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March 22, 2019

Volume 40, Number 49

Its almost here.  One more edition of this weekly newsletter is all that remainsAfter exactly 40 years — we are ceasing publication.  It is triggering a bit of personal nostalgia.  But, put that aside.  Lets dive into this weeks look at the Austin area.

Speaking of looking,” if you want to know about a major overhaul of downtown Austin, you can get an elaborate look at the future plansIt will be more than just a dog and pony show, it will be dogs and ponies with bells and whistles.  The Downtown Austin Alliance (DAA) and the City of Austin call it The Downtown You Will Always Love.”  They call the presentation a celebration.”  And it will take place at the Austin Public Library downtown.

Plans are still evolving for the event April 30 (weeks after this newsletter ceases publication).  But, based on preliminary announcements of what is currently in place, they are going allout to convince you the redo of downtown will be spectacular (my word, not their’s).  Some examples:

Be the first to hear findings from our new State of Downtown report while enjoying some of the citys best food, drinks, and live entertainment,” said DAA in a promotional piece.  Okay, this is all well and good.  But, what about the bells and whistles?

“Take a step into the future with our unique VR experience,” DAA said.  “As the goggles go on, guests will be transported into a virtual world representing the future of Austin mobility.”

Or to put it another way:  “Guests will learn about the community’s vision for the future of downtown – and how we are going to get there – through compelling speakers and hands-on activations featuring local artists and the latest technology.”

Okay, let’s read between the lines.  When DAA says “the future of downtown will certainly feature welcoming, engaging places for all to enjoy” the translation is likely to include less auto access, less parking, wider sidewalks and more emphasis on bicycles and scooters.  Also, you need to raise some questions:  what will be the total cost, the impact on businesses and, importantly, will such a costly project with drastic changes be submitted for voter approval?  Participants at the 4:30 pm to 7 pm will be charged at least $55 to be dazzled. Read more →

March 15, 2019

Volume 40, Number 48

Counting down:  only two more editions of this weekly newsletter remain following this one.  Weve spent the last 40 years looking at Austin and where it is headed.  No reason to stop now.  So, lets jump right into this weeks insights.

Want to know what Austin streets especially downtown will look like in the future?  Well, there is a group that says all you need to do is look at certain crowded world cities where the streets are cluttered with bicycles, MoPeds, scooters, and pedestrians.  Cars will be vastly outnumbered if they are allowed at all.  This was the view discussed by some at South by Southwest (SXSW) this week.

Admittedly this would be a drastic departure from this car-centric community.  But if you check recent city downtown policies – reduction of car lanes, expanded bike lanes, pedestrian enhancements, sidewalk widening, parking elimination, etc. – you might detect a trend.  It’s important to watch these policies to see if this is truly a trend that will expand.

Speaking of the ubiquitous scooter situation downtown, an interesting explanation for the number of scooter-related accidents emerged at SXSW, courtesy of Carlos Bloha, the co-founder of the Flash e-scooter company that is currently active in Europe.  According to the Austin Monitor, Bloha said the practice of US scooter companies charging per minute of use leads to reckless behavior.

“If you start thinking in terms of time, when your need is (covering) space, you engage in pretty warped behavioral patterns,” he said.  “If youre billed by time, what is the natural human instinct?  It is to hurry up because no one wants to pay more than they should.”

“Hurrying up on a device leads to some seriously irresponsible behavior and serious accidentsYou have adopted a pricing behavior that is a moral and physical hazard,” Bloha claimed.

To bolster his theory, he said scooter riders in Austin had racked up nearly 250 serious accidents in the previous 60 days.

Of course, scooter scooting hit its peak this week during the SXSW events downtown. Read more →

February 8, 2019

Volume 40, Number 43

No doubt the availability of affordable housing is important inside the Austin city limits.  Check the exploding growth in metro suburbs where less expensive residential units can be found.  Austinites recognized this and voted in last Novembers bond election to raise $250 million toward affordability initiatives.  But, did they realize this expenditure could possibly reduce parking?  This is part of a proposal the Austin City Council will consider 2.21.19.

Austin City Council member Greg Casar has put forth a plan that will be considered in less than three weeks, and it has gained support from other council members.  City staff has been directed to draft a resolution to accomplish his objectives.  Generally, his plan would relax building size and parking restrictions if affordable housing is included in specific projects.

Right now, his plan would apply to the entire city – not limited to areas such as downtown or the West Campus adjacent to UTAustin.  As an example, this could include the high-dollar West Austin neighborhoods where it is difficult if not impossible to find lower-priced living units.

