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Austin’s surge of new housing construction drove down rents

• riknos314 7mo ago
  So glad we don't need to re-write the first chapter of almost every economics 101 textbook!
  • malkosta 7mo ago
    Yes, it describes human nature better than psychology. We can’t fight even knowing about it.
  • tkel 7mo ago
    They also teach you about elasticity in econ 101. It's foolish and anti-intellectual to insist that the housing market has only two factors, while simultaneously condescending about your understanding of economics shows that you really don't understand economics, it's more about your ego.
    • JumpCrisscross 7mo ago
      > It's foolish and anti-intellectual to insist that the housing market has only two factors Elasticitiy moderates the effect. It doesn't reverse it. Increasing housing supply decreases housing costs. A lot of people are venally or ideologically motivated against accepting this. Our housing crisis is a political choice. (Note: I'm a homeowner.)
      • mr_00ff00 7mo ago
        This reminds of a fun fact I remember learning in university. Elasticity is the relationship between demand and supply, and there are actually very rare instances where it can be negative (where demand increases with price). These are called Giffen goods. https://en.wikipedia.org/wiki/Giffen_good https://en.wikipedia.org/wiki/Giffen_good Explanation (that I remember) Inelastic demand is when a good is demanded so much, that an increase in price has little affect on the total quantity (people still demand it, think like addictive substances) So a perfectly inelastic product would be a straight line where any amount is demanded at any price. So having the curve keep going it would get a positive slope, where higher price makes demand go up. If I remember the example I was given was food during a famine. Supply is already low, but an additional pressure on price is the known shortage. The idea being that as the price goes up people see it as harder to get. It’s been so long since I studied the subject so I might have gotten some things wrong here.
        • JumpCrisscross 7mo ago
          Cool! Thanks!
        • thaumasiotes 7mo ago
          > These are called Giffen goods. The terminology is actually split; sometimes they're called Giffen goods and sometimes they're called Veblen goods. The two types have identical behavior, so there's no good reason to have two different names, but in concept Giffen goods are something poor people buy, while Veblen goods are something rich people buy. (There is a difference if you're willing to look at responses to changes other than a change in the price of a good: if you give a household more money, it will increase consumption of Veblen goods, but decrease consumption of Giffen goods.)
      • peder 7mo ago
        > A lot of people are venally or ideologically motivated against accepting this. That’s the story of the last 10 years among certain types that keep regurgitating obviously wrong concepts.
        • JumpCrisscross 7mo ago
          > That’s the story of the last 10 years The urban orthodoxy is around demand rationing. Supply-side arguments are incredibly new. The evidence cuts in one direction. (Unless we want a hukou system.)
    • Aurornis 7mo ago
      The parent comment never claimed that the housing market only has two factors. You’re arguing against a strawman of your own creation.
    • deleted 7mo ago
      [deleted]
  • muyuu 7mo ago
    it's crazy that people nowadays seriously question basic market pressure being a thing
    • lesuorac 7mo ago
      Eh, people really need to be questioning econ 101 more often. It's built upon untrue assumptions - infinite buyers / sellers - perfect information - no switching / transaction costs --- The article itself has 3 different year ranges provided so I'm not sure how you can use it as evidence. Plus overall the rent is still up by a lot since 93% - 4% is still at least 80%. - Rents increase by 93% from 2010 to 2019 - Housing increase from 2015 to 2024 (this overlaps with when rents increased ...) - Rents fell from 2021 to 2026 by 4%
      • pembrook 7mo ago
        Ah yes, that 150 year old meme reflexively copy-pasta'd by internet commenters since the days of usenet to refute basic concepts like supply and demand. "Lol economists are dumb they think humans are robots!" No they don't. Sorry, we won't be throwing away an entire field of human endeavor based on a straw man caricature that isn't true. We don't call physicists dumb and throw out their ideas because the real world isn't a perfect vacuum either. They know this, don't be silly.
        • lesuorac 7mo ago
          We do throw out everything from physics 101. The movement of satellites is not modeled using distance = speed * time. It would do well to consider if econ 101 is an accurate way to model the world since for other domains the 101 course is not.
          • pembrook 7mo ago
            Yet the overwhelming factor in modeling the movement of those satellites is still distance = speed * time. The existence of nuance and external factors don't negate the original principle. The equivalent to arguments made by 'economics deniers' in this thread would be if you argued: the satellite moving at 7.8 km/s actually causes the earth to spin 8 km/s faster, so trying to make the satellite move faster makes it go slower! Applying acceleration doesn't help! No. Making the satellite move faster generally makes it move faster. Building more housing generally makes it cheaper. Let's not do the HN thing and get lost in pedantry.
  • ghostly_s 7mo ago
    the snark is quite rich when reading beyond the headline makes clear this was anything but a free market solution.
