While Texas’ capital city is often seen as an example of what not to do, one recent trend points in the opposite direction.
According to press reports, residential rent prices in Austin have fallen 6 percent in the past year and 10 percent in the past two years. This bucks a national trend which saw rents go up by approximately 5 percent during the same period.
While rental rates remain higher than they were before the COVID-19 pandemic, Austin’s price drop comes as the city has taken embryonic steps to simplify its notoriously byzantine development policies.
In 2023, the city council passed phase one of the HOME Act, which removed restrictions on certain types of construction. In 2024, the city recently passed phase two of the HOME Act, which reduced minimum lot size requirements. The net result is a far greater housing supply.
Also in 2023, the city eliminated mandated parking minimums. This allows the free market to determine parking, rather than costly government dictates that often lead to massive amounts of unused spaces.
As Texas Scorecard has previously reported, the Texas legislature is likely to examine some of these policy changes during its 2025 session. The Texas Public Policy Foundation has also released a set of recommendations on housing policy.
