The Economist January 15th 2022 pp25|United States|The future of Austin|”City Limits”|”Texas’s capital city is on the rise as a tech hub. Can it emulate San Francisco’s success while avoiding its problems?”
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Summary by 2244
Construction cranes have been a mainstay throughout Austin for more than a decade.
In the last decade Austin Texas increased its population by one-third and is currently “America’s 11th largest city.” The growth has been driven by tech firms like Google, Oracle, Facebook (Meta) and of course Tesla locating there. Out of state high-tech workers have followed in search of “a higher quality of life with no state income tax, lower housing costs” and with politics that are “the closest to San Franciscos of any Texan city.” “Austinites embrace the motto ‘Keep Austin Weird’, cultivating a funky creativity. Austin is also home to the University of Texas that “helps churn out brainy workers” and “promotes close ties with local firms.”
“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 Bay Area’s high cost of housing...[Breyer]...wanted a base somewhere where young people building companies could afford to live.”
The sudden influx of companies and workers largely from other places in Texas but also from the likes of San Francisco, Boston and New York have taxed the infrastructure. Austin now “has some of the worst congestion of any Texan city” but with “billions of dollars…being spent expanding public transit and widening a major thoroughfare” there will be “an awkward period of time as we go from here to there…” explains Steve Adler, Austin's mayor.
Austin is also dealing with a housing crisis with demand outstripping the ability to expand supply. Prices have increased 56% “between March 2020 and November 2021” and “a further 20% rise is expected in 2022.” Now “October mortgage payments, as a share of income, were the eighth-least-affordable of any metro area in America.” Local government is trying to increase the supply of housing, by changing the zoning code to allow more density, but these efforts face opposition from “a cohort of longtime locals who oppose changing the character of the city.” “Without more housing, Austin risks losing artists, musicians and the creative class that has made the city so attractive to others” notes Mayor Adler.
Homelenssness became a visible problem after public camping was decriminalized in 2019 but in May 2021 “voters [turning to the right in a bipartisan manner] reinstated a ban, making it illegal for the homeless to camp in public spaces. Most public spaces have [since] been cleared.”
Unlike the Bay Area, Austin has plenty of buildable land in suburbs a drive away from downtown Austin. Austin is also early in its current “‘life cycle’, which means ‘the city and state leadership have an opportunity to do things creatively that may work very well’” predicts Mr. Breyer. “There is also a strong desire among many of Austin’s new arrivals to avoid recreating the Bay Area.” Patrick McKenna (One America Works) “warns of the risk of local communities not sharing in the prosperity that tech firms create for their employees and shareholders…”
With Austin already a blue enclave, in a red Texas, many wonder about the political future. Joe Lonsdale, a venture capitalist, claims “The majority of people fleeing California are fans of a free society or more to the right.” His perspective, one of business leadership, is one of supporting “initiatives like reinstating the camping ban and recently launched an anti-woke university.” As Steve Adler can't run for reelection due to term-limits , the November Mayor’s race is wide open. Some spectulate that the next mayor maybe a "business-friendly moderate.”