How did Austin make this happen? In short, cities across the Austin metropolitan area built a lot of housing.<\/p>\n\n\n\n
Figure 1: Average Effective Rents in Austin (May 2019 – May 2024)<\/h4>\n\n\n\n![\"\"](\"https:\/\/www.metroabundance.org\/wp-content\/uploads\/2024\/08\/Figure-1-300x176.png\")
\u201cEffective\u201d rent is the amount paid after any discounts or incentives. (Source: MRI Software via KUT)<\/figcaption><\/figure><\/div>\n\n\nWhile \u201cAustin\u201d has received much praise for achieving this feat, it\u2019s important to distinguish between the city and the metro area. The Austin Metropolitan Statistical Area (MSA) includes five counties: Williamson, Hays, Caldwell, Bastrop, and Travis, where Austin mainly sits. The latest Census data shows that the vast majority of population growth in what we call \u201cAustin\u201d was actually in its surrounding suburbs. Indeed, while the MSA population excluding Austin surged by 12% between 2020 and 2023, as seen in Figure 2 below, the city itself grew by less than 1.5%, creating an observable \u201cdonut effect.\u201d<\/p>\n\n\n\n
Figure 2: Change in Austin MSA Population by County<\/h4>\n\n\n\n![\"\"](\"https:\/\/www.metroabundance.org\/wp-content\/uploads\/2024\/08\/Figure-2-300x117.png\")
The City of Austin is located mostly in Travis County, with smaller sections in Hays and Williamson Counties. (Source: Census Bureau)<\/figcaption><\/figure><\/div>\n\n\nSo, it was Austin\u2019s suburbs that largely absorbed the influx of newcomers\u2014because that was where the housing was. Compare the number of multifamily housing units permitted in the Austin and San Francisco MSAs. As seen below in Figure 3, Austin permitted a huge number of multifamily units in the years after the Great Recession, reaching a high of 26,421 units in 2021 compared to San Francisco\u2019s most recent high of 13,373 units in 2018.<\/p>\n\n\n\n
Figure 3: Multifamily Housing Units Permitted in Austin MSA vs San Francisco MSA<\/h4>\n\n\n\n![\"\"](\"https:\/\/www.metroabundance.org\/wp-content\/uploads\/2024\/08\/Figure-3-300x122.png\")
(Source: Apartment List)<\/figcaption><\/figure><\/div>\n\n\nAccording to Apartment List<\/a>, Austin permitted 9.2 new multifamily units per every 1,000 residents, a rate that was 61% higher than the next highest metro, Raleigh\u2014or 3.5 times the rate in New York and 9.2 times the rate in San Francisco. Austin has led the nation in multifamily permitting for seven years, and even with a slowdown this year, it is still on pace to top the list.<\/p>\n\n\n\nThis sustained multi-year increase in the number of multifamily apartments eventually outpaced demand as the pandemic population surge slowed down. Even so, average rents remain elevated above pre-pandemic levels across the metro area.<\/p>\n\n\n\n
Austin\u2019s suburbs were able to absorb so many newcomers because it was relatively easy to build housing in those jurisdictions\u2014and it is to those fast-growing jurisdictions that much of the credit is due, as shown in Figure 4 below. While Austin\u2019s suburbs have long supported the construction of new housing, the city itself has only recently begun saying \u201cyes in my backyard.\u201d<\/p>\n\n\n\n
Figure 4: Change in Population of Austin MSA\u2019s Fastest Growing Cities<\/h4>\n\n\n\n![\"\"](\"https:\/\/www.metroabundance.org\/wp-content\/uploads\/2024\/08\/Figure-4-300x81.png\")
(Source: Census Bureau)<\/figcaption><\/figure><\/div>\n\n\nThe City of Austin is an easier place to build than New York and San Francisco, but it has the highest development fees<\/a> among big cities in Texas and one of the most cumbersome permitting systems<\/a>. Still, from 2010 to 2020, the city managed to build 90,000 housing units, according<\/a> to the City\u2019s Planning Department. In any other context, this would have been amazing news. But over the same period, Austin\u2019s booming economy and robust job creation attracted significant newcomers, and the population grew by 22%, or 175,000 people. Unfortunately, the growth of households outpaced the growth in housing units, creating a supply-demand imbalance, seen in Figure 5 below.<\/p>\n\n\n\nFigure 5: Growth in Austin Households Outpaces Growth in Housing Units<\/h4>\n\n\n\n![\"\"](\"https:\/\/www.metroabundance.org\/wp-content\/uploads\/2024\/08\/Figure-5-300x180.png\")
