The average Austin rent is now over $1,000 – the highest it has ever been. Rents have risen 50 percent from 2004 to 2013, while median income only increased by 9 percent.
Where Austin renters were once spending around 20 percent of their incomes on rent, it's now up to 30 percent – more than in Dallas, Houston or San Antonio.
A building boom that will bring 11,000 new apartments, many of them in places like South Lamar and East Riverside, is expected to help keep a damper on rents in the short term. But it's also anticipated that demand will soon overtake the new supply as soon as 2015.
There's more after the jump.One of Austin's most attractive features – its low cost of living for a high quality of life – is not what it once was. From the Austin-American Statesman:
“Austin, by reputation, has been the kind of place where people across the economic spectrum can move and not only live, but live well, where waves of newcomers have looked around in astonishment at the houses and apartments available to them, many an easy walk from a Central Market or neighborhood bar or Zilker Park. One of Austin's charms was that even working-class people could enjoy the kind of music and culture available in big cities – and do it while living nearby in a house with a backyard, or an apartment not crowded by roommates.
The mismatch between Austin incomes and its rents has undercut that long-standing appeal. In a little more than a decade, Austin went from relatively cheap to not cheap at all.”
While it doesn't mean that demand to live in Austin will be any lower, it does mean that some people simply won't be afford to live in Austin anymore.
According to the National Low Income Housing Coalition, a renter needs to earn $20.65 per hour to afford a two bedroom apartment at the fair market rent, or an annual income of close to $43,000. In other words, someone working a minimum wage would need to work 2.8 jobs in order to afford such an apartment.
And spending so much on rent has impacts beyond just the people paying it. According to the New York Times, “For many middle- and lower-income people, high rents choke spending on other goods and services, impeding the economic recovery.”
Unfortunately, the trend in Austin is part of a larger trend occurring nationwide. Demand for rentals is up, and especially among young people, of which Austin has plenty. After the housing crisis, homeownership has become more difficult and less appealing than it was before. So if you're in the business of developing rental units, the news is good. But for everyone renting an apartment – and especially in Austin – paychecks are starting to look smaller and smaller.