The tech giant is opening ‘the largest semiconductor manufacturing complex in America’ in Taylor, near Austin, bringing thousands of jobs and billions in investment to the area.
Taylor is currently a small, quiet city with just 16,000 residents, but that is set to change.
Mayor Brandt Rydell told KVUE: ‘From 2020 to 2030, Taylor will be one of the most rapidly growing cities in Texas, if not the nation.’
The average house price is just $298,000, but with the plant expected to open later this year, house prices could rise as more luxury properties are built.
The main focus in this article is the expected rise in housing values with some discussion of jobs and economic development. What else might change?
Higher status. Not all suburbs have a major Samsung plant.
More traffic. This includes employees traveling to and from the plant as well as supplies and products moving in and out.
New civic service and local revenue issues to confront. How will the community spend new tax monies that come in? What services will the plant and its operations require?
A larger population. Do some long-time residents dislike the changes? Does new development alter the character of the community?
Will the arrival of Samsung lead to other businesses moving to town? Or support businesses (where will all those plant employees spend their money)?
In other words, come back to Taylor in ten years and it might look and feel different.
Home prices and apartment rents in Austin, Texas, have fallen more than anywhere else in the country, after a period of overbuilding and a slowdown in job and population growth.
That marks a sharp reversal from previous years when Austin’s real-estate market was sizzling. The city attracted waves of remote workers on six-figure tech salaries. Others arrived after companies such as Tesla and Oracle moved offices there, taking advantage of lower taxes and less business regulation. Austin’s economy grew at nearly double the national rate, and it became the country’s 10th-largest city.
Now, it is contending with a glut of luxury apartment buildings. Landlords are offering weeks of free rent and other concessions to fill empty units. More single-family homes are selling at a loss. Empty office space is also piling up downtown, and hundreds of Google employees who were meant to occupy an entire 35-story office tower built almost two years ago still have no move-in date.
On one hand, falling prices are good news for residents. Housing is more affordable. People have more options. Getting in to better housing can mean better day-to-day experiences plus the opportunity to develop wealth.
On the other hand, falling prices mean less demand for development. This could mean slower population growth. Status is tied to population and interest actors have in snatching up properties. Tax revenues will be lower than they could be if property values do not shoot up.
Many American communities experience this tension. Property owners want values to go up. They do not necessarily want to pay higher taxes with these rising values but they will be happy when they sell the properties. More people want housing at reasonable prices. But, relatively few people want to live in places known for low housing values or people may not want to live in places where property values do not go up.
Homeowners now have increased flexibility to build more houses on less land, after the lot size required for a home was reduced from 5,750 square feet to 2,500 via the HOME initiative (Home Options for Middle-income Empowerment). The policy also increases the number of housing structures that can sit on that 2,500 square feet from two to three.
The debate over these changes continues:
The debate around a policy like this comes down to whether someone believes increased density (more housing for more people on smaller footprints) will help the situation, or will lead to overbuilding, crime, and rental cash grabs. The latter tends to sound a lot like NIMBY talking points more concerned with preserving the charm of longstanding Austin neighborhoods.
Some developers and homeowners feel that the resolution alleviates just a small part of Austin’s building woes, since the zoning codes are still complex and difficult to navigate. Jason Kahle, who owns Small Home Solutions, LLC, says he and his 10 employees are “going to be all over” the changes in a market where it seems everyone with a large-enough lot has considered building a granny pod, mother-in-law suite, or backyard office.
But being free to build on a smaller lot is not the same as being able to feasibly do it within existing rules, Kahle points out. “There’s a lot of wheels turning at the same time,” he says. “Austin Energy is a challenge. We have protected trees, impervious cover, floor-area ratio rules, the level of detail the city requires on civil engineer plans, the subchapter McMansion ordinance, temp drawings. It’s a lot to deal with.” The McMansion regulations, also known as “Subchapter F” in the city’s housing code, set detailed and strict limits, including height and setbacks from the edges of a lot.
Laura Boas, an Austin physical therapist, is building an “accessory dwelling unit” for her family behind her 1950s-era, 720-square-foot cottage in the Brentwood neighborhood. She’s seen massive 2,500-square-foot homes go up in her area, and her lot is big enough to support additional buildings. Boas lives alone and jokes, “I’m part of the problem.”
