Steering Austin’s Phenomenal Growth Toward a Bright Future

AUSTIN—Austin, a tech hub that has become one of the fastest-growing cities in the nation, has grown wider, longer, taller, and denser. And there’s hope that it may become more closely knitted together via an upcoming massive transportation project that could bring more cohesion between affluent areas and traditionally underserved neighborhoods.

Austin’s technology entrepreneurship has been legendary since 1984 when a 19-year-old student named Michael Dell started a computer company in his dorm room at the University of Texas. Today, many major technology firms have an office or a plant in Austin.

Over the years, the city’s robust job growth has created a real estate boom with heavy construction and rising prices, although there’s been a hiccup or two.

Austin has doubled in population every 20 years since the 1800s, said Laura Beuerlein, executive vice president of Heritage Title of Austin, speaking at the ULI Housing Opportunity Conference in Austin. The pace of growth translates to 178 new people arriving every day.

The blur of growth has presented a plethora of opportunities and challenges for Austin, the capital of the Lone Star State. A ULI panel of local experts explored the issues during a panel called “Austin Past, Present, and Future.”

For Austin residents, a retrospective look into the ugly mirror of the early 1900s can be troubling. Many decades ago, the redlining practices of banking and business interests restricted lending and growth in the minority communities.

The compounded forces of segregation and underfunded pockets of poverty and other discouraging practices resulted in a concentration of underserved minority communities on the eastern side of Austin, said Lila Valencia, Austin’s city demographer.

Freeway development

Suburbanization and freeway development spread growth to Austin’s suburbs and left the east side of Austin further behind.

“This city was started with the street grid system and street cars,” said Annick Beaudet, mobility officer for the city of Austin. “And like many other cities, with white flight, we started suburban pattern development.”

Recently, the city has employed several strategies to promote growth in East Austin and throughout the city, including encouraging the creation of transit-oriented developments, Beaudet said. In recent years a number of new projects have been built in east Austin, including Hines’ T3 Eastside mixed-use project and growth near the Plaza Saltillo commuter rail station.

Austin places value on transportation that doesn’t involve cars, Beaudet said.

“We’ve been recognizing that for short trips—two miles or less—the bicycle and walking, and transit are absolutely necessary for quality of life and affordability and to opening up opportunities to all Austin-ites,” she said. Safety for pedestrians cannot be overlooked.

“What have built on since 1998 is our ability to fund our bicycle network and get serious about the American Disability Act with our sidewalk network,” Beaudet said.

Interstate 35 reconstruction

The transportation game-changer for Austin could be the reconstruction of Interstate 35, a north-south highway that is notoriously clogged as it cuts its way through the eastern side of downtown Austin. The Texas Department of Transportation will soon launch the major rebuilding effort that will take years to complete.

The freeway has long served as a noisy and intimidating barrier between the east side of Austin and the affluent glitz of downtown where numerous high-rise residential and office towers.

The new Interstate 35 will be depressed below grade, creating opportunities to consider deck parks to be built above the lowered freeways.

A cap of green space formed as a public park over the freeway could benefit the adjacent neighborhood and allow more quality downtown prosperity to migrate more freely to the east.

“We are going to do our best to reconnect East Austin and West Austin,” Beaudet said.

Downtown residential

Downtown Austin has benefited from an urban body of water called Lady Bird Lake, named after the former first lady. Numerous construction cranes are near the waterfront where high-rise projects are being built.

The downtown residential surge began under leadership of former Austin Mayor Will Wynn, who was elected in 2003. The young mayor articulated a vision calling for Austin to increase its downtown population to 25,000 by the year 2015. The city fell short. Only 14,300 were living downtown in 2023, the Downtown Alliance reported. But Wynn’s leadership spawned an impressive construction boom and demand for upscale high-rise living.

In the last two years, the sales prices of downtown’s residential units have surpassed $1,000 per square foot, said developer and broker Kevin Burns, CEO of Austin-based Urbanspace Real Estate + Interiors.

Downtown Austin has trails and urban parks to promote healthy living, among other benefits, said Burns, who is developing a downtown residential tower called The Modern.

Burns is a proponent of the city’s artistic vibe.

A large statue of country music star Willie Nelson graces a downtown corner, reminding passersby of Austin’s reputation for good music and great musicians.

“We truly are the live music capital of the world,” Burns said. “There’s something you can walk to—from a live music perspective—every day of the week.”