(Source: City of Austin Planning Department)<\/figcaption><\/figure><\/div>\n\n\nThe pandemic further exacerbated that dynamic, as remote work led to the formation of new households and an influx of telecommuters. Home prices and apartment rents skyrocketed, causing affordability to become a big issue in the 2022 City Council elections. That year, Austin elected a slate of pro-housing candidates to City Council. All of a sudden, nine out of eleven council members supported more housing \u2014 a political sea change.<\/p>\n\n\n\n
In the years before the 2022 elections, City Council had enacted several piecemeal measures that upzoned and eliminated parking mandates downtown, leading to a transformation of Austin’s skyline. The council also created several housing affordability programs, including the highly successful Affordability Unlocked<\/a> program, which expedited the permitting process and loosened restrictions on height, density, and parking. As a result, the program fueled the creation of some 6,100 income-restricted homes.<\/p>\n\n\n\nBut before 2022, Austin had not undertaken a major rewrite of its land development code since 1984. The last attempt to do so, the ill-fated CodeNEXT<\/a> process, began in 2012, cost $10 million, and was eventually voided<\/a> in court in 2020. (The attempted rewrite met its final end in 2022 when an appeal of the 2020 court decision failed.)<\/p>\n\n\n\nWhich brings us back to the present day. Since the 2022 election, the City Council supermajority has undertaken an ambitious set of citywide reforms, including:<\/p>\n\n\n\n
\n- Allowing three housing units by right on any single-family lot<\/li>\n\n\n\n
- Reducing the minimum lot size for a single home from 5,750 to 1,800 sq. ft.<\/li>\n\n\n\n
- Rolling back \u201ccompatibility\u201d height restrictions that were suppressing more than 70,000 housing units<\/a><\/li>\n\n\n\n
- Creating a new density bonus program<\/a> that allows for the redevelopment of commercial spaces into more housing<\/li>\n\n\n\n
- Eliminating parking mandates citywide<\/li>\n<\/ul>\n\n\n\n
While \u201cAustin\u201d has received much praise for achieving this feat, it\u2019s important to distinguish between the city and the metro area. The Austin Metropolitan Statistical Area (MSA) includes five counties: Williamson, Hays, Caldwell, Bastrop, and Travis, where Austin mainly sits. The latest Census data shows that the vast majority of population growth in what we call \u201cAustin\u201d was actually in its surrounding suburbs. Indeed, while the MSA population excluding Austin surged by 12% between 2020 and 2023, as seen in Figure 2 below, the city itself grew by less than 1.5%, creating an observable \u201cdonut effect.\u201d<\/p>\n\n\n\n
Figure 2: Change in Austin MSA Population by County<\/h4>\n\n\n\nThe City of Austin is located mostly in Travis County, with smaller sections in Hays and Williamson Counties. (Source: Census Bureau)<\/figcaption><\/figure><\/div>\n\n\nSo, it was Austin\u2019s suburbs that largely absorbed the influx of newcomers\u2014because that was where the housing was. Compare the number of multifamily housing units permitted in the Austin and San Francisco MSAs. As seen below in Figure 3, Austin permitted a huge number of multifamily units in the years after the Great Recession, reaching a high of 26,421 units in 2021 compared to San Francisco\u2019s most recent high of 13,373 units in 2018.<\/p>\n\n\n\n