    • mgfist 7mo ago
      OP wasn't talking about free markets but supply and demand.
    • thesmtsolver2 7mo ago
      You should read again. The reforms made the market more free.
  • tkel 7mo ago
    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 to take econ 201 before you understand why econ 101 is wrong about housing.
    • paulnpace 7mo ago
      I'm not clear: does Econ 201 inform us as to how demand and supply are not related to price?
      • fragmede 7mo ago
        it says "it's complicated".
      • tkel 7mo ago
        Yes, you learn why supply + demand curves do not actually describe many markets
        • paulnpace 7mo ago
          So, if instead of installing a bunch of apps, setting up search filters, and refreshing browser tabs on my phone ever 15-30 minutes, then the instant something meets my parameters I immediately leave work and, if possible, make a deposit on a new place, I open an app and find 5000 places meeting my requirements, meet them when I'm not working and on my time, and tell them I like a different one better so I'll hold off before making a decision, makes no difference on the price?
    • triceratops 7mo ago
      > It's difficult to find housing that meets dozens of conditions Correct. That's why when there's more housing you're more likely to find what you need.
    • 7mo ago
  • cm11 7mo ago
    I don't think this is simple econ 101. Yes with more houses we should expect lower prices, but also with high prices we should expect more houses produced. All that is econ 101, but that second econ 101 prediction isn't happening. I would guess that some will chalk it up to vaguely (though not necessarily wrong) jerks/idiots blocking it. Whether it's because nimbyers want to keep their home values (what we should expect from econ) or it's broken city politics, there are lots of things going on here. It's more complicated.
• shablulman 7mo ago
  [dead]
• nemomarx 7mo ago
  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.
  • seanmcdirmid 7mo ago
    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).
    • standardUser 7mo ago
      It's a balancing act. Build too much and developers make less money. Build too little and poverty and homelessness shoot up. Which side do you want to err on?
    • nemomarx 7mo ago
      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.
      • seanmcdirmid 7mo ago
        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?
        • bryan_w 7mo ago
          They reinvest that generous 10% to buy more tools and hire more talent to build 10x as many homes at 2%. Seems pretty straightforward to me
• xwowsersx 7mo ago
  You mean to tell me that increasing supply lowers price? Fascinating.
  • dietr1ch 7mo ago
    Who would've thought?!
  • TulliusCicero 7mo ago
    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 is a plot by billionaires or something.
    • lanfeust6 7mo ago
      The populists on the right share a similar view, but mostly blame immigration.
    • hnthrow0287345 7mo ago
      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 building like taxing unoccupied homes by large amounts making them unpalatable to own as a second (or higher) home, thus putting them back on the market. However these aren't all good because obviously our economy deals with more effects than just simple supply and demand, like maximizing the amount of loans given to people wanting housing regardless of the ability to repay is known to be a bad idea. If you throttle the supply you can clearly control the price and the people you're talking about believe there is a concerted effort to control that supply. This can happen directly (choosing not to build as soon as land is available to build on) or indirectly (e.g. politics, mass media influencing people to vote to not increase supply). What people generally hate is production of essentials not being maximized which would give us the actual lowest price, and maybe we as a society should be maximizing that supply to arrive at the lowest cost for a given house with given features. And then the rebuttal to that is usually "tough shit lol" which is why people coming out with simple supply and demand replies are generally seen as derisive.
• clamprecht 7mo ago
  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.
  • 2postsperday 7mo ago
    [flagged]
  • scarmig 7mo ago
    > 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%.
    • darth_avocado 7mo ago
      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 back trend.
      • Tiktaalik 7mo ago
        Yeah this would be the interesting thing to try to normalize the data against somehow.
      • scarmig 7mo ago
        So we've got point in time comparisons between Austin and itself; the change in delta between Austin and a particular city known for restricting housing; and the change in delta between Austin and national median rents. They all support the idea that increasing supply tends to decrease costs, which by a massive coincidence is what basic economic theory suggests. Of course, people can come up with an ad hoc explanation for why Austin's prices happened to decrease against each of those data points. But is there a single principled way to present the data that suggests increasing supply in Austin did not decrease costs?
• lifeisstillgood 7mo ago
  >>> 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 :-)
  • cheriot 7mo ago
    > and each one will hit house owning voters hard making it hard to replicate In a negative way?
    • maxerickson 7mo ago
      As a homeowner, I want number to go up. These things push against that. Really, I'd prefer not having policies that tend to push up housing prices or discourage people from moving, but here we are, those types of policies are common.
      • wbobeirne 7mo ago
        As a home owner in Austin, I want my friends to be able to afford homes too and not feel like they have to move to have a yard and a family. Bring on the new construction.
