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Zach Fischer
Zach Fischer is a researcher and graduate from the University of Warwick. His main interests are housing policy and online extremism. He has experience working with organisations such as the Living Wage Foundation and Citizens UK, as well as running interviews with the UN in Cyprus. His inventive dissertation took a systems theory approach to hate speech on twitter, and is currently being turned into a lecture for the cybernetics society.
Lower prices are the dream of many a voter across the ideological spectrum. Both Trump and Mamdani waged campaigns promising this siren. The issue with deflation is, whilst easy to promise, it usually implies either economic anxiety or supply-limiting price controls.
So, how has Austin Texas achieved rent decreases without either of these pitfalls? And how did a city in Texas become the guinea pig for the California movement taking policy wonks by storm?
Austin has had incredible success, with rent falling 22% from its peak in August 2023. This comes after the pandemic gave Austin its highest rise in rents ever in 2021, and even in 2022 it rose faster than any other major city. Austin became a hub for remote workers during the pandemic, meaning demand for housing spiked whilst supply was unable to increase.
Austin is the testing ground of ‘Abundance Economics’, and has so far passed with flying colours. This term was coined in reference to the popular book by Ezra Klein and Derek Thompson, which argues for the benefits of removing regulations that get in the way of building more key infrastructure.
This is a pushback against what the authors see as a culture of misplaced caution in the housing world. Confirming this attitude, City Council Member Jose ‘Chito’ Vela, speaking to the Texas Tribune, said Austin’s rent decline was a result of a changing political culture around housing. He told the Tribune that their previous concern of new market-built housing causing gentrification ‘has objectively been shown to be false’.
The culture he refers to is extremely prevalent, as there is a widespread fear that new housing will destroy the character of an area. This fear is cross-political, held by left-wing people afraid of gentrification from higher socioeconomic migration and right-wing people fearing lower socioeconomic migration.
This culture shift was the work of Austin’s YIMBYs, who worked tirelessly to support local politicians with YIMBY sympathies, including re-electing Kirk Watson who had previously supported ambitious redevelopment.
This led to legislative victories, including decreasing the minimum lot requirements single-family homes were required to have, removing required separation between units and legalising ‘tiny homes’ of 400 square feet. All of these were bundled together to form the HOME initiative, which despite controversy, was supported by a coalition that included Preservation Austin, Austin Habitat for Humanity, and the American Association of Retired Persons’ Austin branch.
The result? Austin’s private developers built nearly double the affordable housing units as San Francisco, with similar populations.
The mindset change here is crucial. The main barrier to supply in Austin was not single-family homes, but homes for people with other needs. There are plenty of people who are hampered, rather than helped, by large space requirements. There are young, single renters who need little space and want homes as cheap as possible. On the other side of the spectrum are older people with impaired movement. Decreased lot requirements allows them to have large communities within close walking distance. By considering the needs of these people, and accepting the necessary trade-offs regarding space, people are given the option for a cheaper home and no longer forced into the market for single-family homes that don’t suit their needs.
This is the beginning of a movement all over Texas. While Austin was originally at the forefront, Texas now has four of the top ten US cities by housing permits, including Dallas at number one. All of these cities are beginning to see rent decreases, and it won’t be long till the movement stretches across the US and begins to impact the UK.
This is not just a victory for Austin – this is a playbook for YIMBY’s everywhere. Expensive housing affects everyone, but broad issues can create broad coalitions. If this coalition can work its way into local government, small-seeming legislative wins can have great effects.