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Austin's tech industry is booming — so is its affordability crisis.
Over the past few years, tech giants like Apple, Google, Oracle, and Tesla have taken advantage of the city's relatively low cost of living and business-friendly climate by opening new satellite offices or relocating their global headquarters to the area.
As the city becomes a bonafide tech hub, thousands of tech employees have infiltrated Austin's housing market, bringing with them hefty six-figure salaries. Capitalizing on the increased demand for housing and larger income brackets, home sellers have raised their asking prices while landlords steadily increase rents — pricing out many locals in the process.
Although price growth has begun to slow in Austin, the median home price sits at a staggering $562,212. For many native Austinites, especially those earning the area's median household income of $79,542 — far below the median tech-worker salary of $104,566 – housing affordability remains out of reach.
Residents and legislators have had enough.
To address Austin's affordability crisis, the city's council members as well as a community coalition, proposed a $350 million housing bond that was approved by voters on Tuesday. Austin's council members say they intend to use the funds for the "creation, rehabilitation, and retention" of affordable rental and ownership housing.
The tax-supported housing bond, named Proposition A — which will cost the typical homeowner an additional $45 a year in property taxes — is the city's largest housing bond to date.
Steve Adler, the mayor of Austin, who said in July that the city was "hemorrhaging" people, says that the bond will encourage the production of more affordable housing for everyday residents.
"What this bond does is it says we have funding to make sure that housing projects that would never get built by the market can get built," Adler said in a statement Wednesday. "And that key layer of funding makes it possible for us to keep thousands of working-class people in Austin."
Austin has passed numerous housing bonds over the last decade. The one prior to Prop A, which was approved by voters in 2018, allocated $250 million to the creation of affordable housing. According to Austin eligibility guidelines, families earning 80% or less of the area median income are considered low-income. For a family of four, the area median family income for Travis County is $110,300.
Austin American Statesman reports that most of the money from the loan was used to acquire land, build new multifamily developments as well as address safety risks associated with existing housing. However, in 2023 most of the fund has nearly dried up — at a time in which the city's cost of living has risen to astronomical levels.
It makes Prop A's implementation as important as ever.
With more tech companies likely to relocate to Austin in 2023 — a move that could keep home prices and rents inflated — and the city's home price gains outpacing wage growth, residents earning less than their new tech industry neighbors are likely to struggle in the competition for housing they can afford.
Adler said that voters passing the bond demonstrates just how seriously the city sees this issue. "This is the third housing bond that this city has passed in the last eight years, 10 years," Adler told KXAN News. "It's the second one that we've passed in the last four years. And I think that's real significant because it demonstrates the priority that our city has."