        • maxerickson 7mo ago
          What do you think the big paragraph at the end meant to convey?
      • gtowey 7mo ago
        > As a homeowner, I want number to go up. Which is myopic. As a homeowner, I want cities to be livable and affordable for those who want or have to live there. I don't care if the value of my home changes one cent. It's honestly kind of useless, because it's not like I can sell the house and buy a nicer one. All the houses are more expensive so it's always going to be a lateral trade. It only helps if you sell and move to a lower cost of living area. It's kind of a sham that we have been conditioned to treat housing as an investment. Housing is where people live, it shouldn't be a commodity to be hoarded.
• Gigachad 7mo ago
  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.
  • servo_sausage 7mo ago
    One of the things I like about the reporting in this Austin article, is they break down by building class. In Melbourne I've never found a good source for this, only general averages; and my suspicions are that we just build shitboxes and claim the rent is lower on average, capturing something like shrinkflation rather than affordability.
    • bombcar 7mo ago
      You should be able to identify properties and track them over time; and then even if you argue that "brand new condo" vs "same condo 10/20/30 years later" aren't directly comparable; well you can start to compare other metrics.
      • servo_sausage 7mo ago
        This is why I'm so sceptical about claims in Melbourne... If I look at properties I rented in the past, they are far less affordable. But that's just the few I've looked through, not statistically significant.
    • nmfisher 7mo ago
      I was apartment hunting in Melbourne in 2015 and I was appalled at the quality of most inner-city apartments. Tiny shoeboxes, no sunlight, paper thin walls. At the time I didn't think they should have been allowed to be built. But looking back, they probably did keep a lid on rents. A bad roof over your head is better than no roof.
• rconti 7mo ago
  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.
  • ctdinjeu2 7mo ago
    [dead]
  • strbean 7mo ago
    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 downtown for storing their cars. Not sure if that approach is really practical, but if it can be made to work it is much nicer.
    • rconti 7mo ago
      Well, in Menlo Park they're just flat surface parking lots, not even multi-story structures. The planned development is multi-story housing with parking underneath. To be fair, I am boycotting the (similar) underground garage over at Springline because they're clearly made only for people in Range Rovers or whatever. They have those AWFUL ticket machines, set too far back (to avoid getting hit) and too high to access from a normal car.
      • odyssey7 7mo ago
        Is the Bay Area really dealing with ticket machines? The global capital of technology? Just bill by plate or something.
        • idontwantthis 7mo ago
          Or develop 12 competing apps that each only work in different lots.
• lumirth 7mo ago
  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.
  • Gigachad 7mo ago
    I guess the confounding factor is that the population isn't fixed. Greater construction could result in population growth which cancels out the gains from greater supply. You'd have to build faster than population growth to lower prices. And generally developers aren't looking to do that.
    • jakelazaroff 7mo ago
      Sure they are. What developer wouldn't rather rent out ten apartments for $2k/mo than two apartments for $4k/mo?
      • Gigachad 7mo ago
        Depends what the situation is, if the rents are absurdly high where you can undercut them and still profit then of course they would rather build more. If they are getting close to cost price, developers won't build more to lower it beyond that. At that point if you want to lower prices more you'd have to look at lowering the cost of construction.
      • bombcar 7mo ago
        Developers usually want to buy land, build house/apartment, and sell house/apartment. They want to flow as much as possible - so if there are unlimited building spots you get a smattering of various options being built as they all find there niche. If the building lots are rare, then they all will be built into the most expensive possibility.
  • CBLT 7mo ago
    People are quick to point out that induced demand exists - especially people that aren't fond of change. Very broadly speaking, people mis-estimate effect sizes in economics by orders of magnitude. Induced demand is just their foothold to claim an effect exists, before they go about claiming the effect size they want to see.
• postflopclarity 7mo ago
  how surprising, never would have seen that coming
• lanfeust6 7mo ago
  Similar phenomenon in several cities: https://substackcdn.com/image/fetch/$s_!vg94!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F66a7a8c8-4e5a-497b-8b6e-1689e008254c_623x736.jpeg https://substackcdn.com/image/fetch/$s_!vg94!,f_auto,q_auto:...
• jackconsidine 7mo ago
  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
• ctdinjeu2 7mo ago
  [dead]
• legitster 7mo ago
  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.
  • james_marks 7mo ago
    This balanced perspective on what’s good for someone personally vs what’s good for society at large is what’s missing from the world.
    • bombcar 7mo ago
      Any reasonable landlord/real estate investor will have planned for various results - if your rental empire depends on "rents go up" and can't handle a flat market, let alone a downturn, you're going to be in for a bad time. A stable market is great; as you can find good deals with some sort of certainty, and focus on where you can actually build value (rehab, etc).
