This is how Austinites will live in 2040

Stephanie Long is a lot less stressed now than she was just over a year ago, and it’s largely because she’s spending much less time in her car.

The interior architect really only has to take her Tesla out of the garage to get one of her children to school and to commute 10 to 15 minutes to her job in East Austin.

The decision to move in December 2018 from the Circle C neighborhood in Southwest Austin to the master-planned Mueller community on the northeast side of the city was pretty easy, Long said. Before moving, her daily commute was 45 minutes to an hour each way.

The design of Mueller — with its narrow streets, diversity of nearby retail and parkland — has made Long less dependent on her car and encouraged her to spend more time outside.

Long said there’s been more than one weekend when she’s parked her car on Friday after work and not needed it again until Monday morning. Long and her two children can walk to H-E-B, Alamo Drafthouse, restaurants, the gym, a farmer’s market and a park.

The move has had some unexpected side effects.

“I truthfully feel more relaxed,” Long said. “When you are outside in fresh air, you feel much better naturally. I feel connected to the community.”

This live-work-play ideal, long espoused by commercial developers and New Urbanists to the point of near cliché, can actually be seen in the 700-acre Mueller community, which is expected to have at least 6,200 housing units when done. And it’s a model that will need to be replicated many times over as the Austin metro prepares to almost double its population by 2040. More than 3.6 million people are projected to live here in 20 years — up from about 2.2 million today. Rough calculations indicate the Austin metro would need about 500,000 more housing units to handle that influx of people.

As part of its yearlong series, Austin 2040: Our Business Future, the Austin Business Journal is taking a look at how the city and region will change in the next 20 years in industries such as real estate, technology, health care, transportation, entertainment and finance. 

Austin’s growth 

To better handle this influx of people, Central Austin will need to become denser with a variety of housing types and commercial space built even in established neighborhoods. Multimodal transportation, including an extensive bus and rail system throughout the city and its suburbs, will also be key to prevent complete gridlock on the capital city’s roads, many experts said.

And suburbs will need to build up rather than out.

Currently, 36% of all jobs in the 4,278-square-mile Austin metro are within a five-mile radius of downtown, according to U.S. Census data provided by RCLCO Real Estate Advisors. On the flipside, only 16% of Austin’s population lives within a five-mile radius of downtown.

That has to change, said Steven Spears, a principal at GroundWork, the developer of the huge forthcoming master-planned community Austin Green. One way to do that is to create more regional employment centers and link those to housing. Austin Green is one ambitious attempt to do this. The attempt is somewhat utopian, Spears admitted.

“At Austin Green, what we are aiming to do is … to have as close to a one-to-one job to housing balance as possible,” he said. “So, we think we can build about 12,000 homes, and we believe that we can create around 12,000 jobs.”

More urban density

The way Austinites live in 2040 will change out of necessity, as land prices and construction costs continue to climb. It will make residential units smaller.

Because units will be smaller, outdoor living spaces and parkland will become more vital. Urban dwellers will expect more hotel-like amenities in their homes.

If done right, Austin Green — proposed as a 2,122-acre master-planned community along the Colorado River in far East Austin — could be emblematic of the types of sustainable neighborhoods the city needs in the future. It is also located in an area expected to see massive population growth.

“East has the most promise because of its proximity to Central Austin and other primary job centers,” said Todd LaRue, managing director of RCLCO’s Austin office.

Until the past 10 or 15 years, high-density residential had been slow to develop on the east side because of the lack of major roads and other services, he said. With the extension of U.S. Highway 290, construction of State Highway 130 and the sheer demand for housing, construction is set to happen there in a major way in the decades to come.

Austin Green

In addition to 12,000 planned residential units — from detached single-family homes to high-density apartments — about 2.25 million square feet of commercial space — offices, warehouses and shops — are being discussed for Austin Green, which will rise along SH 130 from the Colorado River to FM 969.

Another 858 acres will be open space or parkland.

Making this happen, though, will take some time. Spears said Austin Green may not even be built out until 2040.

To make the community work for investors and multigenerational residents, Austin Green is seeking more density than the norm. The community will have about 10.5 residential units per acre, while keeping 40% of the total land dedicated to parks and open space.

That’s denser than Mueller, Spears said.

