Minimum-wage earners need to work 147 hours a week to afford a one-bedroom apartment in Austin
Two recent studies confirm what renters already know: The rent's still too damn high in Austin.
A report from the Harvard Joint Center for Housing Studies out this week found 48% of renters in the Austin-Round Rock area spent at least 30% of their monthly income on housing in 2021; a quarter spent half their paycheck on housing. Federal guidelines say renters should pay no more than 30% of their household income on housing.
Nationally, the study showed that financial burden is at an all-time high. The Harvard study also found the stock of lower-priced housing — think apartments and duplexes — is dwindling.
At an event announcing the study's release Wednesday, Clark Ivory, a homebuilder and housing advocate said the solution to these affordability issues is obvious: build more housing — specifically, multifamily housing like apartments and duplexes.
But Ivory said that’s tricky. While the construction of multifamily housing has increased since the pandemic, ever-rising interest rates have slowed projects.
"The rise of interest rates, I think, is actually understated a little bit in the report," he said. "Multifamily [housing construction] has been really strong this year and last. It's going to be weakened in the next 18 months, because these projects have a long horizon to come online."
With those horizons come additional headwinds — like increased construction costs and complicated development regulations at the local level that could contribute to the slowdown, Ivory said.
On top of that, Federal Reserve Chair Jerome Powell has signaled interest rate hikes are likely coming down the pike.
An Austinite earning minimum wage would have to work 147 hours a week to afford a one-bedroom apartment, according to the study. That translates to a $55,440 salary, the highest required annual income for a one-bedroom in any major Texas city.
To comfortably afford a one-bedroom in Austin, the NLIHC analysis found, a renter must earn $26 an hour — well above the median hourly wages for service, early education and construction-related jobs.
For Austinites, the news is a familiar refrain.
Despite a recent relative slowdown, Austin's population has exploded over the last decade or so, and housing costs have risen commensurately.
But it's not all bad news for Austin renters: An analysis by ApartmentData last month found the average rent here dropped last year for the first time in two years.