AUSTIN (KXAN) — The data is clear: rent is way up in Austin.
New data from Redfin shows Austin rents rose 48% from May 2021 to May 2022. The Austin area was the top metro with year-over-year rent jumps, followed by Nashville, Seattle and Cincinnati.
Austin’s increase was the largest increase in Redfin’s rental data history, which started in 2019, according to the Thursday release. The median asking rent was $2,707.
Are these rent increases considered price gouging?
Price gouging during a disaster is illegal, per state statute. Though this is typically seen in prices of gas or food, this also includes taking advantage of a disaster to sell or lease lodging at “exorbitant or excessive price.”
However, there legally is no limit to how much a landlord can increase rent from one lease to the next, per the Texas State Law Library.
David Mintz, the vice president of government affairs for nonprofit trade organization Texas Apartments Association, said price gouging is not necessarily what we are seeing in Austin. He said the increases in rent mirror the price jumps seen in the housing market with demand outpacing Central Texas housing supply. He said rent is driven by market conditions.
“If you compare what’s happening to the cost of rent, with the cost of buying a house…it’s the same thing, except that the cost of houses has gone up at a higher rate than the cost of rent has in many cases,” Mintz said.
Some of the causes of rent hikes include increasing construction costs for new apartments and property tax increases, Mintz said. Multi-family property owners are not eligible for homestead exemptions or property appraisal caps.
Mintz said while rent control may sound good in theory, it would separate people in rent controlled units and non-rent controlled units, which creates “winners and losers.”
“When you put an artificial constraint on what somebody can charge, you start to create disincentives to new development, the very thing that we need to help bring some balance to the market,” Mintz said.
Is rent control an option?
Texas cities can create local rent control ordinances “in certain cases,” according to the Texas State Law Library.
These ordinances require the governor’s approval. A state of disaster must also be in effect, and the city must show a housing emergency exists. If approved, a city can continue or discontinue rent control like how a governor continues or discontinues a state of disaster, state statute says.
The city of Austin said it had no information related to rent control in Austin.