Developer Doug Launius said he knew 10 years ago that Southeast Austin was a place to invest: it's close to downtown and the airport; the land is relatively affordable; it is served by three major roadways—SH 71, SH 130 and FM 973; and the rolling hills are beautiful.
"It really is much closer [to Central Austin] than most people think," said Launius, principal of the Southeast Austin-focused development firm Marketplace Real Estate.
Marketplace owns some 900 acres in the area, including the site of a forthcoming 7-million-square-foot mixed-use development called Velocity, which is about a mile away from the site of Tesla's recently announced $1.1 billion Gigafactory.
Launius welcomes its arrival, which a local industry expert said will speed development—and the growth of property value—in the area.
"Tesla opening their factory … is going to accelerate the growth in the area and help us bring the services, the grocery stores, and all the things that we want to do to the area more quickly," he said.
(The above map shows the approximate sites of the Austin Green (north) and Velocity (south) developments. The blue marker is near the entrance to the Tesla site.)
The area southeast of Austin began developing over the last five to seven years for a number of reasons, including rising property costs within the city limits and the construction of SH 130, which improved mobility in the area, said Eldon Rude, principal of the local consulting firm 360 Real Estate Analytics.
"A lot of it has to do with its proximity to Austin, relative to some other suburban areas, and the ability to buy land, develop and build homes that are affordable, if you will, for first-time and first move-up homebuyers," he said.
This growth includes Velocity, which plans to build 2,683 units of multifamily housing, 2.9 million square feet of office space and 42 acres of parks; H-E-B, which bought 16 acres in the development in 2016; and Austin Community College, which owns 124 acres adjacent to the development and plans to build a regional workforce center.
There is also the Austin Green development, from the local development firm GroundWork, which began the process of securing City Council approval for the 2,100-acre project earlier this year. As proposed, it would include 12,000 residential units as well as retail, office, industrial, medical and park space—and now, with Elon Musk's announcement last week, the Tesla factory.
The Tesla effect
Rude expects the factory to further development in the area, as a new workforce—first the construction workers who build the factory and then the employees who work there—drives up demand for housing and other services. Tesla's suppliers may also move to the region, compounding the effect.
This will likely affect the area's affordability, Rude said, and prompt more investment, such as an expansion of DVISD and the arrival of big-box stores.
For Launius, Tesla's arrival is proof of the area's appeal. "We say it's like throwing gas on the fire. The fire was already burning out there pretty strong, and then Tesla comes [and] announces," he said. "I think it's only going to be beneficial for Southeast Austin and Del Valle."
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Last year, we examined how Austin has an unlikely lookalike in Boise, Idaho, a fast-growing metro that, like Austin, has earned both praise and ire as thousands flock to the city.
But while Boise and its suburb, Nampa, were named the two best-run cities in America by WalletHub, Austin ranked 85th—below fellow hubs Phoenix and Miami and six fellow Texas cities.
The study, which measures 150 US cities across 38 metrics, compared each metro's quality of city services to its city budget per capita. While Boise ranked third in both categories, Austin's 12th-best quality of services was offset by a city budget that ranked 112th per resident.
Here's a look at how the Sun Belt's former pride and joy fell so far below its tinier "twin":
Booming economies—both cities
Both Boise and Austin ranked in the top 5 for their economies, with Austin taking the cake.
Bolstered by a mass pandemic migration and tech influx, both metros are caught "mid-metamorphosis" as they quickly transform into major cities. While Austin suburbs Georgetown and Leander both saw the fastest growth of any metros from July 2020-2021 with double-digit growth, three Boise suburbs—Meridian (5.2%), Caldwell (5.2%) and Nampa (5.0%) rounded out the top 10.
Tech giants like Tesla and Oracle, alongside other developments in tech and business, helped Austin produce one of the fastest-growing economies in 2021. And with employers like Albertson's, Hewlett-Packard and Micron Technology, Boise's unemployment rate sat at 2.4% in April—well below the national average of 3.6%.
City budget, safety—Boise
Austin's city budget for 2022 was around $1.2 billion. (Hensel Phelps)
Boise's City Hall offers 42% of its budget to general funds. (Boise City Council/Facebook)
With a $661.8 million budget and a projected population of just over 235,000, Boise has the third-best city budget per capita.
As the city experiences rapid change, city leaders said their budget priority was community-oriented, including "housing, transportation, environment, and more," and that 42% of the budget went to general funds.
And while Austin had a $4.5 billion budget this year, the city had to stretch that among its nearly 1 million residents. 1.2 billion—or 26%—of the budget was placed in general allocation, with two-thirds of that slotted toward public safety.
Austin remains one of Texas' safest cities, according to Police Chief Joseph Chacon, but pales in comparison to Boise. While Austin ranked 71st in safety, Boise clocked in at eighth. Boise's crime rate per 1,000 citizens was 35.5 in 2020, a 2.4% decrease from the year prior, while Austin's was 40.98 in the same time period.
Austin has become known as a "brain drain" in part thanks to the University of Texas. (University of Texas at Austin/Facebook)
Boise's biggest university is Boise State University. (Boise State University/Facebook)
Aside from its top economy ranking, Austin also shone in its high school graduation rate, which clocked in at 1st in the US. Known as a "brain drain" city, Austin's college-town status and wealth of job opportunities have created one of the most educated populations in the U.S.
Three of the top 25 public high schools in Texas are located in Austin, and the city's education system ranked 16th. And while four of the top 10 high schools in Idaho are located in Boise, the city's overall education earned just 41st place.
Both cities are known as fitness and health havens thanks to robust outdoor amenities and health-conscious residents. But Austin still edged out its Idahoan lookalike, ranking 7th overall to Boise's 10th.
Affordability and infrastructure issues—both cities
Housing has become a scarce commodity in Austin.
Both Boise and Austin are experiencing affordability issues thanks to an overpriced housing market. (Boise New Construction/Facebook)
Still, the effects of high-speed growth have done some major damage to both formerly sleepy cities.
Both cities pose higher than average incomes relative to their state. But thanks to a rapidly diminishing number of available homes for both new and old residents, both Boise and Austin ranked as the top two most overvalued housing markets in the country, according to a Florida Atlantic study.
With more and more residents priced out of homeownership and burdened with a higher cost of living, both Boise and Austin ranked below the top 30 in the financial stability index.
Both cities have seen even more development in neighboring suburbs—like Boise's Nampa, which was named the US's best-run city for the sixth year in a row—while its inner-city infrastructure often struggles to keep up with the times. While Boise's infrastructure and pollution ranked 32nd overall (Nampa ranked 77th), Austin's car-centric infrastructure ranked 45th.
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