“When you go denser, the need for public parkland is more important because you have taken away the backyard,” he said. “People need to get out in nature. They need to get out and socialize and connect with people. You don’t have that luxury if you are in that type of density.”

More density can allow for lower price points as well, Spears said.

He said 15% of all for-rent units will be reserved for residents making up to 60% of Austin’s median family income, and about 5% of all for-sale housing will be reserved for families making up to 80% of median family income, which stands now at about $96,000, according to Travis County officials.

“We are trying to get the full spectrum of housing,” Spears said. “This is a place where you can grow up as a child and eventually retire as an adult, all in one community. And, the only way that is possible is to have a variety of housing options.”

Another major goal of Austin Green is to keep residents off major roads. It could become a regional employment hub, not just for East Austin but for nearby hamlets such as Manor and Bastrop, with more than 1 million square feet of office space possible, plus a hospital and town center with grocery store and restaurants.

“Our goal is to provide the majority of the essential services that people need in this area within Austin Green — medical services, grocery stores, emergency service[s] … like a fire station and restaurants — but more importantly the commercial use is not meant to be food and beverage or Starbucks or something like that,” Spears said. “We want that full spectrum because of where we are in the city.”

Austin Green will seek zoning from City Council during the next month or so. Construction could start in the next 12 months, Spears said.

Much of town to see changes

It’s not just East Austin that will get denser in 20 years. Downtown and existing Central Austin neighborhoods and even the suburbs will have to become denser and more urban, experts said.

For example, more people will be living in high-rises — even in microunits of around 420 square feet — on the eastern side of Austin’s downtown as the area around the Dell Seton Medical Center at UT and the former Brackenridge hospital continues to redevelop, said Todd Runkle, managing director of Gensler’s Austin office.

Infill development is going to be key to keeping Central Austin affordable, many experts said.

“The one constant besides taxes in Austin has been population growth,” said Chris Krager, principal and founder of development company KRDB LLC. “If we don’t [build denser infill housing] and we stick to the status quo, we are going to become San Francisco or San Jose. There will be zero affordable housing in East Austin if we don’t allow for increased density. It is just simple economics. And, the proof is all there.”

Krager’s company is currently building a 17-unit condo project on Martin Luther King Jr. Boulevard in East Austin using modular construction methods. The site formerly had four single-family houses on it.

West of downtown, KRDB is in the design phase of a six-townhouse project on one single-family lot in the Enfield neighborhood.

Providing retail and other commercial space in these infill developments is essential as more people abandon their cars. Good infill development can mesh with existing neighborhoods by keeping heights in line with nearby structures, using complementary building materials and providing open space.

“There are very few walkable neighborhoods in the city of Austin right now,” Krager said. “There are very few neighborhoods you can live in where you can walk to get whatever you need.”

Krager said he lives in the small Swede Hill neighborhood of East Austin near downtown, and while he can walk to a bar or restaurant, he has to get into his car to go to the grocery store or pharmacy.

“I used to live in … Wicker Park, Chicago. I could walk out my door and go 500 feet in any direction and get whatever I needed,” he said.

RCLCO’s LaRue said suburbs will become denser. Townhomes, duplexes and smaller homes, in general, will be constructed if developers can get the entitlements from cities.

“There is demand for it,” he said. 

2020’s impact on 2040

What happens in the coming weeks and months in Austin will have immense impacts on city housing in the decades to come. The overhaul of the land use code could allow for greater density in the city’s core, and an extensive plan to create high-capacity transit is expected on the ballot this November. 

The transit plan, which could include rail, is projected to cost between $3.2 billion and $10.2 billion.

“Our growth has significantly outpaced our ability to even think remotely about a long-term transportation strategy,” Spears said. “As a citizen I find it frustrating, more than a developer, that we are so far behind the times on a really robust and creative way of looking at transportation.”

Building more housing faster is going to be key to Austin’s affordability long-term.

Core Austin neighborhoods have to lose their “not in my backyard” attitude, often shortened to NIMBY-ism, and accept a variety of new housing and commercial space to keep more housing affordable for the working class, said Jason Ballard, founder and CEO of Austin-based Icon Technology Inc., which has developed a 3D printer for homes.

“I hope in 2040 Austin is a city that saw this coming and got ahead of it and took some brave risks,” he said.

