What can the city do to lower average rents or at least decrease the rate of growth of average rents?

Unfortunately, the influx of an increasingly affluent population combined with market forces and higher property taxes have resulted in rising rents for Austin residents with no sign of a slowdown. This is especially true of new high-density projects on corridors, which are nearly all luxury market-rate units with rents to match. Experts have told us that it is virtually impossible to build our way to affordability in these market conditions, noting that as soon rents or sales prices begin to fall, developers will simply stop

building. To make matters worse, Texas law prohibits common affordability tools used in other states such as rent stabilization, inclusionary zoning and linkage fees. Sadly, Texas is now the only state in the U.S. that still prohibits inclusionary zoning for affordable housing.

That said, there are some actions the city can take help renters:

  • Stop the practice of giving property tax breaks to corporations that locate here in this boom environment. Rising property taxes are passed along to renters in the form of higher rent. When corporations are given a pass, it puts a greater tax burden on the rest of us including renters.
  • Set a formal policy to require stronger community benefits such as affordable housing in exchange for any increased entitlements beyond what is allowed by a site’s existing base zoning (increased height, reduced setbacks, etc.).
  • Take action to retain existing market-affordable housing and stem displacement by ensuring that any zoning changes or code revisions provide strong disincentives against the demolition of housing currently valued at less than $300,000.
  • Commit to a plan to put a fair share of affordable housing in every Council District, recognizing that each district should contain a mix of housing for varied income levels and should consider such factors as access to transit, health care, schools, groceries and other basic services.
  • Recalibrate Median Family Income (MFI levels) to reflect the median income for the area where a proposed project will be built if that area falls below the countywide MFI. Under most of the city’s current density bonus programs, a unit is considered “affordable” if a household earning 60-80% of Travis County’s Median Family Income (MFI) pays no more than 30 percent of its income on housing. The current Median Family Income (MFI) for a family of four in Travis County is $81,400 – yet according to the city demographer, the MFI levels for Council Districts 1 through 4 are barely half that. In District 1, the MFI is $42,150; in District 2, $42,650; in District 3, $36,185; and in District 4, $39,200. Adjusting these metrics to reflect the median income of the area where a project is proposed would help ensure that any affordable units realized through the city’s density bonus programs would actually be affordable to residents of these districts.
  • Ensure anti-displacement policies are a key part of growth planning to avoid displacement of low-income renters as properties are redeveloped.
  • Make publicly subsidized units permanently affordable. Austin’s current affordability periods vary from zero to 99 years, with many affordability periods as short as 5 years or less. Clearly, Austin’s affordable housing shortage will not be solved within these time frames. Any affordable units in projects that receive city subsidies, including increased entitlements through the density bonus program, should remain permanently affordable. This may be achieved through regulatory agreements, community land trusts, deed restrictions or other binding legal instruments.