Austin Mayor Says Housing Supply Key to Affordability as Market Cools

Austin Mayor Kirk Watson emphasizes that boosting housing supply is crucial for preserving affordability in one of the country's rapidly expanding cities. He highlights recent reforms that have helped temper the previously overheated housing market.

During a fireside chat with Realtor.com CEO Damian Eales at the Realtor.com 2026 SXSW Open House, Watson addressed the critical issue of housing. He underscored the need for cities to prioritize the construction of more homes to ensure long-term economic stability.

“If cities lack an adequate housing supply, it affects affordability and has repercussions on generational wealth,” Watson stated.

Austin's housing market experienced a significant surge during the pandemic boom, making it one of the most competitive markets nationwide. In May 2022, homes reached a notable peak, spending a median of just 16 days on the market, while the median list price approached $630,000, according to Realtor.com data.

Three years later, the landscape has changed dramatically. Recent data indicate that homes are currently remaining on the market for a median of 46 days, with the median list price decreasing to $525,000. There has been a significant rise in active listings, with a nearly 250% increase reported.

Rental prices have shown signs of easing. Rents have declined by 10% from their 2022 peak, dropping from $1,625 to $1,460 in 2025. After accounting for inflation, the graph indicates a price decline exceeding 18%.

Watson acknowledged the city's initiatives aimed at minimizing regulatory obstacles as a significant factor in reducing housing costs.

Watson expressed that Austin was progressing at its own pace. Officials expressed a desire for increased supply. Both the multifamily and single-family sectors have incurred high costs, raising concerns about affordability. This escalation in expenses has been attributed to the extensive time consumed in the process.

The city has implemented reforms to streamline various aspects of its permitting process. The average wait time for initial site plan reviews has decreased significantly, from a typical range of 87 to 99 days to just 32 days, a 56% reduction. Follow-up review cycles have decreased to just under 15 days, nearing the city's target of 14 days.

Watson also discussed important developments regarding federal housing policy.

Watson emphasized the bipartisan backing of the bill, which secured an 89–10 vote. However, he noted that its effects on Austin could be minimal, as the city has already enacted numerous zoning and land-use reforms specified in the legislation.

The mayor expressed a desire for enhanced financial incentives aimed at cities that implement supply-focused housing policies.

“Funding is essential for us to enhance our supply capabilities in certain situations,” he stated.

Watson proposed that federal incentives, including grants tied to land-use reforms or upzoning policies, could help cities expedite housing development.

He stated, “If you do these things, or you have done these things, we will incentivize your doing them,” emphasizing that funding could facilitate the development of additional housing.

Watson addressed the difficulties in securing funding for infrastructure projects, attributing them to voter skepticism about the fiscal management of prior administrations. In response to growing concerns, the mayor continued to unveil a draft framework in early 2026 that introduces a new “decision tree” process to enhance oversight and increase transparency for upcoming bond elections.

On Thursday, the Senate approved the 21st Century Road to Housing Act, a comprehensive piece of legislation that includes numerous reforms to enhance housing affordability.