Renowned Austin-based architect Michael Hsu said the city’s land use code has to change to allow denser housing so a variety of income levels can live in the same neighborhoods.

“We need to keep everyone who works central [living] closer to central if we can,” he said. “Hopefully, we will see the code continue to incentivize [developers] with bonuses to allow for affordable and workforce housing.”

Hsu said Council members need to step up and allow for more apartments, condos, duplexes and townhouses to be constructed in Central Austin. He said he hopes the code “doesn’t get watered down” through the approval process.

“It’s like giving someone a quarter dose of penicillin, when they are wildly infected with something,” Hsu said.

Construction disruption

For the most part, American homes have been constructed the same way for centuries. Homebuilders, developers and architects alike say the industry is in need of disruption.

Most agree that rapidly advancing technology will change the sector in the next 20 years. What construction method will come out the winner, and how technology will be incorporated into housing, though, is anyone’s guess.

One thing for sure is that housing will be smaller, smarter and more sustainable. Homes of the future will also require less parking.

Automation, digitization and robotics will change what housing looks like in 20 years, Ballard said. Humans will develop ways of building homes that have only been imagined before in the pages of science fiction novels or on the silver screen.

April Whitaker, Austin president of production homebuilder Taylor Morrison, said she hopes her industry experiences a shakeup in the next 20 years — even though alternative methods such as modular construction and 3D home printing are still too costly at the moment for companies like hers.

“I think the discussions are trendy right now, but I don’t think they have shown that they can create efficiencies or cost savings to actually yield the benefit just yet,” she said.

Ballard said these new technologies will become economically feasible sooner than production homebuilders may think.

“I’m old enough to remember when people were predicting that Amazon would go bankrupt,” he said. “People said, ‘There is no way people are going to buy all of these things without touching them and looking at them,’ and now Amazon is the most valuable company on Earth.”

In 20 years, Ballard even thinks people will be living on the moon and maybe even living on Mars. He said the new space race will also inform how people live on earth. The development of “space-age housing,” he said, will also impact conservation and waste reduction measures on earth.

Additionally, modular construction is expected to grow rapidly and shake up the market in the coming years.

Runkle said high-rise apartments and hotels are the perfect application for it. 

“You can literally build the concrete frame and slide the units right in,” he said.

Building units offsite will decrease waste, improve quality and reduce disruption of city streets, Runkle said.

All of the 264 guest rooms in the Gensler-designed CitizenM hotel in Seattle were prefabricated offsite in a European manufacturing facility.

Gensler even looked at using modular units in the construction of the 1,048-room Fairmont Austin hotel in downtown.

“We looked at having all of the bathrooms for the guest rooms built in China and shipped over,” Runkle said, “but there were too many unknowns at the time. … We brought two companies into Austin to talk to them and interview them. It was a little too early yet for [the developer] to take the risk.”

Using modular units can cut construction time up to 50%, Krager said. It’s also easier to deliver prefabricated components to a small construction site than building everything from scratch there, he said.

In the case of his MLK condo project, Krager said 30 modular sections were built offsite with the kitchen and bathroom cabinets, countertops and plumbing fixtures already installed.

Technology will be fully integrating into homes by 2040, experts said.

“Our homes will become more than homes,” Ballard said. “They will be integrated more fully into the information age, and our homes will assist us and support our lives probably in ways we can barely imagine. I think by 2040 that will have happened.”

Some luxury apartments now have high-tech amenities such as Amazon’s Alexa smart speakers integrated into the wall, smart locks that unlock when the tenant is nearby and smart thermostats.

“In 20 years, you are going to have smart apartment integration,” said Michael Piano, development manager for apartment developer Presidium Group. “That technology is going to be built out and affordable and accessible to people. I honestly think it’s going to be above and beyond that in 20 years just at the pace that things move.”

It’s too early to say how homes will be constructed at Austin Green since builders haven’t been named yet. Spears said the apartments and homes will be built more sustainably and more energy efficient.

Housing at Mueller already has some eco-friendly features. Long’s garden home is equipped with solar panels that gives her about a $40 discount a month on her electric bill. An EV charger in her garage keeps her Tesla juiced up for about $10 a month.

Not that she needs it all that much.

  • Austin Business Journal

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