted.

To be fair, parking structures always look and feel pretty distopian. I like the approach of making downtowns walkable and having a bit of parking at the periphery of downtown, along with good public transit. Encourages people to use public transit to get to town in the first place. Downtown residents can use transit or a zipcar or equivalent when the need to get out of town, instead of devoting a ton of space downto…

> To be fair, parking structures always look and feel pretty distopian. What a lot of the new buildings in Austin are doing is putting an attached garage directly behind a 4 + 1 mixed use development - the street-facing facade is the apartments and shops, and the garage is directly behind (and usually attached) to the apartments. You basically never see them.

They put it in the middle usually. It’s literally called the “Texas Doughnut” — a 5 over 1 surround a parking garage.
Post reply on HN