It sounds like the goal is to allow for more housing units without changing many existing lots and allowing for smaller lots. This is a different approach than promoting more multi-family housing or larger structures containing more residential units. These changes keep the single-family character and the scale of the neighborhood similar while adding more units and people.
It will be interesting to see if an approach like this solves the problems it was intended to solve. Will the number of new McMansions decrease as property owners pursue other options? Does this add enough units? Does it ease housing affordability? If not, what changes would residents and the city be willing to enact? I hope researchers and policy experts are keeping track of the changes in cities that have enabled similar regulations. This could help determine whether adding ADUs (such as in Portland) is helpful.
The future belongs to Texas. America’s three biggest cities by 2100 will be #1 Dallas, #2 Houston, and #3 Austin. Fast-growing San Antonio also ranks at #11.
The Sunbelt keeps rising. Phoenix is projected to be the 4th-biggest U.S. city by population in 2100. Other Sunbelt cities in the top 10 are #6 Atlanta, #9 Orlando, and #10 Miami.
NYC and L.A. are currently the top two biggest U.S. cities, but they’re projected to fall to #5 and #7, respectively, by the year 2100.
The methodology to arrive at this?
We wanted to know at moveBuddha what U.S. metropolitan areas would see the biggest population growth by 2100. We did this by using the compound annual population growth rate of the biggest U.S. metro areas (250,000 residents or more) between the 2010 and 2020 U.S. Census estimates and extrapolating it over 80 years.
This was an inexact science, and growth rates are bound to change. But it gave us a rough idea of which American cities may rise to the top by the dawning of the 22nd century. Climate change effects, migration patterns from climate change, and other unforeseen events could change things.
Two parts of this projection seem implausible to me. First, extrapolating the current rates of growth to last for more than seven decades. Growth rates will likely rise or fall across different metropolitan regions. It is hard to imagine many places will be able to keep up high rates of growth for that long. Second, the size of these regions. There is no US region currently near the predicted populations in 2100. Would this come from significant increases in density in the central areas or even more sprawling regions? It would be interesting to see where all those people would live and work.
A decade ago, Austin, the capital of Texas 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 of California. It has already surpassed hot markets in Boston, Miami and New York City…
Home sale prices in the city of 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 sales 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-square-foot apartment now $1,600.
Much of this article addresses the effects on the city and residents. The rapidly rising costs have consequences for many.
Thinking beyond this particular city, I wonder at the convergence of people, business, and real estate in the last decade in one city and region. Particular communities, including cities and suburbs, have experienced this before during boom times. Is Austin’s case unique or is it simply the latest American community to go through such growth? Austin has a unique mix of tech industry, cool culture, it is the capital of an important state and home to the flagship university in the state system, and once had cheaper housing.
At some point, the pace will slow down in Austin. This could happen because of the rising real estate values or other factors. What community and region is next? Based on what made Austin successful, I could venture some guesses. The first places that come to mind are on Richard Florida’s lists of creative class havens in The Rise of the Creative Class. Or, perhaps the tech industry gathers in a new yet unlikely location that offers similar advantages.
It is not a coincidence to see two recent articles about effects of growth in Texas communities as this part of the country – and the Sun Belt more broadly – is growing fast. One is the story of a big city where housing is in high demand while the second is a small town that is now a booming suburb.
Nearly 2,700 homes in the Texas capital have sold this year for $100,000 or more above their initial listing price, according to an analysis by Redfin Corp. that examined sales through Aug. 11. While a few other U.S. cities have had more properties sell at that premium to the asking price, none have experienced as big a percent rise in homes transacting at that lofty an increase, Redfin said…
The number of homes sold year-over-year for at least $100,000 over asking price has grown nearly 10-fold in Seattle, and fivefold in Oakland, according to Redfin. In Austin, that figure grew by 57 times the number for last year at this time.
The jump in these sales at six figures above the listed price shows how Austin, which has attracted young professionals for years, has become an even more competitive place to buy in recent months.
