AUSTIN (KXAN) — The Downtown Austin Alliance (DAA) has revealed findings from its 2022 State of Downtown economic impact report. According to the report, downtown housing and office markets have surpassed pre-pandemic levels with 22 current or planned major commercial construction projects.
“Given the recent influx of residents and businesses into our region, the State of Downtown report is essential to understanding the direction our downtown is headed. It also informs strategies for preserving our unique character and maintaining a welcoming, dynamic downtown for years to come,” Dewitt Peart, president and CEO of the Downtown Austin Alliance, said.
This is the first report that shows data on the economic indicators that impact downtown Austin since 2019.
According to the report, leasing activity returned to pre-pandemic levels with downtown Austin leading the nation in sublease space absorbed. Currently, 11 office projects are under construction and 11 more have been proposed or are in planning.
The report includes results from a city-wide community survey. Some of the issues that are most important to Austinites to be addressed over the next two years are homelessness, traffic congestion, public safety, affordability and parking.
Other findings from the report include:
- Vacancy has stabilized as leasing activity has recovered to pre-pandemic levels.
- 2,161,727 square feet are currently under construction.
- Total downtown employment recovered to its pre-pandemic levels quickly in 2021.
- Downtown businesses are capitalizing on the rebound in consumer demand as 60 new businesses have opened since the pandemic began.
- 11 office projects are currently under construction and 11 more have been proposed or are in planning.
- Downtown is poised to add 1,015 hotel rooms in the coming years, or 7.5% of current inventory.
According to Capitol Market Research, downtown rent has jumped 28% in the last year and a half.
According to their data, the average rent in downtown is $3,106 per month for an apartment unit.
Jen Weaver runs Weaver Buildings, a real estate development firm focused on workforce housing.
“That means if you want to live in a studio in downtown Austin, you need to be making six figures to qualify,” she said.
Weaver says the rise in rent is at least partially because of the jump in appraisal values.
“The only option a landlord has is to raise the rent,” she said. “People are taking that hit if they want to stay downtown.”
Jenny Law is a local realtor, who’s worked with a lot of clients relocating from the West Coast for their tech jobs
“They come here used to the prices in those big metropolitan cities,” she said. “For them, the cost of living is still very low.”
According Urbanspace Realtors CEO, Kevin Burns the solution is simply allowing developers to build more in order to create additional affordability.
“The City of Austin needs to do a better job of making an easier process for developers to be able to create the necessary density and the necessary supply of housing,” he concluded.
You can take a look at the 2022 State of Downtown report here.