memusk has predicted that Austin will be “the biggest boomtown America has seen in 50 years.” From 2010 to 2020, its metropolitan area had the second fastest growth in the country: its population expanded by a third. Austin, already the 11th largest city in the United States, could soon displace Silicon Valley’s San Jose in the top 10.
If the proliferation of oil platforms was once the symbol of the vitality of Texas, today it is the number of cranes that assemble new skyscrapers in Austin, reflects Evan Smith, head of the Texas Tribune, newspaper. Meta, née Facebook, recently confirmed expansion plans there, leasing 33 floors in what will be the city’s tallest building when it’s completed next year. Musk’s Tesla and Oracle, a software giant, moved their headquarters to the Texas capital.
Bay Area residents have flocked there seeking a better quality of life in a place with no state income taxes, lower housing costs and fewer COVID-19 restrictions. Austin’s politics is the closest to San Francisco’s of any city in Texas. Austinites embrace the motto “Keep Austin Weird,” cultivating original creativity. University of Texas (OUTSIDE) in Austin helps produce smart workers. Jay Hartzell, OUTSIDEhe is the former dean of the business school and promotes close ties with local businesses.
Jim Breyer, a prominent venture capitalist, created a second headquarters for his investment firm in Austin and moved there himself after noticing that younger entrepreneurs were put off by the high cost of housing in the Bay Area. . “The Bay Area is untouchable when it comes to next-generation deep technologies around TO THE and quantum and risk opportunities”, he predicts. But he wanted a base somewhere where young company builders could afford to live.
The arrival of Californians and others is causing problems similar to those in San Francisco but on a smaller scale. Austin has some of the worst congestion of any city in Texas. Billions of dollars are being spent on expanding public transportation and widening a major thoroughfare, but these projects will take years. “We don’t have those things yet, and we still have more people coming in, so there’s going to be an awkward period of time as we go from here to there,” Austin Mayor Steve Adler explains.
After voters decriminalized public camping in 2019, homelessness became more visible in Austin, with people occupying parks and public spaces in scenes reminiscent of San Francisco. Last May, voters reinstated a ban making it illegal for homeless people to camp in public spaces. Most public spaces have been cleared.
But the problem of homelessness persists, and rising housing costs could make it worse. Between March 2020 and November 2021, the median home value in Austin increased 56% (the second largest increase of any city or town after Kalispell, Montana), with an additional 20% increase expected in 2022 , according to Zillow, a real estate company. In October, mortgage payments as a percentage of income were the eighth least affordable of all US metropolitan areas. OUTSIDE has started paying signing bonuses to woo professors. “We used to call teachers in California and tell them how much they would save if they moved to Austin,” says Mr. Hartzell. Now other universities “are playing tricks on us.”
To increase the supply of housing, pro-growth politicians and residents will have to battle a cohort of longtime locals who are opposed to changing the character of the city. Some think “if we don’t build it, they won’t come”, explains a politician, identifying a form of neighborhood protectionism similar to that of the Bay Area. The city is trying to enact a change to its zoning code to make it easier to increase density, but residents sued; the case is still making its way through the court. Without more housing, Austin risks losing artists, musicians and the creative class that has made the city so attractive to others, says Mr. Adler.
As it looks to tackle the downsides of being a prosperous city, Austin has a few things going for it. For one thing, there is a lot of land within easy reach of Austin. Thirty minutes in any direction one can find homes that are much more affordable, compared to the landlocked Bay Area. It’s also earlier in its “life cycle,” meaning “city and state leaders have an opportunity to creatively do things that may very well work,” Mr. Breyer predicts. This could include doing more to prioritize infrastructure, housing affordability, and combating homelessness.
There is also a strong desire among many of Austin’s newcomers to avoid recreating the Bay Area. “People who come here are very conscientious about not repeating the same mistakes,” says Patrick McKenna, a techie who moved from there and is the founder of One America Works, which connects talent with new tech hubs. He warns of the risk of local communities not sharing in the prosperity that tech companies create for their employees and shareholders, as happened in San Francisco, leading to inequality and fueling backlash.
red and blueberry
Conventional wisdom suggests that as more Californians move to Texas, the Lone Star State will become more Democratic. However, Austin is already blue. (Rick Perry, a former governor, once described Austin as the “blueberry in tomato soup” of Texas.) Instead of pushing Austin to the left, California dropouts could push the city further to the center. “Most of the people fleeing California are fanatics of a free society or more to the right,” says Joe Lonsdale, a venture capitalist, who also describes himself. He has supported initiatives like reinstating the camping ban and recently launched an anti-awakening university.
The mayoral race in November will be a “Rorschach test of how this city sees itself,” says Mr. McKenna. Mr. Adler is unable to run due to term limits. Many expect him to win a business-friendly moderate. ■
This article appeared in the US section of the print edition under the headline “City Limits”.