Admittedly, Casar’s plan is aimed at developers who are already specializing in subsidized, low-income housing.  It would allow those developers to make at least 50% of all rental units available to renters who earn 60% or less of the median family income.  For homeowners, income restrictions would be set at 80% of the median family income.

In return, developers would have looser height restrictions.  They could go 25% higher than the current building codes allow.  Also, and this is important, parking minimums would be eliminated.  Casar maintains that waiving these current requirements would allow a significant number of affordable units to be build at little cost to the taxpayer.

Of course, this does not address the additional stress of more vehicles in areas with no parking provided for them.  Don’t forget:  once these regulations are in effect for areas where affordable housing is currently desirable, the plan is still slated to be citywide.  So the devil will be in the details as the language is lockedin prior to the 2.21.19 City Council meeting when it will be up for consideration.  Another factor to consider:  this is planned to stand apart when the City Manager presents an overall code rewrite in the weeks ahead.  Stay tuned. Read more →

February 1, 2019

Volume 40, Number 42

It was a big publicity deal seven years ago when the mayor of Georgetown led the effort to make the Central Texas citys energy supply 100% reliable on renewable sources such as wind and solar.  Now, heres the big deal:  Georgetown residents paid more than $1,000 per household in higher electricity charges over the last four years.

“That’s right — $1,219 per household in higher electricity costs for the 71,000 residents of Georgetown, all thanks to the decision of its Republican mayor, Dale Ross, to launch a bold plan to shift the city’s municipal utility to 100% renewable power in 2012,” notes Chuck DeVore, a VP with Austin’s conservative think tank, the Texas Public Policy Foundation.

“His decision to bet on renewables resulted in the city budget getting dinged by a total of $29.8 million in the four years from 2015 to 2018,” said DeVore.  “Georgetowns electric costs were $3.5 million over budget in 2015, ballooning to $6.3 million in 2016, the same year the mayor locked his municipal utility into 20- and 25-year wind and solar energy contracts to make good on his 100% renewable pledge.”

DeVore said city leaders had to lock in a large excess of wind and solar power to be able to lend credibility to their 100% renewable claim, since wind and solar power can’t be relied on to keep the lights on 24/7/365.  “And, even with that surplus, there are times when Georgetown draws traditional fossil fuel power from the Texas grid, making the citys 100% renewable claim nothing more than spurious sloganeering,” he added.

Georgetown is now trying to renegotiate its costly longterm wind and solar energy contracts.  And, effective today, February 1st, Georgetown customers will see an average $13/month increase in their electricity bills – not due, say city officials, to wind/solar contracts, but because they leaned on forecasts back in 2012 and 2013 that predicted a shortage of power and a significant rise in energy prices.

Long ago, city-owned utilities (such as Georgetown’s) were exempted from competition, like you have in other Texas cities, where residents have a choice of electricity providers.  Keep an eye on the Texas Legislature.  A proposal is under consideration by lawmakers that would allow such monopolies to be changed, giving customers the ability to shop around. Read more →

January 25, 2019

Volume 40, Number 41

The City of Austin has invested heavily in contracts for wind energy to produce electricity.  It indicated it may continue to do so in the future.  Austins commitments have helped Texas emerge as the nations leader in wind energy. This is taking place in a state where oil is king, with no signs of relinquishing its crown.  So, what is the future for wind as a power source?

Let’s get this out of the way up front:  wind power can exist alongside Texas abundance of oil and gas.  Its not an either/or situation.  In fact, visual evidence exists in West Texas where both giant spinning wind turbines and oil/gas wells dot the same wide-open landscape.  It’s a below-ground industry working beside an above-ground dynamic.

Back to the original question, what is the future for wind power?  Wind energy is an expanding business.  And it is not just for generating electricity.  For instance, there are nearly 13,000 wind turbines operating in Texas for electricity.  Yet, there are still another 80,000 wind turbines spinning in the state that are used for pumping water and other purposes.  (Think windmills pumping water in the days of the Old West.)

We focus on Austin’s energy needs, rightly so.  But considering the future of wind energy it’s important to note “wind power has become an invaluable tool in the rural economic development space,” reports Powering Texas.  It is providing opportunities for landowners and local school districts, as well as creating jobs,

The national wind energy association reports Texas is home to nearly fourdozen manufacturing facilities and numerous component suppliers.  This is a growing support group for the expanding wind energy industry.  Not only this, but eight of the worlds ten largest wind farms are in the US and five of those are in Texas.

