Austin: A Theory of Everything How & why Austin is changing and what we should do about it

Transcription

1 Austin: A Theory of Everything How & why Austin is changing and what we should do about it 2014 Realty Round Up Palmer Events Center Austin, TX October 15, 2014

2 Austin rank among U.S. metros since 2000 Population change (nom) #10 Population growth (%) #2 Job change (nom) #7 Job growth (%) #1 GDP change (nom) #21 GDP growth (%) #3 Source: U.S. Census Bureau, Population Estimates. U.S. Bureau of Labor Statistics, Current Employment Statistics. U.S. Bureau of Economic Analysis. Jobs are from 2000 to GDP is from 2001 to 2013 (2000 not available). Growth rankings (%) are among large MSAs. Data is for Austin-Round Rock MSA. 2

3 Austin averaging 5.7% annual GDP growth: nearly 2 percentage points > U.S. economy 12% 10% 8% 6% 4% 2% 0% % Change in GDP (Nominal) Average ( ) Austin MSA 5.7% U.S. 3.9% -2% -4% Austin MSA U.S Source: U.S. Bureau of Economic Analysis. Data is for Austin-Round Rock MSA. Not adjusted for inflation. 3

4 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% Austin MSA U.S. This time it really was different: Austin was much better prepared for Great Recession Job Growth, 12-month rolling (SA) Jan 1991 July 2001 Dec 2003 AUS U.S. 1990s 63% 18% 2000s 13% -1% % 5% Aug 2014 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics. Data is for Austin-Round Rock MSA. Seasonally adjusted. 4

5 Population growth in Austin has picked up the slack in lean economic years % 7% 6% 5% 4% 3% 2% 1% 0% Population Growth, Austin MSA U.S. (MSA) Growth % % % Source: U.S. Census Bureau, Population Estimates. Data is for Austin-Round Rock MSA. U.S. MSA is all metropolitan areas. 5

6 Austin is winning war for talent Austin has added 225,000 people with bachelor s degree or higher since 2000 (~17,000 per year), only MSA in top 25 with population of less than 2 million. Bachelor s+ made up 36% of Austin s total population growth during (Raleigh 37%). Bach Degree+ Pop Growth Rank MSA Total Pop Growth Rank MSA Charlotte 102% 1 35% 5 Grand Rapids 93% 2 9% 33 Las Vegas 91% 3 45% 3 Austin 80% 4 49% 2 Raleigh 79% 5 51% 1 Riverside 74% 6 34% 8 Nashville 72% 7 27% 12 Orlando 66% 8 37% 4 San Antonio 66% 9 32% 9 Phoenix 63% 10 34% 6 Source: U.S. Census Bureau, American Community Survey table B15002 and Census 2000 SF3 table P37. Data is for Austin-Round Rock MSA. 6

7 Fast growing bachelor s+ population is driving significant wealth creation Average Earnings ($) Per Worker Age 25+ by Educational Attainment in Austin Bachelor s degree or higher 85,608 Some college or associate s degree 55,080 All Workers 54,360 High school diploma or equivalent No high school diploma 37,740 45,960 Raleigh Bachelor s+ 75,228 Some college 49,524 HS diploma 42,132 No HS diploma 36,132 All workers 49,824 Source: U.S. Census Bureau, Quarterly Workforce Indicators, Longitudinal-Employer Household Dynamics Program. Data in chart is for Austin-Round Rock MSA, 2013Q3. 7

8 Affordable means monthly housing costs < $1,400 for majority of Austin workers Age 25+ Population 2013 Growth Average Earnings Max Monthly Housing Cost Bachelor s or higher 506,645 80% $85,608 $2,140 Some college 340,908 57% $55,080 $1,377 HS diploma 234,821 54% $45,960 $1,149 No HS diploma 139,786 20% $37,740 $944 All workers 1,222,160 59% $54,360 $1,359 Source: U.S. Census Bureau, American Community Survey table B15002 and Census 2000 SF3 table P37 (Population, Growth, and Educational Attainment). Quarterly Workforce Indicators, Longitudinal-Employer Household Dynamics Program, 2013Q3 (Average Earnings). Maximum monthly housing cost is calculated at 30% of average earnings. 8

