Austin built a lot of housing fast. Rents fell. What could Seattle learn?

Seattle and Austin have a lot in common.

Both have lots of tech companies. Seattle has Amazon and Microsoft. Austin has Tesla and Dell. Each city has its signature foods: Tacos in Austin, and coffee in Seattle.

But lately, one thing sets the two cities apart: Housing costs.

In the Seattle region, average apartment rents have climbed about 5% since 2022, according to ALN Apartment data. In the Austin area, rents moved in the opposite direction. They fell about 6% in 2023 and another 4% in 2024 and 2025.

Austin is not cheap. But in recent years, it became a national outlier. While rents kept rising in many big cities, Austin’s fell. That raised a simple question: How did that happen? And is there anything Seattle could copy?

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To understand Austin’s experience, it helps to start with the pandemic, when Austin saw one of the sharpest rent spikes in the country. Remote work tempted thousands of newcomers to move there. Rents jumped 20% to 25% year over year, according to KUT Housing Reporter Audrey McGlinchey (Audrey is on leave at a Columbia journalism fellowship this year).

“ Builders were looking around saying, 'There's a lot of money to be made,'” McGlinchey said. “ So they start getting projects in place. They started the long process often of building tens of thousands of new apartments in the city.”

Projects that began during the pandemic started opening in the years that followed. By then, the picture had changed. Population growth slowed. Fewer people were moving to Austin. But the new apartments kept coming.

The result followed a classic supply-and-demand pattern. More homes, less demand. Rents dropped.

Most of that housing was market rate — new apartments with pools and gyms. That kind of housing often draws criticism, because rents are higher than in new buildings than in old buildings. But housing researchers say it still matters. Building newer, more expensive apartments frees up space in older, cheaper apartments, which decreases the pressure for rents to rise in older buildings.

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In an analysis published in the Journal of Urban Economics, researcher Evan Mast found that “constructing a new market-rate apartment that houses 100 people” eventually frees up 45-70 apartment spots in below-average-income neighborhoods.

But Austin is doing more than simply following the boom-and-bust construction cycle. City leaders aim to keep the production of housing going by removing the obstacles that slow the process down.

“Austin really stands out among big cities as one of the cities that has built the most amount of housing that consistently is trying to make it faster and easier to build lots of different types of housing across the entire city,” Jenny Schuetz told KUOW. Schuetz wrote a book called "Fixer-Upper, How to repair America’s Broken Housing System."

“That's very different from what we see in a lot of the big expensive coastal cities where there's sort of a fear of growing too much too fast, and where the elected officials are typically sort of working around the edges, but often making it harder to build rather than easier to build,” she said.

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Schuetz contrasts that with cities like Seattle, where officials often want more housing, but also want to layer in protections, requirements and conditions that slow things down.

She borrows an analogy involving bagels popularized by New York Times columnist Ezra Klein.

“Seattle has tended to be an everything bagel kind of place, so they may want to pass pro-housing reforms, but also it wants to have tenant protections and inclusionary zoning and things on top of that that may limit the effectiveness of the supply oriented policies,” Schuetz said.

“Texas is a good example of just a plain bagel," she continued, "You want to increase supply, you're gonna pass a lot that increases supply without any frills on top.”

One example: Austin has eliminated the requirement that developers include parking spaces at their apartment buildings.

Another example: Austin has an affordable housing fee that builders pay, as Seattle does, but in Austin the fee is an option that allows the builder to build taller buildings, whereas in Seattle the fee is required whether the builder takes advantage of the extra height allowance or not.

That isn’t to say Austin has abandoned affordable housing. McGlinchey said the city has stepped up the production of subsidized housing significantly.

“These are big changes,” she said. “But these changes are relatively new and I think the building boom that we’ve seen more recently that has brought rents down is really the market just doing what the market does… builders see demand and they build a bunch of new apartments.”

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Most of the apartments that pushed rents down were approved under older rules, and the boom is already fading. Higher interest rates and slower population growth have made new projects harder to finance. Construction has slowed sharply.

There are also downsides to Austin’s approach. Redevelopment pushes out existing renters when older buildings are torn down or renovated.

“I can’t fully explain, but we’ve actually seen eviction filing rates go up in the city as rent prices have gone down,” McGlinchey said. And Texas law limits how much cities can protect tenants.

There are broader concerns, too. More people mean more pressure on roads, water systems, and more construction on environmentally sensitive areas. “Austin has strong environmental protections,” McGlinchey said, but “people worry at the same time, are we sort of eroding what people love about this city while just sort of building, building, building to address this demand that we've had for housing?”

McGlinchey does not expect Austin’s rent drops to last.

“People like to make money,” she said. “In the same way that builders responded to this incredible demand of people moving here during the pandemic, they area responding to rent prices going down. That makes financing a lot harder. If you can’t say to investors, ‘Okay, look, here’s the income I can promise you.’”

Not all of Austin’s lessons can be directly translated to Seattle. The Austin metro region is far less dense than Seattle’s. That means there’s more room in Austin to slide in large apartment buildings.

Furthermore, the city dominates its metro region, whereas Seattle is only the largest city in a cluster of smaller cities making up its metro region. Seattle has taken the bulk of the region’s growth, while some cities, such as Medina or Lake Forest Park, have not grown nearly as much.

Austin’s example reinforces that given enough new construction, runaway rents can be tamed. And research suggests that new reforms that make it easier and cheaper to build new housing could increase the speed with which builders can respond to the next spike in housing demand.

But Austin’s approach doesn’t solve every problem. And it leaves open questions about how to minimize the number of displaced residents and the environmental costs that come with runaway growth.

Research links

• Pew Report
• Journal of Urban Economics

Hear more stories like this one on KUOW's Economy podcast, Booming.