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How Austin’s stunning drop in rents explains housing in America

We finally have some good news about housing affordability.

Here is one narrative violation in the usual drumbeat of doom that we’re used to hearing about housing in America: The rent, in many cities across the US, is getting cheaper.

After soaring to Covid-era highs, rents have cooled. Last month, the national median rent was down 1.7 percent from one year prior, according to research from the rental marketplace Apartment List. This made it the biggest annual decline since the company started tracking rent data in 2017.

One success story stands out among all the rest: Austin, Texas, where rents dropped by a full 6 percent over the past year, more than in any other large metro area in the US. The Austin area’s median rent, at $1,274, is back to roughly where it was right before the pandemic — which means that, in 2026 dollars, it’s significantly cheaper than it was in 2019.

For the past decade, Austin has been a standard-bearer for the YIMBY (Yes in My Backyard) movement, passing a barrage of policy changes to make it easier to build new housing, especially new apartment buildings. According to a recent report from the Pew Charitable Trusts’ housing policy initiative, these reforms are responsible in large part for the sharp drop in rents enjoyed by Austinites over the last several years.

Housing economists overwhelmingly agree that, to bring home prices down, cities need to embrace supply-side reforms that cut away the thicket of regulation that make it oddly difficult to do something as seemingly simple as build an apartment building — an argument that I and others at Vox have echoed many times.

But housing markets are enormously complicated and shaped by many factors; it’s challenging for researchers to measure the exact effects of policies like those rolled out in Austin. Pew’s report certainly provides strong suggestive evidence that the city’s policy reforms made a real difference — but remember that, since around 2022, rents have fallen nationwide, too, and in many other cities quite substantially. So it seems likely that at least some of Austin’s rent decline would have happened anyway, even without its full suite of YIMBY reforms.

How do we isolate the impacts of reforms meant to increase housing supply, figure out which ones worked, and to what extent they worked? Those are questions housing experts are taking up right now, and they’re not merely academic ones. Getting them right is how we will claw our way out of a housing affordability crisis that almost no one doubts exists — even as some disagree over how to solve it.

Austin’s housing boom, explained

In the 2010s, a local boom fueled by tech jobs drew hundreds of thousands of new residents to Austin and its suburbs. Following a trajectory familiar to other high-demand cities during that period, Austin’s rents soared — in their case by nearly 50 percent in that period, according to data from the Census Bureau — and single-family home prices climbed even faster. So the city sought ways to rapidly expand its housing supply to meet the surge in demand.

Austin is hardly the only city that has tried to unfetter homebuilding to ease its cost of living. But it is remarkable for the sheer breadth of reforms it’s adopted, Alex Horowitz, project director for Pew’s housing policy initiative, told me — which was one of the most important takeaways from his team’s Austin research. Those reforms have included:

Updating zoning codes across parts of the city to automatically allow the construction of tall apartment buildings in some places rather than requiring each to go through a long and costly permitting process.

Reducing and later, in 2023, eliminating parking minimums for virtually all new homes. (Elsewhere in the US, parking mandates — i.e., a minimum number of off-street spaces available per unit — make housing more expensive, and sometimes physically impossible, to build.)

Making it significantly easier to build accessory dwelling units (ADUs), which are smaller homes that sit alongside houses on single-family lots.

Allowing up to three homes to be built on lots zoned for single-family houses and greatly cutting down the minimum lot size required to build a single-family home, encouraging builders to add small, less expensive starter homes.

Creating density bonuses that allow developers to build taller in exchange for setting aside some units as income-restricted at lower rents — an approach that, the Pew report notes, has added more market-rate and more affordable apartments.

Last year, Austin’s city council voted to legalize apartment buildings up to five stories built with a single staircase, instead of the two staircases required by default in most US building codes — a longtime YIMBY holy grail because it can drop the cost of new buildings and open up more space and unit layout flexibility.

“Not many cities have taken as many different steps as Austin has,” Horowitz said. That matters because passing any single reform — even if it’s a big one, like Minneapolis’s 2018........

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