9 Note: Search conducted on October 14,

10 Earnings for < bachelor s degree workforce not keeping up w/ housing costs in Austin Housing Affordability ($) by Educational Attainment Bachelor s degree or higher Some college or associate s degree All workers 1,377 1,359 Austin Metro 1,614 Austin City 1,770 Austin Downtown 2,322 2,140 Max. monthly housing cost at average earnings Median rent High school diploma or equivalent 1,149 No high school diploma 944 Source: Zillow Rent Index (ZRI), All Homes (SFR, Condo/Co-op), August ZRI is the median of the estimated rent price for all homes in a given region. ZRI may not reflect actual listings at any given point in time. Maximum monthly housing cost is calculated as 30% of average earnings by educational attainment from U.S. Census Bureau, Quarterly Workforce Indicators, Longitudinal-Employer Household Dynamics Program, 2013Q3. Data is for Austin-Round Rock MSA. 10

11 Housing is expensive in Austin relative to other high-performing metro areas Max Monthly Housing Cost Bachelor s+ Metro Area Med Rent City Limits Med Rent Downtown Med Rent Austin 2,140 1,614 1,770 2,322 Raleigh 1,881 1,307 1,300 1,594 Orlando 1,880 1,305 1,176 1,474 Nashville 2,124 1,292 1,306 1,758 Charlotte 2,695 1,207 1,183 1,486 Denver 2,092 1,737 1,730 2,348 Portland 1,928 1,511 1,539 1,802 Source: Zillow Rent Index (ZRI), All Homes (SFR, Condo/Co-op), August ZRI is the median of the estimated rent price for all homes in a given region. ZRI may not reflect actual listings at any given point in time. Maximum monthly housing cost is calculated as 30% of average earnings by educational attainment from U.S. Census Bureau, Quarterly Workforce Indicators, Longitudinal-Employer Household Dynamics Program, most recent quarter available. Data is for Austin-Round Rock MSA. Downtown defined as following zip codes: Austin (78701), Raleigh (27607), Orlando (32801), Nashville (37201), Charlotte (28202), Denver (80202), Portland (97201). Several downtowns in table have multiple zip codes. The zip code that best reflected majority of downtown properties based on ZRI was selected. 11

12 Average monthly earnings for workers with a bachelor s degree or higher in Austin increased by $166 during Median monthly rent in city of Austin increased by $331. Source: Zillow Rent Index (ZRI), All Homes (SFR, Condo/Co-op), August 2011-August ZRI is the median of the estimated rent price for all homes in a given region. ZRI may not reflect actual listings at any given point in time. Average earnings are from U.S. Census Bureau, Quarterly Workforce Indicators, Longitudinal-Employer Household Dynamics Program, 2011Q3-2013Q3. Earnings data is for Austin-Round Rock MSA. ZRI rent estimate is for city of Austin. Not adjusted for inflation. 12

13 Education & wage inequality + rising housing costs contributes to residential segregation Workforce Demographics by Race/Ethnicity in Austin Race/Ethnicity Average Monthly Earnings Max Monthly Housing Cost 30% Earnings Percent with Bachelor's+ Austin MSA Percent with Bachelor's+ U.S. Asian 5,661 1,698 67% 50% White 4,644 1,393 49% 32% Black 3, % 18% Hispanic 3, % 13% Source: Educational attainment rates by race/ethnicity are from U.S. Census Bureau, 2012 American Community Survey, Five-Year Estimates, table C Average earnings are from U.S. Census Bureau, Quarterly Workforce Indicators, Longitudinal-Employer Household Dynamics Program, 2013Q3. Data is for Austin-Round Rock MSA. 13

