AUSTIN (KXAN) — The Downtown Austin Alliance’s first-ever State of Downtown report found that “with current zoning and pace of development,” what you see developed in Austin’s downtown right now is only just over half of its development capacity.
The group released the findings at the inaugural Future of Downtown event Tuesday. They analyzed current market conditions in the downtown area.
According to the report, downtown’s geographic area is only 0.5 percent of all of Austin, but its economic impact on the entire city is significant. Revenues from downtown accounted for 9 percent of all property tax revenues, 47 percent of all hotel tax and 10 percent of all sales tax in the city limits.
The report said the tax impact of a building like Frost Bank Tower is equal to the tax output of 200 single family homes or 50 Barton Creek Malls.
A snapshot of downtown’s growth showed:
- 26 projects under construction. They can be broken down into:
- 3,017 residential units
- 2,040 hotel rooms
- 12,632 sq. ft. of restaurant
- 148,832 sq. ft. of retail
- 32 projects planned:
- 3,370 residential units
- 930 hotel rooms
- 44,736 sq. ft. of restaurant
- 166,181 sq. ft. of retail
“Currently we have 70 million sq. ft. built and under construction, so very soon, we’ll have 70 million sq. ft.,” explained Dewitt Peart, President and CEO of the Downtown Austin Alliance. “There’s an additional 48 million sq. ft. under the current land development code that could be built.
Peart said if the current rules remain, he expects downtown to reach that capacity by 2039.
He said the positive impact would be the increasing tax revenues. “A lot of those revenues generated downtown do spill out to the rest of the city and pay for a number services that go well beyond downtown,” Peart said.
However, he said the challenges that must be addressed include homelessness and traffic. According to the report, about 80 percent of people who work in downtown drive alone to get there.
“That is unheard of in other major cities. We need to change that,” said Peart.
He went on to add that’s why Capital Metro’s Project Connect is crucial.
The report also analyzed the demand for office space downtown.
The vacancy rate was at 5 percent and the average rent was $48.55 per sq. ft.
Here’s the comparison to other major U.S. cities:
- San Francisco: more than $80 per sq. ft.
- Boston: about $60 per sq. ft.
- Washington D.C.: about $60 per sq. ft.
- Austin: $48.55 per sq. ft.
The Downtown Austin Alliance said it’ll release reports like this every year from now on, so as Austin grows, they can make sure the growth aligns with their vision.
“It is the brand for the region. When people think of Austin, they think of downtown, so that’s important in terms of how people feel civically about downtown,” said Peart.