Report on Austin Housing Prices

Judge Glock

Robert Keene

Issue Areas

Texas has long led the nation in attracting migrants from other states because of its low cost-of-living and affordable housing. Austin has long been the fastest growing metropolitan region in the state and, since 2010, in the nation. Yet the city’s boom appears peculiar because Austin no longer has low-cost housing. Starting in 2012, the median price of a new home in the Austin metropolitan area shot up from a little over $200,000 to about $500,000 dollars. With the sole exception of Boise, Idaho Austin saw the greatest housing price increase during the pandemic: almost 25 percent in one year.

Austin has become the new face of the affordable housing crisis in the United States. Despite Texas’s general latitudinarian attitude toward building and development, Austin housing prices now more closely resemble those in fellow tech boom towns Denver and Seattle rather than in neighboring Dallas and Houston. What changed?

The following analysis shows that much of the price increases in Austin reflects national trends and temporary increases in housing demand, caused by a growth in both population and local income. The city is continuing to build at a rapid rate, yet, considering the unprecedented nature of the boom, it can and must do more if it is going to prevent housing prices from soaring further. This article first demonstrates the increased demand for housing in Austin. It then shows some problems with Austin’s existing housing supply despite the recent increases in building, and then notes some policy problems that have made building more difficult. Finally, it offers policy suggestions to keep Austin building through the current boom. Although Austin on the whole has had more success than is recognized in keeping up with demand, reforms are needed to ensure Austin remains an affordable and livable city.