14 Austin is the most expensive housing market in Texas. 14

15 Housing costs are higher in Austin but geographic perspective is important Housing Costs in Selected Texas Metro Areas, 2014 Average SF Sale Price Metro Area Med Rent City Limits Med Rent Urban Core Med Rent Austin 311,414 1,614 1,770 2,322 Dallas 295,350 1,407 1,226 2,982 Houston 275,369 1,463 1,330 2,299 San Antonio 220,366 1,276 1,180 1,830 Source: Average sale price from ABoR, MetroTex (Dallas County), SABOR, HAR, most recent month available. Median rent from Zillow Rent Index (ZRI), All Homes (SFR, Condo/Co-op), August ZRI is the median of the estimated rent price for all homes in a given region. ZRI may not reflect actual listings at any given point in time. Urban core was roughly defined as Austin (78701), Dallas (75201), Houston (77006), and San Antonio (78209). Rent estimate in San Antonio is median list price (ZRI N/A). 15

16 Austin is not creating enough middle-wage jobs. 16

17 Middle-wage jobs are smaller share but keeping pace with overall job growth Job Growth by Wage Range in Austin, Occupation Average Wage 2013 Jobs 2014 % Total 2014 Change Growth Low-wage per hr 292,732 32% 47,016 19% Middle-wage ,807 26% 31,562 16% High-wage per hr 384,992 42% 57,242 17% Total ** 910, % 135,820 18% Source: EMSI, Data Release. Excludes self-employment. Data is for Austin-Round Rock MSA and includes all jobs for which average wage data was available. Average wage is the mean wage (2013) for all jobs classified by occupation i.e. all jobs per occupation were assigned to one category based on the average wage. Calculations using median wage by occupation or other breaks could yield different results. Wage categories are from the National Employment Law Project. 17

18 We have more Ph.D. taxi drivers than anywhere else in America (underemployment). 18

19 The Human Capital is getting crowded Population Age Pop Growth Avg Annual Job Growth Avg Annual Job Growth Boom Year Bachelor s Degree 321,536 11,265 3,488 7,424 Some College 332,076 9,599 1,694 2,856 High School Diploma 227,965 6,278 5,418 13,366 Graduate or Prof Degree 155,522 5, No High School Diploma 139,522 1,893 5,346 12,731 Source: Population data from U.S. Census Bureau, American Community Survey table B15002 and Census 2000 SF3 table P37. Employment data, including 2014 projection, from EMSI. Some College category includes certificates, associate s degree, and people w/ higher education credits but no completed postsecondary degree. Data is for Austin-Round Rock MSA. 19

20 People moving here from California are to blame for. 20

21 Source: Internal Revenue Service. Map by Forbes showing net migration of tax filers (# of exemptions) to Travis County in 2008 tax year.

22 2008 Source: Internal Revenue Service. Map by Forbes showing net migration of tax filers (# of exemptions) to Wayne County in 2008 tax year.

23 2006 Source: Internal Revenue Service. Map by Forbes showing net migration of tax filers (# of exemptions) to Orleans Parish in 2006 tax year.

24 California is big but majority of people moving to Austin come from Texas 5,000 Households Moving to Austin from California 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Texas 288,868 California 39,886 Florida 9,163 25,274 moved Austin to CA Source: Internal Revenue Service. Includes only people filing federal tax returns. Number of returns used as proxy for number of households. Actual number of households may be different. Data is for Austin-Round Rock MSA. 24

25 110 people move to Austin every day. 25

26 It really doesn t matter. It s a lot. 26

27 But if you must know: Austin MSA: 2011 (latest available) 201 moved in 147 moved out +54 net Source: Internal Revenue Service. Includes only people filing federal tax returns. Number of exemptions reported on tax returns used as proxy for number of people. Actual number of people may be different. Data is for Austin-Round Rock MSA. 27

28 What should we do about all of this? Celebrate Stop comparing Austin to New York, San Francisco, and Washington DC Educate people about urban core vs. periphery markets 28

29 What should we do about all of this? Support and invest in career and technical education Pay equal attention to supply and demand sides of Austin s affordability challenge Advocate for publicly-funded Austin research program 29

30 7600 Burnet Road Suite 108 Austin, TX