Austin Added 120,000 Homes, and You Won’t Believe What Happened Next
Austin’s median rent is 4% below the national median today, down from a 15% premium above the national median in 2021. The shift follows a decade of zoning and permitting reforms that enabled the city to add 120,000 homes, even as it wrestled with a jobs boom that drove up demand. For renters watching costs climb elsewhere, Austin tests a simple idea: build enough homes, and will rents fall?
In Austin’s Surge of New Housing Construction Drove Down Rents, Pew Charitable Trust researchers Liz Clifford, Seva Rodnyansky, and Dennis Su examine how a decade of zoning, permitting, and financing reforms has reshaped Austin’s rental market and what that means for renters at every income level.
Key Takeaways:
- Rent Reversal. Austin’s median rent fell from $1,546 in December 2021 to $1,296 in January 2026, moving from 15% above the national median to 4% below it, despite the city gaining 18,000 residents.
- More Relief for Older Housing Stock. Rents in older Class C buildings, which house lower-income tenants, fell 11.4% from 2023 to 2024, more than four times the 2.6% drop in luxury Class A buildings.
- Affordability Gain. The income needed to afford Austin’s median one-bedroom rent fell from 95% of area median income (AMI, a standard benchmark for local earnings) in 2017 to 84% in 2024.
The researchers compare Austin’s housing production and rent trends against Texas and U.S. averages, drawing on Census Bureau housing-stock data from 2015 and 2024 and Apartment List rent estimates from 2021 through 2025. This design isolates the changes specific to Austin, since comparable Texas cities don’t see the same declines.
Here’s what they uncovered:
Supply concentrated where demand is tightest. Zoning changes encouraged new supply where renters competed the hardest for housing. For example, Austin’s Vertical Mixed Use zoning category, created in 2007, incentivized density and cut parking minimums 60%. The upzoning produced over 17,600 homes near jobs and transit. And Austin leads the state here: Austin issued 957 apartment permits per 100,000 residents, nearly three times San Antonio’s 346, the next-highest producer in Texas. That much added competition is what pushed rents in large buildings down 7% from 2023 to 2024, the steepest drop of any large U.S. metro that year.
Older, lower-cost buildings see the sharpest declines. From 2023 to 2024, older “Class C” building rents fell 11.4%, more than four times the 2.6% drop in newer “Class A.” The paper doesn’t say why directly, but new construction skewed toward large buildings, which made up 47% of all new homes since 2015, and those compete most directly with Class A, not Class C. Based on Pew Charitable Trust’s previous research, it is likely that the new buildings pulled higher-income renters away from older buildings, leaving Class C landlords with fewer renters to fill their homes and less leverage to hold rents steady.
Broad rent drops improve affordability for typical earners. The AMI-share improvement is a wage-adjusted version of the same rent decline: the income needed to afford Austin’s median one-bedroom fell from 95% of area median income in 2017 to 84% in 2024, calculated for a single-person household. Because the underlying rent drop applies broadly, the paper frames it as a “real improvement in affordability” for typical renters.
The findings suggest cities can borrow a few moves from Austin’s playbook to ease rents: legalizing larger buildings near jobs and transit, eliminating parking mandates that raise construction costs, and pairing density bonuses with public bond financing for income-restricted homes. Austin’s own 23,000-home shortfall estimate, though, suggests this pace of building still isn’t quite enough.
While the work to improve affordability isn’t finished, Austin shows rent relief follows housing supply when cities clear enough barriers to building.
Photo by Quintin Soloviev via Wikimedia Commons
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