      • seanmcdirmid 7mo ago
        If you are smart, you throttle up investments just before a boom starts and throttle them back just before a boom ends. At least you try to up your margins during good times so you can survive bad times. The trick is keeping your talent employed during the bad times so they are trained up and still in the industry for good times. Stability is obviously preferable.
• tonymet 7mo ago
  what they didn't mention is that supply didn't impact rents until the large remigration back out of Austin
  • abigail95 7mo ago
    show pop stats
  • JumpCrisscross 7mo ago
    > what they didn't mention is that supply didn't impact rents until the large remigration back out of Austin This has been studied to death. But just like soybean farmers in Idaho voting for tariffs on China it seems a category of urban renter is more wedded to ideology than self interest. The Austin metro area's population is up [1][2]. Austin's GDP is up [3]. Migration per se doesn't explain a phenomenon that is robust across cities, countries and centuries. [1] https://www.macrotrends.net/global-metrics/cities/22926/austin/population https://www.macrotrends.net/global-metrics/cities/22926/aust... [2] https://en.wikipedia.org/wiki/Austin,_Texas#Demographics https://en.wikipedia.org/wiki/Austin,_Texas#Demographics [3] https://fred.stlouisfed.org/series/GDPALL48453 https://fred.stlouisfed.org/series/GDPALL48453
    • tonymet 7mo ago
      2-3% is a margin of error compared to 20-40+% y/o/y growth. That means the influx ceased, some left, some had babies. Meanwhile housing was built. Of course rents will crash if everyone anticipates 20-40% growth and it’s suddenly 0 . Let’s see in a few years if the pricing trend continues downward or upward. If it’s downward, yes we’ve solved the rent problem by “building”. If it’s upward, as it has been, it’s not just about supply .
      • JumpCrisscross 7mo ago
        > Let’s see in a few years if the pricing trend continues downward or upward This was the argument of the tobacco companies in the 1980s. This experiment has been run many, many times and only had one outcome. Overwhelming housing markets with a supply influx absolutely works. It cuts against ideology, however, so you’ll always have folks who want to wait for more data while properties appreciate.
• cat-turner 7mo ago
  Thats cool. Now do LA. Sorry but I want beaches and housing options.
• shcheklein 7mo ago
  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).
  • JumpCrisscross 7mo ago
    > Can it be also related to demand not catching up or even declining? The Austin metro area's population has been monotonically increasing [1]. Increasing housing supply decreases prices. If you want to reduce housing costs, flood the system with housing. [1] https://www.macrotrends.net/global-metrics/cities/22926/austin/population https://www.macrotrends.net/global-metrics/cities/22926/aust...
• afh1 7mo ago
  Germany could learn a lesson or two here...
• CSMastermind 7mo ago
  Certainly, that can't be true? Increased supply lowered prices for the same levels of demand? Seems unlikely.
• kart23 7mo ago
  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/ https://calmatters.org/politics/2026/01/2026-housing-agenda/
• redwood 7mo ago
  Supply glut aside... Quality of life down... Traffic up... Kind of makes sense rents are down. Density needs transit investment too
• imadch 7mo ago
  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.
• nomilk 7mo ago
  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.
  • 1970-01-01 7mo ago
    Water. You need clean water to grow a city. There isn't much of that to spread around anymore.
    • bluGill 7mo ago
      most people posting here are talking about california or texas - desert or near deserts where there isn't enough water. however there are many places where there is more than enough water. East of the mississippi for example. other continents also have areas where there is plenty.
    • aorloff 7mo ago
      Except in the oceans, and near the oceans
      • deleted 7mo ago
        [deleted]
  • blesss121q 6mo ago
    [dead]
  • noahbp 7mo ago
    Why would you think that the same thing preventing density and new development in cities won’t stop your new city from growing before any building taller than 2 stories is built?
• redwood 7mo ago
  Supply glut aside... Quality of life down... Traffic up... Kind of makes sense rents are down.
• alsetmusic 7mo ago
  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.
• rgovostes 7mo ago
  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.
  • piinbinary 7mo ago
    > 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. I think that might not be the right cause and effect relationship. The actual cause is increased demand. This creates both the increased pricing of existing stock and an incentive to build new stock.
  • marssaxman 7mo ago
    > Then the older buildings say, "Well, we can raise our rents 20% and still be the best deal in town," They can only get away with that when there is a housing shortage.
  • alephnerd 7mo ago
    > 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-becomes-established-tech-hub.html https://www.bizjournals.com/austin/news/2026/01/28/austin-be... [1] - https://www.nytimes.com/1986/09/14/business/john-connally-s-texas-sized-troubles.html https://www.nytimes.com/1986/09/14/business/john-connally-s-...
