How Texas Beat California on Housing
San Francisco and Austin are both known for their trendsetting tech sectors and cultural scenes. But while Austin is enjoying the best of times, for San Francisco, it’s starting to feel like the worst.
San Francisco’s population has dropped for the fourth year in a row. It saw one of the largest percentage declines among major U.S. cities during the pandemic. Meanwhile, Austin’s population is exploding while rental prices continue to get cheaper and cheaper.
In Austin, you can rent a gorgeous apartment for about half the price of a similar place in San Francisco that only has about half of the amenities.
“I had a one-bedroom in San Francisco, a lot smaller. I didn’t have an in-unit washer-dryer,” says Alim Virani, an engineering manager at Etsy who moved from San Francisco to Austin during the pandemic. “Here, I’m living in the heart of downtown. Wonderful views; [a] two-bedroom; really sprawling, modern building. I’m getting way more for a little bit more.”
Virani isn’t the only one making the cross-country move. The greater Austin area grew by 11 percent between 2020 and 2024. Yet despite the influx of people, prices haven’t gone up—they’ve actually dropped.
Jake Wegmann, a professor at the University of Texas at Austin who specializes in housing affordability and real estate development, says there are several reasons why Austin’s rents are falling even as more people move to the capital of the Lone Star State. But there’s one key reason: In Texas, counties can’t zone outside city limits.
That opens the floodgates for new construction. Developers outside Austin’s city limits can simply decide to build 100 new units.
“There are some regulations,” Wegmann explains. “It’s just a whole lot less regulated than probably just about any other state in the country.”
Compare that to San Francisco, which, along with New York City, has one of the most regulated housing markets in the country.
“There’s something that’s gone awry when you’ve got prices that only allow for millionaires to access the America
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