When the rent payment on Leigh Vladyka’s Austin apartment comes out of his bank account, he tries to avoid looking. Each month, almost half of his take-home pay goes to rent. Nearly $1,600 gone from the $3,400 deposited. And there are still utility bills to pay, credit card debt to stress over, and food and gas to buy.
Vladyka does what he can to save. He rarely eats out. He taught a ceramics class this summer to earn extra money. He plans to put a nearly $700 dental bill on a credit card with a promotional period of 0% interest. But he has made little headway against another $7,000 of credit card debt, much of it from a medical emergency. He said he feels ashamed. Then he reasons with himself.
“You really can’t budget yourself into a higher wage,” said Vladyka, who earns about $56,000 a year as an art teacher at an Austin public school. “Or budget yourself out of poverty.”
Vladyka has gotten some relief. He recently received a 7% raise. Last year, he was able to negotiate $150 off his first month of rent, bringing his overall payment down, a trend seen across the region.
Yet, while Vladyka’s rent has gone down and his wages have gone up, he remains what housing experts call “cost-burdened." That means he spends more than 30% of his gross monthly income on housing, including rent and utilities. He lives in housing he cannot afford. He and hundreds of thousands of others in the Austin area are, quite literally, burdened by the price of shelter, meaning they have less income to spend on groceries, transportation and healthcare.
“I think about what it would be like to own a house. To pay off all of my debt. To maybe get a new car,” Vladkya said. “To go somewhere. Buy stuff for people I love. And then I have to stop because I realize it’s making me sad.”
During the pandemic, rent prices surged. In 2021 and 2022, the average monthly rent in Austin and the surrounding suburbs rose nearly 29%. Incomes grew over that time, but nowhere near as quickly.
As a result, a larger portion of people are spending more on housing. In 2022, which is the most recent data, nearly half of Austin-area renters spent more than the recommended share of income on rent. Since 2019, the number of “cost-burdened” renters has grown by 1.6%.
That percentage may seem small. But Alex Hermann, a senior research associate at the Joint Center for Housing Studies at Harvard University, said that equates to 36,000 more renters in the Austin area paying for homes they can’t afford.
The result is that families have had to cut costs in other ways, by forgoing essentials such as food or transportation.
“Whether it's childcare, or care for seniors, or looking at healthcare benefits ... in order for someone to pay 50% of their income on housing, that means they are having to cut back on other things," said Awais Azhar, deputy director at HousingWorks Austin.
There is some financial help available, although it’s limited. In the last two years, the City of Austin set aside nearly $12 million to help low-income families pay their rent. The city recently closed its application portal after receiving nearly 8,000 applications; a spokesperson said the city expects to help about 1,800 of these families.
“The need far outpaces the resources,” Mandy DeMayo, interim director of the city’s housing department, told council members in February. City leaders will decide later this month whether to set aside another $3.6 million for rental assistance.
In the past year, there's been a glimmer of hope. The average price of rent has decreased as thousands of new apartments built at the height of the pandemic begin to open. (Construction has since slowed). On average, rent in the Austin area has fallen about 6% in the past year, according to MRI ApartmentData. By one metric, this is the first sustained drop in rent prices in at least a decade.
“It’s striking. It’s a period when lots of other stuff was getting expensive,” said Jake Wegmann, a real estate professor at UT Austin. “And that’s really good.”
Hermann agrees — but with a caveat.
“Obviously far better to have rents declining,” he said. “[But] it’s not going to bring massive relief to most renter households. And that’s true across the country, just like it’s true in Austin.”
Alison Gonzales would like massive relief. The single mom stresses about money often.
Gonzales pays about $250 less monthly rent than she did earlier this year. But she still needs half of her monthly income to cover the $1,500 rent on a two-bedroom apartment in Northwest Austin. That balloons to a larger percentage of her income in the summer months, when her electricity bill runs high.
Gonzales earns $35,000 a year helping to sell home and auto insurance. She said she sometimes earns a bit more through commission bonuses. She recently got a second job working weekends at Target, which she hopes will help her afford groceries and her cell phone bill — whatever else is due once rent is paid.
“We’ve tried to make cuts and we have,” Gonzales said.
Since Gonzales and her teenage daughter, Sydney, moved in, she has held off on buying living room furniture. For now, they've propped the TV on two plastic bins and watch it from fold-up chairs.
She rarely eats out and often cooks inexpensive meals — meatloaf, spaghetti — or eats the pizza Sydney brings home from her job. Her car broke down over a year ago and she hasn’t been able to afford a new one, meaning she's sometimes stranded in a city with poor public transit.
“We’ll get past everything,” Gonzales likes to say.
But others wonder why it has to be so hard. Kara Foster works in accounting at Austin Pets Alive, a local animal shelter. The 32-year-old recently started earning $50,000 a year.
Her portion of rent on an apartment she shares with a roommate is about $850 a month. Plus fees and utilities, her total is closer to $1,000 a month. It's cheap by Austin standards but consumes a little less than 30% of her monthly gross pay. Technically, Foster would not be considered "cost-burdened" by housing experts.
“This is the most money I’ve ever made in my life,” Foster said. Yet, she said she stresses over one night of eating out. “I think really monkishly because I’m like, ‘No, no, no, if I go out to eat this week I can’t save the $20 and I need that,’ … I definitely expected myself to feel more secure at this point.”
In 2022, Foster took her cats to the vet, something she’d been putting off for years because of the expense. It cost her $600, nearly 20% of her monthly gross pay at the time.
"As soon as you have a little bit more it goes to something else that you weren’t expecting," she said.
Real estate experts expect rents in Austin to continue falling for the next year, as more apartments currently under construction open. After that, rents could resume their usual direction: up, up, up.
“We’ve seen rents go down … we should be excited about that,” Azhar said. “[But] what we’re going through right now, I often see it as course correction. Not necessarily like, ‘Oh, rents have gone down significantly and things are becoming affordable.’”
Sometimes it feels like a miracle when a renter like Vladyka, the public school teacher, gets to spend no more than 30% of their income on rent. Vladyka’s lease ends at the end of this month. He decided he won’t re-sign, convinced he can find a cheaper apartment.
And it appears he has; last week he toured a one-bedroom apartment that typically rents for $1,495 a month. He was able to negotiate it down to $1,300. “That’s an extra $275 that I don’t have to pay in rent,” said Vladkya, referring to the rent he currently pays. He is waiting for final approval on the new apartment. “It can go towards actually paying some stuff off.”
With utilities and fees, his housing costs will make up almost exactly 30% of his monthly gross income. The magic number.
“That’s kind of a big deal for me. I’ve never done that,” he said.