• babybjornborg 7mo ago
  This is democracy in action: give the people what they want (and need)!
  • babybjornborg 7mo ago
    Why are you downvoting me, I'm right
• cyberax 7mo ago
  [flagged]
  • simianwords 7mo ago
    There are many mistakes here. The population numbers you have reported are misleading because they use 5 year estimated numbers. The better estimate is 993,588. The population actually grew from 2021. Even if you were right, the rents fell down by more than 19% after accounting for inflation. I’m not sure what you are trying to say?
    • cyberax 7mo ago
      > The population numbers you have reported are misleading because they use 5 year estimated numbers. I specifically chose consistent data series. While each one of them can't represent the true population, they absolutely do illustrate the trend. The number you're quoting is from the Census, which only happens at 10 year intervals. If you have better population estimates for these years that use the same consistent methodology, I'm all ears. > Even if you were right, the rents fell down by more than 19% after accounting for inflation. I’m not sure what you are trying to say? In SF rents fell even more. Without significant new construction. Why?
      • simianwords 7mo ago
        > I specifically chose consistent data series. While each one of them can't represent the true population, they absolutely do illustrate the trend. The number you're quoting is from the Census, which only happens at 10 year intervals. False. You are comparing 5 year estimates with 1 year estimates so it’s not consistent. With SF I agree that it went down because of population but I’m not sure how that explains 19% reduction in rents in Austin with higher population.
        • cyberax 7mo ago
          Sorry, misclicked on this one: 2024 (ACSDP5Y2024.DP05): 979539. The 1Y series is indeed https://data.census.gov/table/ACSDP1Y2024.DP05?q=Austin,+TX https://data.census.gov/table/ACSDP1Y2024.DP05?q=Austin,+TX at 993771. I believe this is a statistical outlier, and is not reflecting the true population. So let's test my prediction, shall we? The 2025 data will be released in April. If my prediction holds, then the population figures for Austin will be nearly flat or falling. I also made the same prediction for Seattle, its rents are now falling slightly. So its population will be decreasing. > With SF I agree that it went down because of population but I’m not sure how that explains 19% reduction in rents in Austin with higher population. As you see from my data, the consistent series up to 2023 indicated falling population. The 2024 data was the outlier.
• ksec 7mo ago
  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%.
• pclowes 7mo ago
  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.
  • hammock 7mo ago
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  • deleted 7mo ago
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  • datsci_est_2015 7mo ago
    Multiple things can be done at once. The policies you laid out are not mutually exclusive, and have different utility for different communities. But yes, fundamentally more housing is needed for growing populations. Conversions and rezoning are also important parts of the urban equation to “build more housing”, not just exurban McMansion developments.
  • tsunamifury 7mo ago
    [flagged]
    • tptacek 7mo ago
      There isn't affordable housing in areas of opportunity. You can easily find cheap housing if you don't care about proximity to jobs or to good school districts.
      • tsunamifury 7mo ago
        [flagged]
    • bitmasher9 7mo ago
      What do you mean by "economic singularity"? If your goal is being near economic opportunity then Austin has plenty. It’s not NYC or SF, but this suggests that those would be more affordable if they just built more housing.
• plantain 7mo ago
  Water, still wet.
• mancerayder 7mo ago
  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.
• lasky 7mo ago
  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.
• elng 7mo ago
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• exabrial 7mo ago
  It's wild how the solution to housing is: stop the government from stopping housing from being built.
• caditinpiscinam 7mo ago
  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/2025/05/09/apartments-austin-texas-apartment-size-shrank-10-years-rentcafe-report/83349241007/ https://www.statesman.com/story/business/real-estate/2025/05...
  • verteu 7mo ago
    No, plenty of indices use a "repeat-rent" methodology (comparing only prices changes across the same unit) to address the problem you describe. They show Austin rents going down, eg Zillow's Observed Rent Index: https://www.zillow.com/research/data/ https://www.zillow.com/research/data/
• yieldcrv 7mo ago
  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
• diogenescynic 7mo ago
  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..
  • usui 7mo ago
    I'm with you and feel your anger. So tired of California's useless virtue signaling about housing and homelessness while no progress is made for decades. California, stop messing around and start living up to your virtue signals! It's infuriating to live in California, hear all day about caring about poor people, then do nothing at all for the bottom line and in fact endeavor to make it harder and discriminate against poor people as much as possible. And then they'll act so surprised when the populists without a plan show up and win the national elections.
    • foobiekr 7mo ago
      Some of the problem in California is that the population of want-to-buyers is all focused on a small number of extremely geographically constrained areas. Their answer is always "more density" but more density isn't going to solve it - the demand is not fixed and density will not alleviate it, so there is natural pushback on ruining the area and not actually solving the problem. The real answer here is that the valley needs to extend further south, as in the 1990s plans for companies to start building campuses in Silver Creek or further, which would require the government to incentivize such moves. Had the dotcom lasted another two years or so, IBM, Cisco, and many others would have done the capital investment in campuses further out, and the viable housing area would have increased dramatically, but it didn't work out that way.
