Real estate developers and investors continue targeting Austin and the Central Texas region for builds and buys. Despite headlines claiming Austin’s heyday has come and gone, the Capitol City continues scoring top spots in multiple ranking lists, including U.S. News & World Report, Resonance and LinkedIn. The Central Texas region is also continuing its positive economic growth trajectory.
However, the expansion generates challenges, including increased commute times and higher housing costs. The lack of affordable housing impacts professional workers such as teachers, healthcare workers and first responders.
The good news? Developing workforce housing in Austin provides middle-income earners with a safe and affordable place to live. It can also offer an added foundation to the region’s economic growth.
Workforce housing is a subset of multifamily housing that is:
Studies show workforce housing in a community helps increase job retention and productivity by eliminating long commutes from home to work. This housing type can also stabilize neighborhoods, as residents spend their money in the community, helping local businesses grow and thrive.
Speaking of growth, the discussion of workforce housing is vitally important these days because of Austin’s following development plans:
Convention Center expansion. Plans are in the works to expand the 365,000-square-foot downtown Convention Center to 620,000 square feet. Construction on the $1.6 billion development will begin in Q2 2025, with completion anticipated in early 2029.
School district expansion. Austin ISD passed a $2.44 billion bond in 2022, the largest in the district’s history. The money is being used to accommodate the region’s growing population and will support hiring new teachers, improving facilities, upgrading technologies and repairing rooftops and HVAC systems.
Adolfson & Peterson Construction (AP) is involved with upgrading two schools:
Several other Central Texas school districts also passed bonds since 2022, including:
Healthcare facilities growth
An expanding population means the need for more healthcare services. The Dell Seton Medical Center at the University of Texas is involved with a $280 million expansion of its hospital. Meanwhile, the University of Texas at Austin Medical Center is preparing to build two new towers: The University of Texas MD Anderson Cancer Center and a UT Austin hospital.
Transit and infrastructure improvements. Austin is also invested in helping move people around more efficiently through the following:
Mass-transit improvements. Plans are in place to launch construction on the $7 billion Austin Light Rail project, a 10-mile street-level railroad between 38th and Guadalupe Streets to Oltorf. Also in the planning stages are improvements to Central Texas’ CapMetro, the Red Line commuter rail that runs from downtown Austin to the city of Leander.
The projects listed above—along with ongoing corporate relocations and private developments—are generating population growth throughout Austin. However, not everyone coming to the region can afford the rents charged by city or inner suburban multifamily properties.
This challenge is prevalent among middle-income earners who need to move further from the city to find a reasonably priced apartment. While rents might be less expensive in Hays, Bastrop or Blanco counties, the commute on crowded highways and roadways can take an hour or longer.
Employees who drive longer to work can experience burnout and decreased job satisfaction. This, in turn, will impact retention as employees look for jobs closer to where they live. Some employees could even leave the region for areas offering lower housing costs and less stressful commute times.
Offering a workforce housing option closer to work can help eliminate the stress and irritation connected with long commute times. Healthcare workers, teachers, police and other middle-income earners would find it more palatable to participate in a 20-minute home-to-work commute rather than travel that takes an hour or longer.
To that end, some things are happening. Austin ISD is partnering with private companies to develop workforce housing for district employees. Meanwhile, Affordable Central Texas is using private investment dollars to purchase complexes that have been renovated for workforce housing use.
Even more can be done to address this need. AP is exploring ways to become more involved with developing workforce housing or renovating existing apartment complexes to provide attractive units to middle-income earners.
This effort is necessary because it’s not enough to support corporate relocations with new buildings or to develop schools and healthcare centers. People involved with such ventures need affordable places to live. When done correctly, workforce housing can provide the means and ability for middle-income workers to find reasonably priced rentals. This can help keep those workers on the job, boosting Austin’s reputation as a great place to live and work.
Eric Churchill has over 20 years of construction industry experience and works with leadership and project teams to engage new and existing clients to foster strong partnerships and identify new business opportunities that align with AP’s culture and growth strategy. He is responsible for all business development efforts, including setting and executing Central Texas revenue and profit goals. Eric believes that a client will only care about what you (or your company) know after they know how much you care about their project or organization.
Eric has developed relationships in the Central Texas area over the last 20 years which have helped significantly grow business in multiple markets including commercial office, multi-family, education, and industrial warehouse. He also has established relationships with city, county and state agencies.
Eric holds a Bachelor of Science in mechanical engineering from Texas A&M University, and serves on the Urban Land Institute (ULI) Management Committee, ULI Austin Advisory Board, ULI Sponsorship Chair and Programs Committee and the ULI Austin P3 Local Member Council. He is affiliated with the Real Estate Council of Austin (RECA) and serves on the RECA Programs Committee. He is also involved with the Society for Marketing Professional Services Austin Chapter, which honored him with its inaugural leadership award in 2015.