The US Department of Energy’s Energy Information Administration this month released bullish 2019 projections.  Some of its strong forecast is based on these facts:  1) there is already installed wind capacity in Texas amounting to 23,421 megawatts, 2) Texas wind capacity under construction is 6,148 megawatts, and 3) the wind capacity in advanced development is 1,804 megawatts.  Do the math.  In the pipeline (so to speak) is a capacity that will increase wind power in Texas by more than onethird.  This is a hefty increase, signifying a solid future. Read more →

December 14, 2018

Volume 40, Number 37

As 2018 winds down, its time to look ahead to what can be expected in 2019 (especially since this is our final 2018 issue, as we take our traditional yearend 2week hiatus).  In no particular order, lets hit as many issues as we can cram into this weeks newsletter.  First, as you plan your 2019 travel, heres what you can expect at Austins airport.

Frequent flyers know record-breaking passenger traffic has crowded the corridors, security lines and parking at Austin-Bergstrom International Airport (ABIA) this year.  It is averaging a huge 15.1% increase over last year, with no additional airport capacity.  Hang on.  Help is on the way.  And sooner, rather than later.

Nine new gates are nearing completion.  They should be quite impressive.  They will open in phases in the next year.  The north facing gates are on track to open in the spring of 2019.  This is none too soon.  But final construction will continue on new restaurant space, concessions and for an area ABIA calls the patio.  All this and the south facing gates are set to open by fall of 2019.

Important, but not as sexy, the remodeling and modernization of 13 vestibules is entering into the final construction phase.  Vestibules are the automatic sliding glass entrances and exits.  They will be enlarged to allow more space to enter and exit the terminal with luggage, while controlling drafts and the loss of cooled air.

In 2019, look for a continued major increase in passenger traffic.  But, by the end of the year, the new construction should alleviate some of the hassle as you travel through ABIA. Read more →

November 30, 2018

Volume 40, Number 35

Dear [MM_Member_Data name=’firstName’],

As we move into December its time to look ahead to 2019.  This is especially true when you single out real estate an essential portion of the Austin economy.  It also affects personally so many residents of the fastgrowing 5county Austin metro area.  So, what can you expect to happen next year?

The Urban Land Institute and PWC’s Emerging Trends in Real Estate:  2019 gives high marks to the Austin area and to Texas’ major metros.  In fact, Austin ranked #6 in the study, but it took a back seat to #1 Dallas/Fort Worth.  San Antonio ranked #20, while Houston ranked #37 in the review of the nation’s major markets.  These strong Texas cities have a significantly higher percentage of a younger population than the rest of the US.  This means there should be strong labor force growth and productivity.

As a result, demand for housing in these Texas markets is expected to remain strong through 2019,” Dillon Cook, founding partner and COO with Range Realty Advisors (RRA), told GlobeSt.com.  “Also Millennial demand for housing in these Texas markets is expected to continue for many years as a growing share get married, attain higher income levels and have children.”

There’s more to this positive real estate outlook than just demographics.  “Housing demand continues to be fueled by relatively low interest rates, low unemployment and continued economic growth,” Cook pointed out.  And Austin is among the nation’s leaders in these categories.

Yeah, but, what goes up must come down, right?  This may be true, but it’s all relative.  Range Realty Advisors points out “the ups and downs of economic cycles can vary substantially globally, regionally and by state.”  Cook says it is entirely possible the next nationwide economic downturn will look and feel very different in Texas compared to other states.

In previous economic downturns, there have been several causal factors – rampant speculative development for oneIn Austin most speculative real estate development is leased/sold as soon as its finished.  There are other national and international factors that are not currently apparent.  Conclusion:  “Add to this strong economic and job growth, high level of consumer confidence and business investment, and many believe Texas will continue to be a magnet for real estate investors and developers for years to come,” notes RRA. Read more →

November 9, 2018

Volume 40, Number 32

Austins reputation as a home for heavyweight companies of the future is wellrecognized and welldeserved.  After all, when you start calling the roll of Austin majors Dell, Google, Apple, Facebook, Indeed, 3M, etc., its hard to know where to stop.  The list is long and impressive.  But what about smaller enterprises that could be the biggies of the future?  Where does Austin stand as the site for startups?  New information late this week:  startups accounted for a larger share of businesses in Austin than in nearly all major US metros in 2016.

Young companies account for a larger share of businesses in Austin than in nearly all other major US metros.  So, it’s important to note that for the first time, the Survey of Business Owners compiled as part of USCensus Bureau data, included data regarding the number of years a firm has been in business.

Here’s how the numbers break out.  Take the newbies, those firms with less than 2 years in businessAustin with 4,444 companies, or 11.6% of all employer firms, ranks #3 in the nation, behind #1 Las Vegas and #2, Orlando.

Those Austin companies that have been in business a little longer, but less than four years, break out this way:  10,807 Austin businesses, or 28.1% of employer firms, place Austin at #2 in the nation, behind #1 Las Vegas.