Today, the cattle are gone, replaced with clusters of sleek apartments, gated communities and big-box stores. And New Braunfels, the third-fastest-growing city in America, tucked in one of the fastest-growing regions, finds itself at a crossroads…
A once quaint town known for its German roots and the Schlitterbahn water park, New Braunfels grew a whopping 56 percent over the last decade, adding about 32,500 residents…
Newer residents to New Braunfels have been drawn to the region for its affordable cost of living and by larger employers who have settled there, including several distribution centers and technology companies. Over the past decade, the median salary has jumped to $90,000 from $65,000 in Comal County, which includes much of New Braunfels, one of the highest averages in the state…
The community has also grown more noticeably diverse, with the presence of Latinos particularly evident on the city’s West Side. Residents flock to eateries like El Norteño for typical Mexican dishes, such as menudo, a spicy stew known colloquially as a hangover remedy. This week, a server took orders wearing a red T-shirt that read “Menudo Para La Cruda” or “Menudo For the Hangover.”
The emphasis on growth is a long-term pattern. When Census data is released, many like to highlight the fastest growing areas of the country. This can shine a spotlight on places that are changing but it also reinforces a consistent American narrative: growth is good for communities. Indeed, discussion of the opposite trend – losing population (or somehow not losing residents) – reinforces the notion that growth is good.
At the same time, focusing on population numbers is worth considering alongside what is happening to the character of communities with population growth or loss. These two articles highlight both phenomena. In Austin, what happens to a local housing market when so much competition drives up prices? At the least, this means some are priced out of the adjusted values, existing community members may see their property values rise, and builders, developers, and local officials respond to the changes. And the rising prices are often interpreted as a sign that Austin is a desirable place to live.
In New Braunfels, this is both a common American story – small town outside big city turns into a sprawling community in a relatively short time – and a story with particular traits as the community has a particular character. The German roots of the community now sit among a more diverse population. A quaint town is now much bigger and there is a lot of building activity. The businesses there for a long time are now joined by new ventures.
Even as population growth is usually viewed as a good thing, it comes with costs and changes. Few communities would reject growth just to avoid change but there can tension over how to respond to growth. Many cities and suburbs have struggled to match their existing character to changes and what the community will end up being once a construction boom and/or sprawling subdivision growth subsides.
Given a Planning Commission vote and a range of opposition willing to stay late to fight, it seems unlikely that McMansion rules on carports and garages will be changing any time soon.
At their most recent meeting, Planning Commissioners considered an amendment that would change part of Subchaper F, aka the McMansion Ordinance, that eliminates exemptions for carports when they are enclosed. (Enclosing carports, of course, turns them into garages.) Instead, staff is recommending that the exemption be based entirely on where the structure is located in relation to the house, not whether it is a carport or a garage.
Senior Planner Greg Dutton explained that, under the current code, carports get a 450-square-foot exemption when 10 feet or farther from the main house. If closer, the exemption is 250 square feet. However, if exempted carports are subsequently enclosed, that exemption is reduced, and can cause problems for unsuspecting homeowners.
The change was initiated after a perceived flurry of requests for waivers from that rule hit City Hall. Those requests came from homeowners who put doors on what they thought were unfinished garages, only to be told their homes were now out of compliance because those structures were previously considered carports under city code. Dutton said the influx of waivers seems to have died down.
I could see two reasons for having a carport rather than a garage:
They are cheaper to construct because you don’t need to enclose the whole structure.
With warmer weather, carports become more viable because all you want is a roof over the vehicle. (Hence, there are not as many carports in colder weather climates.)
Yet, the first reason would feed into a common critique of McMansions: so much money is spent on trying to impress people from the street – usually with the size of the home or the overblown architectural elements – that there is little leftover for other features like the back of the house or a carport. In other words, if you spend a lot of money to build a McMansion, couldn’t you go a little further and construct a garage as well?
To be honest, I’ve never seen a picture of a McMansion with a carport. Indeed, one of the nicknames for McMansions is “snout houses” because they tend to lead with a large garage. Perhaps carports occur more in teardown situations where the size of the lot makes it more difficult to have a large garage on the front and an existing carport in the back or on an alley is a viable alternative.
I’m visiting Austin and heard about these McMansions. It’d be really cool to drive around and see some of these beasts. Which neighborhoods or streets are worth seeing?
