by James A. Bacon

Who would have guessed? An apartment boom in Austin has knocked down rents for 19 straight months.

There’s an ongoing debate in the comments of Bacon’s Rebellion on how to address the housing affordability crisis in Virginia. My answer is simple: Build more housing. Doesn’t matter if it’s geared to higher-income buyers and tenants. When higher-income residents move into expensive digs, they create a vacancy lower in the housing chain, and when that dwelling is occupied, it creates a vacancy further on down.

Some commenters have poo-pooed such logic as trickle-down economics, They find something unpalatable with the idea of developers building housing mainly for the well-to-do, as if that somehow harms the poor. Despite ample evidence that government projects are among the worst housing anywhere in the U.S., some readers have insisted that state/local government should ensure the construction of cheaper housing targeted to lower-income families directly.

For doubters in market-driven solutions, I present the case of Austin, TX. The reason for the drop in rents, says Governing magazine, is simple: a boom in apartment construction.

The chief reason behind Austin’s falling rents, real estate experts and housing advocates said, is a massive apartment building boom unmatched by any other major city in Texas or in the rest of the country. Apartment builders in the Austin area kicked into overdrive during the pandemic, resulting in tens of thousands of new apartments hitting the market.

On average, builders in the region obtained building permits for 957 apartments for every 100,000 residents between 2021 and 2023, a Texas Tribune analysis of Census data shows — far outpacing the country’s other major metropolitan regions. …

Brand-new apartments and older, cheaper apartments alike have seen rents fall within the last year.

Austin rents are still higher than in the pre-pandemic era, but they have come way down from their highs reached from years of massive in-migration and restrictions on new development.

“We were working under the premise for a couple of decades here in Austin that if we did not allow new construction, that would help preserve neighborhoods and hold down costs,” said José “Chito” Vela. “That has just been objectively shown to be false, and that the contrary approach is true.”