> I've been skeptical of the claim that new construction drives rents down.

It can, but not in isolation.

It requires a couple additional variables such as population demand (rate of growth of Austin has reduced since the COVID boom [0]), existing stock (Texas had a building boom and bust in the 1980s [1] that decoupled it's housing market from the rest of the US), and a shift from buying to renting.

That said, the peers I have who work in professional real estate (not realators - as in actual MDs for REITs or multi-generational landlord families whose parents went to school with Governers and Mayors) are starting to shift away from real estate to equities because of headaches around succession planning and reduced margins.

What is ending up happening is megacap REITs like Equity Residential, Essex, Avalon, etc are buying out older groups, taking stakes in new developments, and shifting away from selling condos to perpetually leasing. At their size they can afford to have significant amounts of unleased units becuase they would have made up the cost via higher rent on leased units, tactically building high margins condos and SFHs in high appreciation geographies, or loss harvesting in order to subsidize commercial buildouts like data centers.

Naively saying only construction will reduce prices is false, and if the consolidation aspect is not solved (and sadly, it won't be) it would only lead to an even worse situation.

Additionally, these are hyperlocal problems and what may work for Austin may require significant retooling for Chicago.

[0] - https://www.bizjournals.com/austin/news/2026/01/28/austin-be...

[1] - https://www.nytimes.com/1986/09/14/business/john-connally-s-...