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After a slight pandemic slump that was a rare boon to tenants, Austin's rental market has rebounded. Fueled by job growth, relocations and an increasingly pricey housing market, the average monthly rent in the Greater Austin area rose to $1,335 in April, exceeding pre-pandemic rates, according to the latest market report from ApartmentData.com.
Bruce McClenny, president of ApartmentData.com, attributes this change to increasing demand, which gives landlords the confidence to raise rents. Since January, the Austin market has absorbed a monthly average of 1,403 units, meaning that renters have leased that many more units than were vacated. This absorption rate is significantly higher than that of the first four months of 2020. "Absorption is demand," he said.
Other metro rental markets are seeing similar gains, McClenny said, but Austin has some specific advantages. Job creation by companies such as Tesla, Oracle and Samsung and the return of some leisure and hospitality sector positions fuel demand. So too does a steady rate of relocations. Data released by the U.S. Census Bureau on Tuesday shows that the five-county Austin-Round Rock metro grew faster than any other metro area in the country between 2019 and 2020.
Up until early this year, the local rental and housing markets were on divergent post-pandemic paths. Renters were more likely to have suffered job loss as a result of the pandemic or to work in impacted industries, such as hospitality. A glut of new construction in recent years also meant that supply outpaced demand.
The housing market, on the other hand, saw increased demand due to continued job creation, especially in the tech and professional sectors; a millennial-heavy population, with many members starting families and looking for more spacious residences; and record-low inventory.
The scorching housing market may now play a role in the rental market rebound as record-high sales prices and record-low inventory prolong, or even halt, some prospective homebuyers' searches. "Austin's home market is probably hotter than ever," McClenny said. "That has to play into the rental market right now."
The rental market rebound appears to be spread out across suburban and urban core areas. The fastest growing submarkets, according to the ApartmentData.com report, over the past three months are:
- Cedar Park-Leander-Four Points
- Downtown-South Congress-Barton Springs
- The University of Texas at Austin-Mueller area
During the pandemic, residents flocked to the suburbs in search of more space. Despite this urban flight, Austin's urban core submarkets are rebounding more quickly than those in other Texas metros. "Austin has such a unique, desirable urban core," McClenny said, adding that the city's mobility challenges may also be at play as renters return to the office—and their commutes.
The ongoing reopening process is one reason to believe the Austin rental market will continue to grow this summer, which is a typically strong leasing season. One concern, however, is the relatively high number of apartments under construction—nearly 16,000, according to the report—which could temper growth if there isn't enough demand to absorb them.
"You've got a few competing elements here," McClenny said. "I could see a scenario with reopening where it just pushes demand and rents higher."
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Soccer, the sport of many names, is reflected on and off the pitch in the multicultural city of Austin, from fan clubs like Los Verdes to the Austin FC roster.
Spanning across four continents and 12 countries, Austin FC's roster comes from all corners of the globe.
Austin FC's first signee, Rodney Redes, hails from Paraguay. So does the club's first Designated Player, Cecilio Dominguez. Five other players' hometowns are in South America, while five others are from Europe or Africa. While most on the roster signed to Austin FC from other MLS teams, Austin FC players have played as far north as Finland, as far east as Israel and as far south as Argentina.
English and Spanish are the most spoken languages on the team, although Zan Kolmanic speaks Slovenian and the club is well-traveled, too: Jon Gallagher has lived in six countries, while Kekuta Manneh, the club's only true Austinite, left behind all he knew in Gambia to move to the city in high school.
The multiculturalism on the pitch goes hand-in-hand with the city of Austin itself. Over 30% of the city's population is of Hispanic or Latino descent, and Austin is a majority-minority city (meaning non-Hispanic Whites make up less than 50% of the population).
It's brought even the most unlikely groups together; while supporters of Liga MX and the English Premier League used to be on opposite sides of the bar, now they come together in green.
Jorge Chavez, a member of Austin FC fan club Austin Anthem, said that Austin FC helps unite a city full of travelers and move-ins.
"A lot people here are from all these different places, and they might not have that much in common with each other, but now they do," Chavez said.
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Less than a week after a fatal mass shooting on Sixth Street and amid rising concerns about violent gun crime, state Republican leaders and gun lobbyists gathered for a celebratory press conference, where Gov. Greg Abbott signed into law seven bills expanding gun rights, including one allowing permitless carry.
"This is a prolific day for the Second Amendment in the state of Texas," House Speaker Dade Phelan, R-Beaumont, said at Alamo Hall in San Antonio on Thursday.
The bills take effect Sept. 1 and include:
- Senate Bill 19: Prohibits state contracts with companies that plan to divest from firearm ammunition companies
- SB 20: Bars hotels from prohibiting guests from bringing guns into their rooms
- SB 550: Permits a person to carry a gun in any type of holster
- House Bill 957: Exempts suppressors made in Texas from federal regulations
- HB 1500: Designates firearms and ammunition sellers and manufacturers as essential businesses
- HB 1927: Allows residents 21 years of age and older to carry a handgun without a permit
- HB 2622: Designates Texas "Second Amendment Sanctuary State"
This expansion of gun rights comes as violent crime rates rise in major U.S. cities, including Austin, where murders were up 50% year-over-year in April.