• easterncalculus 7mo ago
  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.
• karakoram 7mo ago
  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!
• jeffbrines 7mo ago
  Has anyone also considered the possibility that Austin is just not that great? Like...those comparing it to the Bay area or a light weight NYC need their heads checked. Maybe people (like me) just realized it wasn't great and...left?
  • quacker 7mo ago
    If you’re asking about a population decrease then, no, Austin has not had a declining population count for decades, and not recently either, although growth has slowed. So it’s not a case of decreased demand.
• jeffbrines 7mo ago
  Or...maybe...Austin just isn't that great? Maybe (just maybe) a lot of people (myself included) woke up one day and was like "why are we doing this?" and moved somewhere better? Austin is not what people pretend. Same with Denver or SLC. There are no tier 2 cities. Its like countries. There are first world, and third world. And thats it.
• xiaolu627 7mo ago
  Interesting to see how building more housing in Austin actually lowered rents. The debate about rent control versus new construction is always thought-provoking.
• EcommerceFlow 7mo ago
  Why do people accept that supply/demand works in so many industries when the private market is allowed to flourish, but won't accept it for healthcare, education, etc?
  • rootusrootus 7mo ago
    A lot of our health care needs are notoriously inelastic, which is IMO the biggest reason free market dynamics are not a good choice.
  • verteu 7mo ago
    Because for-profit healthcare and higher ed have shown poor outcomes empirically?
    • hunterpayne 7mo ago
      When? Because we don't use market solutions for those things now. Those are two of the most manipulated markets in the US. They also are two of the three industries whose prices increased by more than inflation, everything else has gotten cheaper (inflation adjusted) over the last several decades. Those things are related.
  • slopinthebag 7mo ago
    Ideology, mostly.
• myttle_web396 7mo ago
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• nielsbot 7mo ago
  Relevant: I just listened to an interview with Max Buchholz, US Berkeley assistant professor and the lead author of a new working paper titled "Inequality, Not Regulation, Drives America's Housing Affordability Crisis." He says that building housing does bring prices down, but not very much. In his paper they argue that income inequality is a big driver of making housing unaffordable. (Not billionaires, but more those making more than the median income vs the rest) Because (among other reasons) those with higher income have leeway to spend more on housing versus those at the lower end of the income scale who can’t spend more on housing even if they get a raise. https://www.youtube.com/live/ai76174930Q?si=R-FYO86COepRADhE&t=2127 https://www.youtube.com/live/ai76174930Q?si=R-FYO86COepRADhE...
  • Straw 7mo ago
    This is nonsense. In every material good, the buying power of nearly everyone has increased in real terms over time, regardless of inequality. It's only in housing, with constrained supply, that inequality can drive up prices; and even in that case, it doesn't actually change the housing supply- if prices are high, that just means a lot of people who want to live there! Inequality doesn't reduce the number of houses. Building a little reduces prices a little. Building a lot reduces prices a lot. If the prices are very high, then it's very profitable to build, so unless stopped by regulation, you will get a lot of building. Even if building merely keeps the price from going up as density increases, the value provided by living in an area goes up from agglomeration effects as it grows.
    • nielsbot 6mo ago
      Are you an expert in this space? Did you listen to the interview?
• benguild 7mo ago
  “Great, now let’s see California…” - Patrick Bateman
• bob1029 7mo ago
  I feel like the economics around the Texas real estate markets are getting really twisted due to other factors. The quality of construction in these new builds is generally very bad. If you compare a Texas home built in 2025 with one in 2015, I can guarantee you will find shocking differences once you pull back some of the drywall or have kids jumping around upstairs. I had a 2023 build for a year before I realized I had a hot potato situation on my hands and decided to bail. The new builds used to command a premium, but in some communities the situation has completely inverted. Buyers are coming in and explicitly avoiding anything built in the new millennium. Information is flowing so much more freely around real estate and the unspoken bullshit scams prevalent within. We've now got home inspector influencers on TikTok showing first time homebuyers exactly what to look out for. We didn't have these kinds of information channels when I was shopping for my first home.
• KellyCriterion 7mo ago
  Did it actually drove down rents, OR did it only reduce the rate of yearly increasement? :-)
• zombot 7mo ago
  In other news: Water is wet. Still, it probably bears repeating. I'm sure some NIMBYs said more housing would drive up prices.
