Booming Austin Sees Costs of Living Skyrocket

The Associated Press

AUSTIN, TX — Austin is on a winning streak, amid twin booms in economic and population growth. But a published report Sunday says the city’s success has also made its cost of living more expensive – so much so that some longtime residents and recent transplants alike are being forced out.

The population grew from an estimated 674,000 in 2003 to 830,000 last year. Some suburbs, like Round Rock, grew even faster, making Austin among America’s fastest-growing large metro areas. In August, Forbes magazine ranked the Austin area second among cities nationwide for job growth.
The increasing population has bolstered local attractions, including the South by Southwest festival. But that, in turn, has attracted still more people, driving living costs higher and prompting some residents to leave, according to The Austin American Statesman.

That includes Gin Daniel, who moved to Austin in the mid-1990s but moved last year to a small town in East Texas after the owner of her apartment complex just west of downtown sold it and the rent tripled.

“I stayed as long as I could,” Daniel said. “I love Austin, but I just couldn’t afford it anymore.”

Some say the rising prices undercut many of the notions ingrained in the city’s ethos. Nonetheless, a study last year by Jed Kolko, chief economist for Trulia, a national online real estate site, found Austin is among the most expensive places for someone earning a median wage in a particular city.

Kolko concluded that only half the homes for sale in Austin are within reach of a household earning a typical salary, a smaller percentage than in all but 13 of the top 100 metro areas.

Incomes have also risen in the area, but when income gains are measured against housing costs, the trend is headed in the wrong direction. Median family income in the Austin area increased 13.5 percent from 2003 to 2012, while median home prices increased 31.3 percent and average rents increased 43 percent, according to the Texas A&M Real Estate Center.

Rising costs have undermined other municipal initiatives – including a 1990s effort to improve long-blighted East Austin by providing federal subsidies for a new, affordable subdivision in the Govalle neighborhood. The goal was to attract buyers who would get a discounted home in exchange for staying for years in a rough part of town.

Courtney Enriquez was among the buyers. But as the Eastside has developed a hip bar scene, things got too expensive. Enriquez and her husband moved to Smithville, 40 miles east of Austin, in November.

This school year, meanwhile, the Austin district shrank by an estimated 1,200 students, marking the district’s first net loss in more than a decade.

As the city’s inner core gets more expensive, the poor are being pushed to the suburbs.

The number of people living in poverty in the Central Texas suburbs rose 143 percent between 2000 and 2011, outpacing overall suburban population growth, according to a 2012 book by authors with the Brookings Institution in Washington.