Apartment rents in Austin are going to increase by 4.2 percent on average in the next few months, according to data from Marcus & Millichap, a real estate investment firm.
Firm associate Kent Myers said rental rates are increasing because there has been a decline in the construction of apartments in Austin during the past 18 months. The reduction in apartment construction cannot meet the needs of the city’s increasing population, he said.
“Due to the capital market being constrained, it has made it very difficult for developers to build apartments because they can’t take out loans,” he said.
Construction loans are risky because it’s hard to tell if there is a strong market for an apartment being built, Myers said. Because developers have not been able to take out loans, they cannot build apartments, he said.
Students will have to readjust their budgets for the upcoming semesters if rents increase, said James Beard, a West Campus real estate agent. Typically, a two bedroom apartment in West Campus ranges from $1,200 to $1,400, Beard said. Students can expect to pay $50 to $100 more if rents do increase, he said.
“You have no idea the frustration this is causing for students,” he said.
He said Austin has one of the highest rental rates in Texas. Two-bedroom apartments in Houston and Dallas cost about $1,000, Beard said.
Sara Lynn, Duval Villa Apartments manager in North Campus, said when the economy took a turn for the worse two years ago, there was a sharp decline in rental prices.
“[Last year] we only had 20 apartments covered compared to this year, when we have about 60
apartments [leased out],” Lynn
As the population increases and more people come to live in Austin, Lynn said rental prices will keep getting higher.
Government and political communication junior Jaime Garcia said he would definitely have to change his budget if
“With the rent increase, I would have to rent textbooks instead of buying them,” Garcia said.
He said he prefers living in West Campus because his classes are within walking distance from his apartment and that other people might have to leave West Campus altogether if they can’t afford the increase.
“I think students should be more aware of [a rent increase] because this is the first I’ve heard of it,” Garcia said.