Before (courtesy Google maps):
The renovation is so well done that I actually (if just momentarily) thought this might be new construction. But it is not -- the building was built in 1959. The owner was there supervising the renovation when I went by a couple weeks ago. He was nice enough to show me around. As you might guess, each unit is now tricked out with hardwood floors, granite countertops, undermounted sinks, designer fixtures, and the other accoutrements expected by moderately affluent, single professionals over age 30. Here's the Craigslist ad; asking rent is $1,275 per month (all of the units are one-bedrooms).
These "before" and "after" shots vividly illustrate, I think, the difference between "filtering up" and a general rise in rents. As I've explained before:
People understand that a tight housing market leads landlords to raise rents. What they often don't seem to understand is that a tight housing market also causes some landlords to invest more money in their properties in order move them into a more expensive submarket. That's how a shortage of units in the $1,200/month submarket (for example) can hurt someone shopping in the $800/month submarket.
This is why it's a mistake to dismiss the beneficial effect of new, higher-end housing, as so many people in Austin tend to do. The people in the market for high-end housing are ultimately going to get it, one way or the other: if it's not provided through new construction, it will be provided by the owners of existing down-market units, who will upgrade their cheaper units with new floors and fixtures and mark up the rent.
As an aside, some might be tempted to call this "gentrification" but I'll stick with "filtering up." "Filtering up" (at least as I use it) has a very specific meaning: the process by which a particular building shifts to a more expensive housing submarket as a result of the owner's capital investment. "Gentrification," to the extent the word retains any usefulness at all, denotes a neighborhood's general shift from poorer to richer residents. (I know this because that acclaimed expert on the dynamics of urban housing markets -- the Centers for Disease Control and Prevention -- says so.) What's more, gentrification isn't necessarily triggered by new capital investment. Often, it's simply triggered by a shortage of housing somewhere else; the sudden inflow of new capital -- evidence of gentrification, perhaps -- comes later.