Downtown Austin is back, baby!
With its mass migration of residents and corporations, Downtown Austin made its mark as the “economic anchor for the Central Texas region” in 2021, according to the most recent report by the Downtown Austin Alliance. For reference, Downtown Austin is typically defined as the 1,100-acre area between Lady Bird Lake and Martin Luther King Jr. Boulevard.
Though it makes up only 0.5 percent of Austin’s land area, downtown accounts for 32 percent of the city’s hotel rooms and 34 percent of all mixed drink sales. Tourism and nightlife were some of the industries hit hardest by the pandemic, but Austin is reportedly welcoming 5.1 million unique visitors a year.
The downtown population has grown 79 percent since 2010. Compared with its 13,648 residents, however Downtown Austin is host to 106,500 employees.
“Downtown employers draw talent from the entire Central Texas region, where half of 106k+ employees live outside the city limits,” the report notes.
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With lots of big-name tech companies flocking to Austin, the downtown area currently has more than 2 million square feet of commercial space under construction. As a whole, Austin came in seventh in CBRE’s Tech Talent rankings with 79,230 total employees in the sector.
The rise of Austin as an “18-hour city” can be attributed to its record-breaking in-office employment. Downtown Austin’s daily office use is up to 62 percent of its pre-pandemic rate and the area absorbed more sublease space in 2021 than any other submarket, including the World Trade Center.
In the midst of all this growth, community leaders are still concerned over unsustainable rent increases. In 2021, demand for downtown living boomed, driving asking rents up 14 percent, according to the report. In April, Austin boasted the highest year-over-year increase in monthly rents in the nation.
Lagging wages and skyrocketing home prices have even sparked concerns that the city could be experiencing a housing bubble. “Austin is arguably in the largest housing bubble in America based on the fundamental data,” said Reventure Consulting CEO Nicholas Gerli.