You might want to sit down for this. ApartmentList’s "Rentonomics" blog, where you can find detailed, extensive analysis of home rental and buying markets on a regular basis, has published a report that declares Austin the only city in the United States where incomes have risen as quickly as rents.
Using census data from 1960 through 2014, the site compared median renter incomes and median rents, both adjusted for inflation, and found that nationwide, rents risen by 64%, while real household incomes only increased by 19%.
From 2000 to 2010, the report adds, household incomes fell by 9%, while rents rose by 18%. That caused the the share of cost-burdened renters—those who spend more than 30% of income on rent—nationwide to more than double, from 24% in 1960 to 49% in 2014.
As one might expect, rising rents and falling incomes hit renters in the lowest 20% especially hard, resulting in 70% cost-burned renters in that category. However, among renters in the lower middle bracket (making up to $41,186 a year), the increase in cost-burden rates since 2000 has been a significant 22%.
Looking at individual cities, the report noted that while incomes in expensive coastal cities (New York City, San Francisco) had risen greatly, median rents rose at an even faster rate. Some cities in the South and Midwest had stagnant or falling incomes while rents continued to rise. In other cities, incomes rose, but rents rose faster. A couple of cities—Las Vegas and Phoenix—added enough housing stock to keep rent increases low.
That brings us to Austin. As the "Rentonomics" report has it, our rents rose rapidly from 1980 to 2014, but incomes grew even faster. Austin’s doubling of population since 1980 has caused rents to increase by more than 40%, but real incomes increased even faster. The report concludes that "strong employment growth in Austin has attracted many millennials, but wage growth means that Austin is the only urban area where incomes have risen more than rents."
There are a couple of possible reasons why it might not feel that way on the ground in Austin. One is that incoming residents might represent a large portion of that increasing income, while residents with lower incomes—musicians, artists, other non-tech creatives, and low-income people in general, as common wisdom would have it—left the city.
It’s also helpful to keep in mind that the Austin metro area, when it comes to the U.S. Census, is rather large. It encompasses part or all of five counties, and includes booming cities that are still considered suburbs of Austin—Round Rock, Georgetown, San Marcos—as well as smaller towns such as Kyle and Taylor. That’s not to say that many major cities don’t have the same sprawling conditions, but it’s helpful to keep in mind that a lower rents in places outside the city limits could be contributing quite a bit to Austin’s median.
You can dig into the Rentonomics stats for the whole country at the link below.
• How Have Rents Changed Since 1960? [Apartment List Rentonomics]