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Residents of Major U.S. Cities Flock To Austin -- Because It's Cheaper

by: Joe Deshotel

Sun Apr 13, 2014 at 02:30 PM CDT

Austin is the nation's fastest growing city since 2010. That's not breaking news to those have have lived here at least that long. But, where is everyone coming from and why? The short answer is easy: from other major U.S. cities and...California, and because it's relatively cheaper.

Folks coming from New York or Chicago may appreciate not shoveling snow, but the weather isn't the only reason people are giving up their sprawling metropolis.

Despite the outcry of decreasing affordability by current residents, Austin is still cheaper to live than most established big cities like New York, Boston, Los Angeles, Chicago or Washington D.C.

The housing shortage, let alone the affordable housing shortage, is still pretty apparent in Austin. From talks with local real estate agents I'm told almost every sale ends in a bidding war, and long time renters lament their rent going up at the end of every lease. For many residents it certainly doesn't feel like one of America's most affordable major cities.

More below the jump...

Most city governments would love for their biggest challenge to be finding a place to house new people -- who have jobs-- and the companies who want to create more, but the influx of new residents has put an enormous strain on public infrastructure. Austin's unmatched ability to market itself as a laid-back fun city of creative people with the amenities of a big city and that small town "Mom and Pop" feel has placed the city in an conundrum. We're growing at a rate of 5.4%, with the next fastest city Raleigh, N.C. growing at 3.7%. That has put Austin one spot away from being in America's Top Ten Big Cities list -- and now we have big city problems.

According to Tulia, Austin does not make the top ten for cities where middle-class can not afford to buy a home.  With a median income of $60,000 about 50% of Austin's residents can afford to buy a home with a maximum affordable house price at $250,000. That puts us as slightly less affordable than Houston, Dallas or San Antonio, all Texas cities that have also seen major growth. On the flip side the top ten cities for affordability are also not experiencing the same type of growth and have higher unemployment rates.

Besides affordability of housing the most painfully unavoidable drawback has been traffic congestion. To help alleviate many of these problems will take public investment, and of course that means more pressure on long time residents who haven't quite shared in Austin meteoric success. Most of the large cities where large numbers of domestic migrants are coming from are accustomed to a subway or some street rail that is a major part of the public transit system. That is not the case in Austin and building one will take years even if voters approve a rail bond in November.

Voters in the Cap Metro service area voted down a bond in 2000, by less than 1%. The core of the city of Austin passed the measure easily while further reaching areas at the edge of Travis County and in Williamson County voted it down. That's not an unlikely scenario again if the campaign for rail can not make the case to those who are further out. It will also likely be a litmus test in the new 10-1 City Council district races where those areas will for the first time have geographical representation. Austin Mayor Lee Leffingwell is termed out and is pushing rail as what seems like his legacy piece.  The Mayor is solidly on board, and in February coined the term, "Rail or Fail" saying that "The future of Austin is an Austin connected to rail."  

The increasing urbanization of Texas also has another big city mayor wondering how that might affect politics. San Antonio Mayor Julian Castro suggested to Bloomberg's Businessweek that coastal transplants from more liberal areas will have a purpling effect on our overall electorate. He also thinks businesses will start taking a look at how the political rhetoric has shifted while investments in infrastructure remain a primary driver and foundation of business growth.

There is no easy answer to the growth-affordability question. Residents will have a lot to talk to candidates about how to keep our city affordable while addressing the need for investments in infrastructure like transportation. We will need smart growth plans with a long term vision.

You can follow me on Twitter at @joethepleb.

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Maybe this will improve (0.00 / 0)
The Texas "well being" index.  

the real reason (0.00 / 0)
Of course the number #1 reason for people moving to Austin, as it is everywhere else, is jobs.  There are many, many places in the US cheaper to live than Austin (including rust belt cities like Detroit, Cleveland, Pittsburgh and Buffalo), but they do not have jobs.  And while we tend to think it's a nice climate, that has not changed from a century or so in which the migration was toward Northern cities, not away, whatever people might have thought of the climate; and I seriously doubt we are getting many from Florida or ANY from California, who think they are moving to a better climate.  The liberal, artsy, laid-back ambience attract folks from both East and West Coast who might otherwise move to job-rich and less expensive Houston, Dallas, San Antonio or Oklahoma City, as well as some retirees who might otherwise look to Florida, North Carolina or Arizona.  So say it with me:  jobs, jobs, jobs!

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