The Housing affordability crisis in Austin has reached a boiling point. Recent news surrounding Councilwoman Mackenzie Kelly receiving notice from her landlord regarding a $500 per month minimum rent hike is one notable example but not unfamiliar. Many families across Austin are receiving similar communications. This sharp increase in housing costs is breaking up our community, creating financial barriers to access healthcare and other living necessities.
We can all recognize the hardship of an unexpected rent increase, especially while trends point to wage growth remaining relatively static. Unfortunately, this circumstance isn’t expected to change anytime soon and there are long-term consequences to consider.
One-third of all Austinites identify as Hispanic or Latino, according to the U.S. Census Bureau. But less than half of Hispanic and Latino households in Austin own their home, according to a recent report by Zillow, compared to 64% of white households. In this challenging housing market, this will be a difficult statistic to reverse.
Residents in East Austin and the outlying Eastern Crescent are having to choose between living in the neighborhoods that generations have called home for decades and pay higher taxes/rents or choose to move someplace more affordable.
As a native Austinite, I have been a vocal advocate addressing the inequities and disparities impacting the quality of life of our local Austin Hispanic and Latino community. As people are displaced, forced out and move away from the Eastern Crescent of Austin, we must ask ourselves what that will do to the community and its ability to persevere, support each other, and advocate for itself.
Recent property appraisals have created a double edge sword. For those that own, it is an opportunity to turn a profit and sell, likely moving out of the city for more affordable options. And for those that rent, appraisals have considerably increased monthly rent. According to a recent report by Rent.com, nearly 50% of all available apartments in Austin cost more than $2,100. When tenants face a rent increase, their ability to move is often limited. Even if they are working, they do not have enough cash to pay for the lump sum of a first month’s rent plus a security deposit. This is a huge barrier for those living paycheck to paycheck, now an estimated 65% of Americans.
We must think differently and be pragmatic about empowering the renter’s market. There are companies that offer an alternative, called security deposit insurance, through which renters pay a nominal monthly fee instead of a substantial cash security deposit in advance. This is important because it keeps valuable cash to be used on other family expenses. Companies like Rhino state they have saved renters almost a billion in cash deposits not-paid to date by offering such a product. There is currently $45 billion in cash security deposits nationwide, with over $2.4 billion in the state of Texas alone.
Work is being done on this issue. The City of Austin recently announced it will sell city-owned property to families affected by gentrification. This new policy allows the city to price homes below market rate – another great step forward in keeping our families, friends and neighbors who are struggling an opportunity to stay in Austin.
Immediate and short-term fixes for these issues are hard to come by as prices keep rising. It is going to take concerted effort by our elected leaders, community activists, and others that can impact the rental environment. We must focus on making sure everyone in Austin has access to quality and affordable places to live to keep our communities thriving.
Paul Saldaña is the Co-Founder of the Hispanic Advocates Business Leaders of Austin (HABLA) & Austin Latino Coalition.