• kleiba 7mo ago
  Before moving to Europe, I always had this conception of Germany as being very good at organizing things, especially anything involving engineering. It doesn't take long to set this picture straight. > From 2015 to 2024, Austin added 120,000 units to its housing stock—an increase of 30% Compare that to the following [1]: > The [...] government [...] intended to build 400,000 new homes annually, including at least 100,000 social housing units. This target was significantly missed from 2021 to 2024. In each year from 2021 to 2023, fewer than 300,000 new homes were built. So, the city of Austin alone build on average 12,000 new housings each year, while all across Germany, they failed to build 300,000 new units. That's roughly a 1:25 ratio. So, how much bigger is Germany than Austin, Texas? More than 80 times bigger. Is that just because big projects don't scale linearly? I would think that that's definitely one factor. Also, I'm not convinced that economy of scale laws apply here, given that this is not one company building 300,000 houses. But it does show a number of problems inherent in Germany's current situation: (a) shortage of skilled laborers; (b) high cost of labor; and (c) exorbitantly much red tape. These three points alone are among the most frequently cited factors that companies feel inhibit business, and it holds across disciplines. [1] https://www.wsws.org/en/articles/2025/08/20/vmjm-a20.html https://www.wsws.org/en/articles/2025/08/20/vmjm-a20.html
  • jdasdf 7mo ago
    >But it does show a number of problems inherent in Germany's current situation: (a) shortage of skilled laborers; (b) high cost of labor; and (c) exorbitantly much red tape. These three points alone are among the most frequently cited factors that companies feel inhibit business, and it holds across disciplines. There are 9 billion people in the world, roughly half of them are perfectly capable of doing manual labor. There is plenty of skilled labor, and the cost is frankly not that high, you just need to let them work. Can we be serious here? There is one and only one cause of "high housing prices" and that is a political choice to make housing expensive. Don't tell people what they can or can't do with their property. Don't prevent people from being brought in to build stuff. Do these 2 things and housing will be built if the price is truly high. Anything else is bullshit.
    • nslsm 7mo ago
• fzeroracer 7mo ago
  I feel like there was something else at play. For reference, I moved to Austin in 2018, my rent for my apartment was about 1200/month. In 2022 (the year I left), my rent jumped suddenly to 1600/month despite new apartments near me, and all of the apartments I looked into had similar jumps. And anecdotally speaking my coworkers all reported similar massive rent spikes. It feels more like this is associated with the tech industry cooling significantly in Austin so they can't get away with pricing bumps. This isn't to say new housing doesn't help, but it certainly didn't prevent me from getting fucked on rent.
• deleted 7mo ago
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• ggm 7mo ago
  Please bear in mind when you discuss "rent control" in the USA you really do mean the version you see in your locale. The idea that rent control sui generis failed worldwide is (in my personal opinion) a stretch. Public housing also has many models. State owned. State funded but via cooperatives. Part state. state assisted co-buy. There's lots of models and so it is also a bit bogus to talk as if public housing has one shape. I don't like the tone of input here, there is jeering and name calling and ACKSHEWALLY type responses so I am not going to continue, I just wanted to say: don't forget the lessons learned in Austin may not extend world-wide.
  • zahlman 7mo ago
    > Please bear in mind when you discuss "rent control" in the USA you really do mean the version you see in your locale. The idea that rent control sui generis failed worldwide is (in my personal opinion) a stretch. Can you cite a version of it that worked?
    • ggm 7mo ago
      From an economist? no. From rent activists? Sure. From The Mayor of London? He wants it. From economists in London? They don't want it. From rent activists in Berlin? It worked for their client pool. From economists in Germany? Mixed outcome. The thing is, there is no neutral arbiter. The people who say it failed, are systems level reviewers with overal economic takes. The people (like me) who say it succeeded are looking at sub-cohorts of the housing economy who otherwise would be homeless. Success is complicated.
      • zahlman 7mo ago
        I didn't say anything about who wants the policy in the future. I asked for an example where it achieved its stated objectives in the past. > The thing is, there is no neutral arbiter. There are, however, arbiters who pre-register metrics for success and then don't move the goalposts. That way people can at least see what you want and what you're willing to sacrifice.
    • ammonumfisher 7mo ago
• anovikov 7mo ago
  Is it simply normal supply and demand? They had massive surge of prices that made construction more profitable so after a time lag, building boom happened, bringing prices back to the average long-term trend. If some place becomes 'affordable', its economy suffers because good people don't like living in places where housing is affordable - they move out. Hey, here's a good way to improve 'housing affordability' locally: dumb down schools. People with cash will move out and prices will fall. Something suggests me it's not the solution really lol. Affordability is relative. System always balances itself on the level that barely over 50% of people can afford housing (because it's a democracy). There's no fixing to it unless one abolishes either democracy (so no one cares what people want and developers have a free roll building as much as they want), or market economy (when the Party provides housing as it pleases).
