June 29, 2015
In case you haven’t figured it out, Austin is a very big city on the millennials’ map of America. More than 1 in 4 Central Texans is in the 20-to-34 year-old age group — the largest millennial share of a metro area’s population in the country.
A recent Bloomberg report on millennials’ migration to “second-tier” metro areas, including Austin, notes how the children of the 1980s and 1990s have spurred a boom in rental housing and multifamily construction. Says Bloomberg’s Aleksandrs Rozens, “Millennials, many saddled with college debt, are following job opportunities to smaller metropolitan areas… where the cost of living is less.”
Before you feel too bad about Austin being “second-tier,” Dallas/Fort Worth and Houston are too, according to Bloomberg. And before you push back about “the cost of living being less” remember that median rent in Austin is less than one-third than in San Francisco. And before you question the “boom in multifamily construction,” Bloomberg notes that 14,200 units are expected to come online in the next two years.
But as RECA pointed out in its recent white paper, while that 7 percent increase in multifamily units is welcome, we need to produce housing at a faster rate than that, year after year — a minimum of 100,000 new units by 2025 — to tackle our affordability crisis. Moreover, our ballooning cost of housing not only reflects a supply shortage but includes the premiums being paid for location, walkability and neighborhood character in Austin’s healthy urban core. Which brings us back to the millennials.
Anyone looking at Austin traffic can understand the desire to live closer in even if it costs more — a driver of the vicious cycle of economic segregation that plagues our region. But according to most real-estate researchers, millennials have a generational preference for walkable urban places that’s shaping the market in cities, like Austin, where they’ve landed. Some data points:
And there’s something our City Council could do to improve housing options for millennials right now. They have the opportunity to loosen the strict regulations that prohibit and discourage residents from building Accessory Dwelling Units, or granny flats. Not only would more ADU’s provide millennials with more of the types of housing they prefer, but they would also help ease affordability by providing more options for all residents.
For decades, Austin’s boom-and-bust economy, byzantine codes and regulatory process, and neighborhood-driven local politics have made it easier to build almost any kind of housing except that which millennials want. We won’t truly solve our affordability crisis until we’ve made the changes necessary to produce the housing that every Austinite wants and needs.