Decibel

Who's Getting Lower Rents In Austin?

Clip | 7m 37sVideo has Closed Captions

Rent is falling across the city. But many residents are seeing their rent continue to go up.

Aired 04/26/2024

Decibel

Who's Getting Lower Rents In Austin?

Clip | 7m 37sVideo has Closed Captions

Rent is falling across the city. But many residents are seeing their rent continue to go up.

Reports show that rents are going down in Austin. But experts working with lower income families say they’re seeing rent staying the same or even increasing. So who’s getting a deal, and who is paying more to stay in Austin?

Aired 04/26/2024

Decibel is a local public television program presented by Austin PBS

Funding for Decibel is provided in part by Texas Mutual and Roxanne Elder & Scott Borders

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[reporter] Marilu Jaimes had achieved that rare dream in Austin.

Finding an apartment that was close to everything she needed.

She's worried about burning gas because she's going to have to move.

Her rent's gone up and she can't afford to stay.

But reports show that rents are going down in Austin.

So who's getting a deal and who's paying more to stay?

To understand this, we need a broader look at Austin's rental landscape.

Overall, the numbers are coming down.

A study by rent.com showed rents dipping more than 12% year over year.

But why?

[Wegmann] yeah, so it's not all bad.

Jake Wegmann is an associate professor in the Community Regional Planning Program at the University of Texas.

And he describes it this way: [Wegmann] well, they are in correction mode.

We were flooded with headlines about how all of America was moving to Austin and developers responded to that.

[reporter] So Austin's population increased, especially during the pandemic.

About 6% between 2020 and 2022.

And demand for housing increased as well.

This drew a lot of developers to build apartments, and maybe, as it turned out, too many apartments.

One report showed that as of last fall, almost 20,000 more multifamily units were delivered than were leased.

And it's got some landlords offering deals to bring in tenants.

[Wegmann] maybe two years ago they'd feel like they were jostling for an apartment.

And now it's the landlord is saying, hey, you know, like, if you sign this, this 12 month lease, then I'll give you a month or more of free rent.

Right now all the power is with the people looking for apartments.

[reporter] Some people, but maybe not all people.

[Rivera] So I would say the biggest thing has been rent increases.

And we're seeing that throughout Austin in a lot of low-income housing properties, specifically.

[reporter] Jasmine Rivera is an outreach specialist with BASTA, a group that works with low income renters like Jaimes.

She says they see residents struggling with a very tight housing market.

[Rivera] We do have a lot of folks that are saying 'there's no housing I can find that's within my range that I can afford right now.'

And so they're definitely moving to the outskirts of Austin, which is really, really hard.

a lot of these folks have been living here for almost like 15 to 20 years.

[reporter] That's the challenge Jaimes found herself in.

[reporter] So if we have all of these new apartments, why can't lower income families find a place to stay?

[Azhar] Most of our newer housing remains unaffordable if it's market rate... [reporter] Awais Azhar is with HousingWorks Austin and he says part of the problem with a lot of these new buildings?

[construction noise] They're aimed at high-income earners.

Nationwide, 89% of new apartments built in the last couple of years were considered 'high-end.'

They're also the ones getting deals on rent.

One report showed that in Texas cities, luxury apartments saw bigger price drops than middle tier rentals.

[Azhar] What we're seeing in terms of construction of housing is we're seeing, of course, more higher-end apartments being built.

You know, there are households that still cannot meet those rents that are available.

[door shuts] [reporter] This earning gap didn't just increase the going rate for housing in Austin.

It also skewed a number that has a big impact on low income housing: the Median Family Income, or MFI.

Sometimes referred to as the AMI or Average Median Income.

Noelia Mann, interim director of the eviction mitigation team at Basta, explains.

[Mann] So if you're having an influx of high income earners, right, that's going to tip the scale.

But for the most part, newer affordable housing programs are actually tied to the AMI.

the AMI goes up, but like a working class family's income is not increasing in the same way.

So the affordability, I would say, is actually going the opposite way.

It's getting less affordable for regular working class people in Austin.

[reporter] So when the MFI increases the amount landlords can charge for affordable housing also increases.

But experts say wages for lower income workers aren't keeping up.

[Azhar] This gap between housing costs and the gap between income has been growing for over a decade in Austin and other parts of the nation.

So in some ways, we've got a lot of catch up to do.

And rents are still above pre-pandemic levels, even with the price drops.

Azhar says high housing costs can eat into other parts of a family's budget.

[Azhar] Once folks spend more than 30% of their income on housing and utility-related costs, that means they're cutting, funding from somewhere else, whether that's childcare or health care or other basic provisions of life.

Even though I know we're hearing a lot about how rents have, you know, comparatively gone down to their peak during the pandemic, we're still seeing that they're high enough for a lot of households to be struggling.

[reporter] Wegmann says there is a silver lining here for affordable housing advocates.

[Wegmann] This is a great time for the public sector and for nonprofits to scoop up land and to scoop up projects at a lower rate.

Maybe they are now able to acquire more projects during a downturn like this and than they had been planning on.

[reporter] The city is still pursuing its housing goals.

Voters approved 300 million in 2020 for anti displacement efforts as part of the new project Connect Transit Plan.

but those projects will take time to come together.

For Jaimes and others who can't afford their rent now, once she puts in her notice, she says she has about 60 days.

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