The other thread participants then offer some good feedback for a city that recently instituted guidelines intended to reduce the number of new McMansions. But, if your city is known for its big houses, why not take advantage of this? Most cities would love to bring in more tourists who then spend money and demonstrate that the city is worth visiting. According to critics, McMansion owners want these homes in part because they want to impress others with the square footage and attention-grabbing architecture. Match this desire for visitors with the attention McMansion owners want (at least according to critics) and you could include such homes as important sights to see.
Of course, some cities might not want to highlight McMansions that are criticized for a variety of reasons. I’m guess Austin wants to be known for creativity and tech, not the poor architecture of overlarge homes. Similarly, I imagine many McMansion owners would not be thrilled if tour buses started regularly driving slowly past their homes giving tours.
At this point, I could only imagine regular McMansion tours being given by those who don’t like McMansions.
The directors of the city’s planning and permitting departments estimate it would take $400,000 to hire temporary workers and pay for overtime to eliminate the current backlog in the next 90 days…
Next year the department plans to ask for $1.6 million in additional money to fund 11 new positions. This memo comes as the city is just launching its annual budget process. Over the next few weeks, every department is going to be compiling a budget wish list, which eventually is sent to the City Council…
Some of the blame for the three-week delay in residential planning and permitting was placed on the “complexity” of the city’s McMansion ordinance, which limits housing sizes in certain neighborhoods. “As such the department will recommend changes to the (land development code) that will simplify the McMansion provisions and will extend turnaround times for those types of reviews to ensure that there is sufficient time to perform a thorough review,” the memo states.
The planning and permitting departments, which used to be one department called Planning and Development Review, are responsible for approving all real estate development in the city, from housing remodels to new subdivisions.
It can take some time to see how ordinances actually play out and perhaps the initial ordinance can be “smoothed out” for this sort of process. Communities can also run into this problem if they have high rates of growth. Austin is a desirable place for construction so it may make sense that it has a lot of permits to deal with.
I wonder how much these decisions to speed up the permitting process are driven by builders and developers who generally want to move as quickly as possible. If there is a bit of a delay in the process, would these builders actually cancel their projects or go elsewhere? Builders and developers are often powerful and are viewed as important harbingers of economic growth. Yet, isn’t Austin so desirable that a delay won’t harm things much? Granted, lots of people might want more efficient government but that also may just require more government employees.
The arrival of this year’s appraisal notices — which in Travis County showed homes’ average market values jumped 12.6 percent and average taxable values rose 8 percent for 2014 — is sparking a push for reform. Similar jumps have occurred in Williamson and Hays counties.
Real Values for Texas, a statewide group advocating for property tax reform, local officials and others say they believe enough momentum is building around the state to put pressure on the Legislature to fix what they say is a flawed property tax system. The issue is an especially hot one in Austin, where property values have risen at a much faster rate than wages in recent years, leaving more and more area homeowners saying they are struggling to pay their property tax bills.
At issue is what can be done. Market forces generally dictate home values. And with no state income tax, the state government and local taxing entities rely heavily on property tax for revenue to fund schools and many local services…
A key problem, critics say, is that the current system has shifted a disproportionate share of the burden of paying for schools and local services on homeowners, in favor of commercial and corporate interests who can afford to appeal their values and win big reductions year after year. The share of property taxes from homeowners to support public schools grew from 45 percent to 54 percent over a 12-year period, while commercial and industrial owners’ share has declined to less than 20 percent. (Other sectors, from oil and gas to personal property, make up the rest.)
One way to read this would be to see this in a long line of American homeowner complaints about property taxes. This has been a common theme in recent decades, famously illustrated by the Prop 13 campaign in California in the 1970s. Homeowners may enjoy owning a home but they tend to resent continually rising requests for money for local governments, even as they tend to want good, or even better, local services. Most homeowners want rising housing values as this increases the value of their investment yet don’t necessarily want to pay for it while living there.
Yet, the property tax reform suggestions here are interesting. Just how much should local homeowners pay compared to corporations? Is the best comparison to look at the rates each pays or the cumulative percentages each group contributes to the local pot of tax money? This could be related to a larger issue that goes beyond property taxes: what kind of tax breaks should corporations get from municipalities? This is a difficult issue to sort out as communities like jobs and important businesses yet homeowners tend to resent “handouts” for corporations that they think could afford to pay more.
Legally Sociable 