How Austin became 1 of nation’s least affordable cities
AUSTIN, TEXAS >> Over the past few years, in one of the fastest-growing cities in America, change has come at a feverish pace to the capital of Texas, with churches demolished, mobile home parks razed and neighborhood haunts replaced with trendy restaurants and luxury apartment complexes.
The transformation has perhaps been most acutely felt across East Austin and the neighborhood of Montopolis, a 2.5-square-mile patch southeast of downtown, where unobstructed views of the ever-expanding skyline have made the historically Black and Latino neighborhood a sought-after community.
And the momentum is nowhere near abating. These days, construction sites and cranes feel like permanent fixtures across the neighborhood, where longtime residents have watched with growing anxiety as chic coffee shops, yoga studios and pricey bars have inched closer and closer.
“We knew it was coming,” said Francisco Nuñez, who for nearly two decades lived at the Cactus Rose Mobile Home Park until it was sold to a developer to make way for amenity-rich apartments that now fetch more than double what he once paid in rent.
A decade ago, Austin, often deemed a liberal oasis in a staunchly conservative state, was among the most affordable places to live. Now, according to a forecast prepared by Zillow, a real estate company that tracks affordability, the Austin metropolitan area is on track to become by year’s end the least affordable major metro region for homebuyers outside California. It already has surpassed hot markets in Boston, Miami and New York City.
With an average of 180 new residents moving to the city every day in 2020, housing inventory is very low, realtors said. Multiple offers, bidding wars and blockslong lines outside open houses are commonplace.
Home sale prices in Austin skyrocketed to a record median of $536,000 in October, up from about $441,250 a year ago. And they have more than doubled since 2011, when the median sale price was $216,000, according to the Austin Board of Realtors, a trade group. Rentals, too, have surged, with the average cost of an 864-squarefoot apartment now $1,600.
“Austin is the worst-kept secret,” said Job Hammond, a secretary-treasurer with the board.
Price surge
With the University of Texas flagship campus, gentle rolling hills and a vibrant music scene, Austin has long been an attractive place to call home. But surging prices have created a brewing housing crisis that is reshaping the city of nearly 1 million people, and pushing mostly low-income Black and Latino residents like Nuñez away from cultural centers, transportation hubs, grocery stores and other amenities that come with urban living, activists said.
The lack of affordable homes has been underscored by the relentless sight of homeless encampments outside City Hall and under busy highways. (The city recently began efforts to clear them after voters approved a public camping ban this year.)
In 2018, while already experiencing explosive growth, at least 35 Austin neighborhoods were undergoing some stage of gentrification. An additional 23 neighborhoods were at high risk of doing the same, according to a study commissioned by the city and conducted by researchers with the University of Texas.
The numbers are likely higher today, said Heather K. Way, a law professor at the university and one of the study’s authors.
“You drive down a street one day and all of a sudden you’re thinking, ‘What happened to the apartment building that stood there last week?’” said Way, referring to the rapid demolition of older housing occurring in some Austin neighborhoods.
The displacement of lowincome residents, in a city where about 13% live below the poverty line, has concerned Austin officials to such a degree that a grassroots movement led them to hire the city’s first displacement officer this year. Nefertitti Jackmon has been assigned the challenging task of preventing widespread gentrification even as cranes continue to dot the skyline and new structures climb ever higher.
Displacement problem
Jackmon said that though plans remain in flux, her office will be allocated about $300 million over the next 13 years to be spent on addressing displacement, such as securing more affordable housing in affected neighborhoods. She doesn’t mince
words when describing the challenges that lie ahead.
“In Austin, Black and Brown neighborhoods have been marginalized and underinvested,” Jackmon said. She also said she wants to expand participation of local residents in the early process of new developments. “We are saying development can happen
without displacement.”
But not everyone is convinced a new displacement office will have a significant impact.
“It’s an aspirin for cancer,” said Fred McGhee, a local historian and longtime resident of Montopolis, a neighborhood once home to formerly enslaved people and Mexican migrants who came to work in cotton fields.
On a recent day, McGhee walked out from his home and pointed in several directions, toward construction sites or newly built luxury buildings. “Not long ago these used to be all wetlands,” McGhee said. “Now all you see are new developments or plans for one.”
The East Vue Ranch is one of them. On the land that was once the Cactus Rose Mobile Home Park, the luxury complex has a sleek swimming pool, game room and enclosed dog park. Nearby, another apartment complex now sits on land once occupied by a historical Black church. Another Black church, built in the 1860s, was demolished to make way for a road to accommodate the new traffic. And a neighborhood hair salon was replaced with a trendy South American bakery.
“This has become the tale of two Austins,” said Susana Almanza, a longtime activist. “The rich keep building in our neighborhoods and the poor keep getting displaced. It doesn’t end.”
From March 2020 to February, despite the pandemic, Austin nearly led the nation in new construction, with close to 42,000 new residences, according to a housing report by Rice University’s Kinder Institute for Urban Research.
Much of the city’s expansion has been attributed to the recent arrival of tech titans, including Apple, Amazon, IBM and AT&T — and more recently Tesla, whose CEO Elon Musk, already a resident with a rocket site in South Texas, said that the company would move its headquarters from Palo Alto to Austin.
Those big moves — joining other major tech companies, such as Dell and IBM, already fixtures in the region — have meant an infusion of a younger and more affluent population, giving rise to the city’s new moniker of “Silicon Hills.”