• alecco 7mo ago
  Sure, but it's not that easy. The swaths of new people need infrastructure and support: schools, hospitals, police, fire stations, roads, water, sewage, flood prevention, etc. That's a lot of money upfront. This is why most cities in the EU block many projects like these. Also those people will saturate downtown making it lose its culture. I'm always amazed at the American way of "just throw money at the problem".
• deleted 7mo ago
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• silexia 7mo ago
  I am trying to build new homes in Washington state. I have been navigating a gauntlet of a five step process where eleven departments have to give approvals at each step and it has taken five years. This is just to split a twenty acre parcel into two ten acre parcels.
• subtextminer 7mo ago
  I live in Austin. In the 1980s, there was a building boom that collapsed. Austin had 23%(!) apartment vacancy in 1990 after a collapse that started in 1985. It wasn't until about 1993 that prices returned to 1985 nominal values. At the time it wasn't code changes that caused this but excessive lending by Savings and Loan banks. You can research the S&L crisis that required a federal bail out. This cause massive bankruptcy and the creation of an entity all the Resolution Trust Corporation to sell all this near worthless property for pennies on the dollar. This affected all of Texas and also Louisiana and Arizona. For Austin this was great as a whole as rents were ridiculously cheap for 10-15 years and it was an economic and cultural catalyst, drawing in hordes of young people from around the country.
  • KolibriFly 7mo ago
    That's a really useful historical reminder
• taeric 7mo ago
  Nevermind the collapse of salaries flowing into the area which is destroying what the market demand is willing to pay for the existing stock? This crowd, of any, should be familiar with how many jobs flowed into that area and the promise of how many more it would be. Only for that to basically evaporate overnight. Like, yes. At a base level, you need enough supply to keep prices down. But, the entire point of supply and demand is that it is two curves that intersect. And the demand curve, if pushed up, will also increase prices. Could you over supply such that you drive down the unit costs in a way that keeps prices down? Of course it is plausible. It is not typical market behavior, though. For that, you need excessive spending by someone.
• KolibriFly 7mo ago
  That feels like the real takeaway: most housing shortages are caused by a pile of small constraints, so you need to remove a pile of small constraints
• wr639 7mo ago
  Up here in Denver I see all kinds of new apartments complexes going up all over. I have not seen the rents coming done because of that yet.
  • sudo_gopnik 7mo ago
    I think Denver has a few other things going for it that simply make it a higher value housing market, namely: 1. Mild weather - dry weather with well defined seasons without 2. Natural recreation - some of the best year-around outdoor recreation in the country 3. More diverse economy - Austin is extremely tech heavy. Anecdotally most people saw dot-com boom hit Austin much harder than 08 crisis. Tech is bleeding right now. 4. Geography - building in Denver is constrained by Rocky mountains. The plains offer endless building but in Texas you can build any direction and topology is very flat. I think the other thing not mentioned here is that Austin saw a huge influx of home buyers in 2020-2024 - most everyone I met during that time that moved from West Coast bought at the high and left within 2-3 years after realizing they couldn't handle the crumbling infrastructure and hot summers. Many of them have been holding onto these properties and trying to rent. This only put more pressure on another group - those who bought properties specifically for short-term rentals (e.g. Airbnb). Those who did stay are see massive headcount reductions in tech industry. Meanwhile there are many natives who would love to live closer but are stuck with properties purchased in '21-'24 in Round Rock, Georgetown, San Marcos, Taylor, etc. So IMO this a perfect storm of not just building housing supply (which is great - the best thing the city has managed to do in the past 15 years), but also significant demand correction. As someone born and raised in Austin and a homeowner within the city - I am ecstatic about decline in rents and home values. Austin became what it is in part because it was affordable. We have no nearby mountains, hot summers, poor infrastructure, poor politics, a heavily polluted coastline --> there was no reason for it's prices to be as high as they were.
    • wr639 7mo ago
      I have been to Austin only once for South by Southwest back in 95. As a musician I loved being in Austin, especially for that event. I do get the differences between there and Denver. I love it here. However it is getting hotter here too. It's 85 today and will be 87-88 Friday, and we are running out of water along with the rest of the Southwest. Who knows what's going to happen or where to go to if it gets real bad?
• performative 7mo ago
  this is completely anecdotal, but there's a pretty cool trend i notice where urban places with reasonable renter economies tend to fall into one of three categories 1) "b- to c-tier" cities that build build build build build (austin, slc, phoenix) 2) de-industrialized cities that already have the housing stock (chicago, baltimore, detroit, pittsburgh, philly, worcester) 3) struggling smallish towns and cities that leaned into building better downtowns (there's a billion of em)