Figure 3: Multifamily Housing Units Permitted in Austin MSA vs San Francisco MSA<\/h4>\n\n\n\n(Source: Apartment List)<\/figcaption><\/figure><\/div>\n\n\nAccording to Apartment List<\/a>, Austin permitted 9.2 new multifamily units per every 1,000 residents, a rate that was 61% higher than the next highest metro, Raleigh\u2014or 3.5 times the rate in New York and 9.2 times the rate in San Francisco. Austin has led the nation in multifamily permitting for seven years, and even with a slowdown this year, it is still on pace to top the list.<\/p>\n\n\n\nThis sustained multi-year increase in the number of multifamily apartments eventually outpaced demand as the pandemic population surge slowed down. Even so, average rents remain elevated above pre-pandemic levels across the metro area.<\/p>\n\n\n\n
Austin\u2019s suburbs were able to absorb so many newcomers because it was relatively easy to build housing in those jurisdictions\u2014and it is to those fast-growing jurisdictions that much of the credit is due, as shown in Figure 4 below. While Austin\u2019s suburbs have long supported the construction of new housing, the city itself has only recently begun saying \u201cyes in my backyard.\u201d<\/p>\n\n\n\n
Figure 4: Change in Population of Austin MSA\u2019s Fastest Growing Cities<\/h4>\n\n\n\n(Source: Census Bureau)<\/figcaption><\/figure><\/div>\n\n\nThe City of Austin is an easier place to build than New York and San Francisco, but it has the highest development fees<\/a> among big cities in Texas and one of the most cumbersome permitting systems<\/a>. Still, from 2010 to 2020, the city managed to build 90,000 housing units, according<\/a> to the City\u2019s Planning Department. In any other context, this would have been amazing news. But over the same period, Austin\u2019s booming economy and robust job creation attracted significant newcomers, and the population grew by 22%, or 175,000 people. Unfortunately, the growth of households outpaced the growth in housing units, creating a supply-demand imbalance, seen in Figure 5 below.<\/p>\n\n\n\nFigure 5: Growth in Austin Households Outpaces Growth in Housing Units<\/h4>\n\n\n\n(Source: City of Austin Planning Department)<\/figcaption><\/figure><\/div>\n\n\nThe pandemic further exacerbated that dynamic, as remote work led to the formation of new households and an influx of telecommuters. Home prices and apartment rents skyrocketed, causing affordability to become a big issue in the 2022 City Council elections. That year, Austin elected a slate of pro-housing candidates to City Council. All of a sudden, nine out of eleven council members supported more housing \u2014 a political sea change.<\/p>\n\n\n\n
In the years before the 2022 elections, City Council had enacted several piecemeal measures that upzoned and eliminated parking mandates downtown, leading to a transformation of Austin’s skyline. The council also created several housing affordability programs, including the highly successful Affordability Unlocked<\/a> program, which expedited the permitting process and loosened restrictions on height, density, and parking. As a result, the program fueled the creation of some 6,100 income-restricted homes.<\/p>\n\n\n\nBut before 2022, Austin had not undertaken a major rewrite of its land development code since 1984. The last attempt to do so, the ill-fated CodeNEXT<\/a> process, began in 2012, cost $10 million, and was eventually voided<\/a> in court in 2020. (The attempted rewrite met its final end in 2022 when an appeal of the 2020 court decision failed.)<\/p>\n\n\n\nWhich brings us back to the present day. Since the 2022 election, the City Council supermajority has undertaken an ambitious set of citywide reforms, including:<\/p>\n\n\n\n
\n- Allowing three housing units by right on any single-family lot<\/li>\n\n\n\n
- Reducing the minimum lot size for a single home from 5,750 to 1,800 sq. ft.<\/li>\n\n\n\n
- Rolling back \u201ccompatibility\u201d height restrictions that were suppressing more than 70,000 housing units<\/a><\/li>\n\n\n\n
- Creating a new density bonus program<\/a> that allows for the redevelopment of commercial spaces into more housing<\/li>\n\n\n\n
- Eliminating parking mandates citywide<\/li>\n<\/ul>\n\n\n\n