This week, Austin police arrested two juveniles in connection with the mass shooting on Sixth Street early Saturday morning, left one dead and 14 others injured. Two months ago, a former Travis County sheriff's deputy shot and killed three people in North Austin, prompting an hours-long manhunt.
"We support the right of every law-abiding American to be able to have a weapon to defend themselves," Abbott said. "That is different from teenagers unlawfully getting access to guns to commit crime. Those are people who deserve to be behind bars for the rest of their lives."
Local public safety advocates have attributed this rise to police budget cuts, which Austin City Council enacted last August, but cities that increased their police spending are also seeing increases.
In light of rising violent crime rates, the Austin Police Department launched a gun crime prevention program in April. Although not all violent crime involves guns, gun violence is increasing and may involve stolen guns or illegally manufactured "ghost" guns. "I'm just very concerned about the number of illegally possessed firearms and how we can curb that," Interim Police Chief Joseph Chacon said during an April 15 press conference.
Rising violent crime rates continue to spur gun sales in the Austin area—and around the country. "In this increasingly dangerous world, people want to be able to protect themselves," embattled NRA President Wayne LaPierre said at the press conference Thursday. "Thank god Texas is leading the way in making that possible.
A long shot
Conservative activists have lobbied for permitless carry for years, without success. But state lawmakers reached a compromise last month after the Senate added a series of amendments to address concerns from law enforcement groups, which worried permitless carry would endanger officers and make it easier for criminals to access guns.
Lt. Gov. Dan Patrick celebrated the bill's passage, which he described as an expansion of Texans' freedoms. "The media needs to understand that you are so far out of touch with where Texans and Americans are on this issue," he said.
Nearly 60% of Texas voters opposed permitless carry, according to an April University of Texas/Texas Tribune poll. Melanie Greene, lead volunteer for the Moms Demand Action Austin group, recently told Austonia that state lawmakers are likely motivated to pursue such legislation because of a small, vocal minority of gun rights activists and the threat of drawing even more conservative opponents in primary elections.
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Austin's tech labor market, which was already tight heading into the pandemic, has grown even more so as California companies flock to the capital city. It's made for a situation where employers are listening more to worker demands to fill job openings.
For tech workers—like their counterparts in the restaurant, construction and myriad other industries facing labor shortages—that means setting their own terms, such as remote work options and higher wages.
"We are living in times when the employees are the king or the queen," said Angelos Angelou, founder and CEO of local consulting firm AngelouEconomics.
A talent center
Lured by the state's business-friendly climate and Austin's growing tech scene, California-based companies such as Tesla, Oracle and TikTok built factories, relocated headquarters and opened offices. Austin posted the highest tech migration rate of any city in the country between May 2020 and April 2021, according to a recent LinkedIn analysis.
With so many new resident businesses, job growth kept pace. The Austin metro ranked fourth nationally for tech job postings growth in March, according to Silicon Valley Bank's latest State of the Markets report.
Oracle relocated its headquarters to the Riverside location in Austin. (Shutterstock)
To fill these roles, local tech companies have to look beyond the city limits. Employers poach from their competitors, recruit recent graduates from area colleges and universities or look to the national labor market for talent, Angelou said.
Summer Salazar, director of employer engagement at the University of Texas at Austin, has seen a huge influx in tech sector job postings on the university's job board in recent months. "We feel that demand," she said.
An employee's market
Jaime Cabrera, 28, recently graduated from the LBJ School of Public Affairs at the University of Texas at Austin and is looking for a policy job at a social media company. He didn't go into his job search with plans to stay in Austin but has seen various intriguing openings, citing Bumble, Lyft and TikTok. "I didn't realize how many companies are here," he said.
The tech labor market also affects employees who are not looking for a new job but instead seeking better benefits or internal policy changes from their current employer.
Lawrence Humphrey, 27, lives in North Austin and works for IBM. Shortly after the murder of George Floyd, he co-founded Tech Can Do Better, which advocates for a more equitable industry. Since then, there has been little quantitative progress in terms of more diverse hiring and other metrics. But there has been a qualitative shift. "Issues around racial equity are just far more of a priority from the perspective of the employees, so therefore it's far more of a priority for the employers," he said.
OG vs. newcomers
Although the pandemic has accelerated the growth of Austin's tech industry, the industry was already established. In the latter half of the 20th century, the city attracted big tech originators like IBM because of its enticingly low labor cost and spawned homegrown giants like Dell—trends that continue today.
The arrival of Silicon Valley tech transplants in other growing tech cities, such as Miami, has led to tension with the so-called old guard. In Austin, such competition has forced companies to compete for workers, leading to more mobility.
"When I was in the job market, my god if you changed jobs often—and often meant once every three years—you were considered a traitor," said Angelou, who headed the Austin Chamber's economic development department from 1984 through 1995, helping to recruit companies such as IBM, Apple and Samsung to town. "Now people change jobs every nine months, it appears, and that is considered a plus."
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