And the oldies?  Austin firms in business less than six years15,077 Austin businesses, or 39.3% of firms, place Austin at #2 in the nation, behind #1 Las Vegas.

How did other major Texas metros fare in this review of the 50 largest metros in the US, in business less than 6 years?  The DallasFt. Worth metro was 5th in the nation, Houston was ranked #10 and the San Antonio metro was 13th in the US.

In the past, Austin has been noted as a good place to start a company.  After all, Dell started in a UTAustin dorm room.  But, this is the first report putting precise numbers to the entrepreneurial environment in this area.  This late report came to us from the Austin Chambers VP/Research Beverly Kerr.  Her analysis goes much deeper by the way.  For instance, she breaks it down by womenowned firms, minority and veteran entrepreneurs.  And she reports on Austin’s #4 US 2016 ranking for firms receiving significant funding from outside investors. Read more →

October 19, 2018

Volume 40, Number 29

UTAustin is without doubt one of the Austin areas most important economic engines.  (Years ago we made a speech titled If you want to stop growth in Austinmove the university to Amarillo!”)  So,how is UTAustin doing?  Especially, how does it compare with other peer institutions?  In the world?  How about this UTAustin rose ten points to be ranked #39 worldwide by one of the most respected global rankers of universities.  Impressive.

The editors of Times Higher Education World University Rankings (THEWUR) singled out Yale University and UTAustin for making major advances this year.  It attributed UTAustin’s leap to “significant increases in its institutional income and research volume.”  The ranking relies on a combination of reputation surveys and quantitative metrics in five areas:  teaching, research, research citations, international outlook and industry income.

It’s difficult to get detailed information on the specifics underlying THEWUR’s ranking but, according to UTAustin, it “correlates with recent expansions in research funding, research reputation and academic reputation.”

UTAustin ExecVP/Provost Maurie McInnis said investments in faculty compensation and interdisciplinary research, combined with the addition of the new Dell Medical School, are enhancing UTAustins research impact.  (If memory serves us correctly, UTAustin’s rankings have suffered in the past because most peer institutions boasted medical schools.)

And UTAustin’s future appears even brighter.  McInnis said “by placing greater emphasis on doctoral programs and strategic hiring, the university aims to become even stronger in years to come.”

Other Texas universities placing in the ranking include Rice University (#86), TexasA&M (#159) and UTDallas(lumped into a range of #201-#250).  UTAustin has done well in several other global rankings:  Center for World University Rankings, #31 … USNews&World Report’s latest ranking of Best Global Universities (#32) and Nature Index’s ranking of #23 in the world for scientific research.

As its stature grows nationally and worldwide (and this growth is expected to continue surging), UTAustin enhances much of what makes Austin, Austin. Read more →

October 12, 2018

Volume 40, Number 28

Its a rare sight in Austin:  powerful activist environmental interests disagreeing among themselves.  Usually the environmental community leaders in Austin publicly march in lockstep fighting for or against the same issues.  Not now.  Distinct lines have been drawn over an issue that will be on Austin ballots November 6th.  Which side prevails may go a long way toward defining the shape of Austins growth.

The ballot item is Proposition J.  Huh?  What’s that?  Simply put, it would require any comprehensive change to Austins land use rules go to voters for approval.  Just getting on the ballot was controversial.  It took a grass-roots effort to bypass the Austin City Council to get Prop J on the ballot.  This grew out of the CodeNEXT development rules process that inflamed such strong opinions, it was ultimately abandoned.

So, how has this pitted Austin environmental leaders against each other?  We need to credit Mose Buchele, an award-winning reporter for KUT-FM, for bringing this to our attention through his writing in Austin MonitorIt boils down to differing environmental philosophies as they relate to growth and climate change.  How so?

If Proposition J passes, then the voters will have the right to check the Councils work if we resurrect CodeNEXT and we have a comprehensive rewrite of our Land Development Code,” longtime environmental activist Bill Bunch argues.  Arguing against passage of Prop J is the director of Austin-based Environment Texas, Luke Metzger.  Where do they differ?

Bunch opposes development being shoved into the Central city where you would “scrape our existing city neighborhoods and try to force it on top of existing communities.”  He doesnt like adding density in downtown Austin and wants growth moved away from the city core.

Metzger disagrees:  “Are we going to increase sprawl, increase traffic, or are we going to do it in a much more walkable, transitfriendly way and bring people into the city core?”

They both cite strong, passionate environmental reasons for their approach.  Itll be interesting to see which approach prevails in this environmentallycentric Austin community. Read more →