So, it was Austin\u2019s suburbs that largely absorbed the influx of newcomers\u2014because that was where the housing was. Compare the number of multifamily housing units permitted in the Austin and San Francisco MSAs. As seen below in Figure 3, Austin permitted a huge number of multifamily units in the years after the Great Recession, reaching a high of 26,421 units in 2021 compared to San Francisco\u2019s most recent high of 13,373 units in 2018.<\/p>\n\n\n\n
Figure 3: Multifamily Housing Units Permitted in Austin MSA vs San Francisco MSA<\/h4>\n\n\n\n(Source: Apartment List)<\/figcaption><\/figure><\/div>\n\n\nAccording to Apartment List<\/a>, Austin permitted 9.2 new multifamily units per every 1,000 residents, a rate that was 61% higher than the next highest metro, Raleigh\u2014or 3.5 times the rate in New York and 9.2 times the rate in San Francisco. Austin has led the nation in multifamily permitting for seven years, and even with a slowdown this year, it is still on pace to top the list.<\/p>\n\n\n\nThis sustained multi-year increase in the number of multifamily apartments eventually outpaced demand as the pandemic population surge slowed down. Even so, average rents remain elevated above pre-pandemic levels across the metro area.<\/p>\n\n\n\n
Austin\u2019s suburbs were able to absorb so many newcomers because it was relatively easy to build housing in those jurisdictions\u2014and it is to those fast-growing jurisdictions that much of the credit is due, as shown in Figure 4 below. While Austin\u2019s suburbs have long supported the construction of new housing, the city itself has only recently begun saying \u201cyes in my backyard.\u201d<\/p>\n\n\n\n
Figure 4: Change in Population of Austin MSA\u2019s Fastest Growing Cities<\/h4>\n\n\n\n(Source: Census Bureau)<\/figcaption><\/figure><\/div>\n\n\nThe City of Austin is an easier place to build than New York and San Francisco, but it has the highest development fees<\/a> among big cities in Texas and one of the most cumbersome permitting systems<\/a>. Still, from 2010 to 2020, the city managed to build 90,000 housing units, according<\/a> to the City\u2019s Planning Department. In any other context, this would have been amazing news. But over the same period, Austin\u2019s booming economy and robust job creation attracted significant newcomers, and the population grew by 22%, or 175,000 people. Unfortunately, the growth of households outpaced the growth in housing units, creating a supply-demand imbalance, seen in Figure 5 below.<\/p>\n\n\n\nFigure 5: Growth in Austin Households Outpaces Growth in Housing Units<\/h4>\n\n\n\n(Source: City of Austin Planning Department)<\/figcaption><\/figure><\/div>\n\n\nThe pandemic further exacerbated that dynamic, as remote work led to the formation of new households and an influx of telecommuters. Home prices and apartment rents skyrocketed, causing affordability to become a big issue in the 2022 City Council elections. That year, Austin elected a slate of pro-housing candidates to City Council. All of a sudden, nine out of eleven council members supported more housing \u2014 a political sea change.<\/p>\n\n\n\n
In the years before the 2022 elections, City Council had enacted several piecemeal measures that upzoned and eliminated parking mandates downtown, leading to a transformation of Austin’s skyline. The council also created several housing affordability programs, including the highly successful Affordability Unlocked<\/a> program, which expedited the permitting process and loosened restrictions on height, density, and parking. As a result, the program fueled the creation of some 6,100 income-restricted homes.<\/p>\n\n\n\nBut before 2022, Austin had not undertaken a major rewrite of its land development code since 1984. The last attempt to do so, the ill-fated CodeNEXT<\/a> process, began in 2012, cost $10 million, and was eventually voided<\/a> in court in 2020. (The attempted rewrite met its final end in 2022 when an appeal of the 2020 court decision failed.)<\/p>\n\n\n\nWhich brings us back to the present day. Since the 2022 election, the City Council supermajority has undertaken an ambitious set of citywide reforms, including:<\/p>\n\n\n\n
