Austin’s Housing Turnaround: A Model for Affordability

After decades of rapid growth, Austin, Texas, faced a housing crisis in the 2010s. However, a series of policy reforms implemented starting in 2015 successfully increased housing supply and reversed rising rent costs, offering a potential blueprint for other cities grappling with affordability challenges.

The 2010s Housing Crunch

Austin’s popularity surged in the 2010s, driven by high-tech job growth and a desirable lifestyle. This influx of residents led to intense competition for housing. From 2010 to 2019, rents in Austin increased by nearly 93%, the highest increase among major American cities. Home sale prices rose by 82%, exceeding the rate of increase in any other Texas metropolitan area.

Policy Reforms and Increased Housing Supply

Recognizing the growing crisis, Austin initiated a range of policy changes aimed at encouraging housing development, particularly rental units. These reforms included changes to zoning regulations to allow for larger apartment buildings, especially near employment centers and public transportation. In 2018, voters approved a $250 million bond measure dedicated to building and repairing affordable housing. Permitting processes were also streamlined to accelerate development and reduce costs.

These efforts proved effective. From 2015 to 2024, Austin added 120,000 housing units, a 30% increase – more than three times the national growth rate of 9%.

Falling Rents and Improved Affordability

The increase in housing supply directly impacted rental costs. By January 2026, Austin’s median rent had fallen to $1,296, 4% lower than the U.S. Median of $1,353. This decline occurred despite a population increase of 18,000 residents between 2022 and 2024. Notably, rents in apartment buildings with 50 or more units decreased by 7% from 2023 to 2024, the largest drop recorded in any major U.S. Metropolitan area. Rents in older, non-luxury buildings (Class C buildings) catering to lower-income renters fell by approximately 11% during the same period.

Key Policy Changes

• Mixed-Use Zoning (VMU): Introduced in 2007, Vertical Mixed Use zoning relaxed regulations for projects incorporating building-design quality and eco-friendliness, incentivizing construction with increased unit allowances and reduced parking requirements. As of February 2024, over 17,600 units were built or in development within VMU-zoned areas.
• Targeted Rezoning: Strategic modifications to zoning rules in areas like downtown Austin and near the University of Texas, utilizing density bonus programs to encourage the inclusion of income-restricted units.
• Accessory Dwelling Units (ADUs): Amendments to land development codes in 2015 eased regulations for ADUs, reducing minimum lot sizes and parking requirements. From 2015 to 2024, Austin permitted 2,850 latest ADUs, a rate nearly four times higher than 2010-2014.
• Parking Requirements: In 2023, Austin eliminated minimum parking requirements for nearly all property types, becoming the largest city in the U.S. To do so.

Affordable Housing Initiatives

Austin actively pursued affordable housing through density bonuses – allowing taller buildings with more units in exchange for including income-restricted units – and bond measures. The 2018 $250 million bond measure and the 2022 $350 million bond measure (approved with 71% of the vote) provided funding for affordable housing construction and rehabilitation. The Affordability Unlocked program further eased regulations for projects with at least 50% income-restricted units.

These initiatives led to Austin leading the country in affordable housing construction in 2024, with 4,605 affordable housing units built, more than double the number built in 2023.

Looking Ahead

Austin’s success demonstrates that addressing housing shortages requires a multifaceted approach. By removing regulatory barriers, encouraging diverse housing types, and prioritizing affordability, the city has reversed rent growth and improved housing options for its residents. Austin continues to pursue forward-looking reforms, including revising building codes, streamlining permitting, and facilitating the construction of smaller apartment buildings, to further address housing underproduction and enhance affordability for current and future residents.