\n- Allowing three housing units by right on any single-family lot<\/li>\n\n\n\n
- Reducing the minimum lot size for a single home from 5,750 to 1,800 sq. ft.<\/li>\n\n\n\n
- Rolling back \u201ccompatibility\u201d height restrictions that were suppressing more than 70,000 housing units<\/a><\/li>\n\n\n\n
- Creating a new density bonus program<\/a> that allows for the redevelopment of commercial spaces into more housing<\/li>\n\n\n\n
- Eliminating parking mandates citywide<\/li>\n<\/ul>\n\n\n\n
According to Apartment List<\/a>, Austin permitted 9.2 new multifamily units per every 1,000 residents, a rate that was 61% higher than the next highest metro, Raleigh\u2014or 3.5 times the rate in New York and 9.2 times the rate in San Francisco. Austin has led the nation in multifamily permitting for seven years, and even with a slowdown this year, it is still on pace to top the list.<\/p>\n\n\n\n This sustained multi-year increase in the number of multifamily apartments eventually outpaced demand as the pandemic population surge slowed down. Even so, average rents remain elevated above pre-pandemic levels across the metro area.<\/p>\n\n\n\n Austin\u2019s suburbs were able to absorb so many newcomers because it was relatively easy to build housing in those jurisdictions\u2014and it is to those fast-growing jurisdictions that much of the credit is due, as shown in Figure 4 below. While Austin\u2019s suburbs have long supported the construction of new housing, the city itself has only recently begun saying \u201cyes in my backyard.\u201d<\/p>\n\n\n\n The City of Austin is an easier place to build than New York and San Francisco, but it has the highest development fees<\/a> among big cities in Texas and one of the most cumbersome permitting systems<\/a>. Still, from 2010 to 2020, the city managed to build 90,000 housing units, according<\/a> to the City\u2019s Planning Department. In any other context, this would have been amazing news. But over the same period, Austin\u2019s booming economy and robust job creation attracted significant newcomers, and the population grew by 22%, or 175,000 people. Unfortunately, the growth of households outpaced the growth in housing units, creating a supply-demand imbalance, seen in Figure 5 below.<\/p>\n\n\n\n The pandemic further exacerbated that dynamic, as remote work led to the formation of new households and an influx of telecommuters. Home prices and apartment rents skyrocketed, causing affordability to become a big issue in the 2022 City Council elections. That year, Austin elected a slate of pro-housing candidates to City Council. All of a sudden, nine out of eleven council members supported more housing \u2014 a political sea change.<\/p>\n\n\n\n In the years before the 2022 elections, City Council had enacted several piecemeal measures that upzoned and eliminated parking mandates downtown, leading to a transformation of Austin’s skyline. The council also created several housing affordability programs, including the highly successful Affordability Unlocked<\/a> program, which expedited the permitting process and loosened restrictions on height, density, and parking. As a result, the program fueled the creation of some 6,100 income-restricted homes.<\/p>\n\n\n\n But before 2022, Austin had not undertaken a major rewrite of its land development code since 1984. The last attempt to do so, the ill-fated CodeNEXT<\/a> process, began in 2012, cost $10 million, and was eventually voided<\/a> in court in 2020. (The attempted rewrite met its final end in 2022 when an appeal of the 2020 court decision failed.)<\/p>\n\n\n\n Which brings us back to the present day. Since the 2022 election, the City Council supermajority has undertaken an ambitious set of citywide reforms, including:<\/p>\n\n\n\nFigure 4: Change in Population of Austin MSA\u2019s Fastest Growing Cities<\/h4>\n\n\n
Figure 5: Growth in Austin Households Outpaces Growth in Housing Units<\/h4>\n\n\n
\n