Gary Dolch
Phone
512-656-5627
Email
[email protected]
We’re taking you Downtown, because the annual State of Downtown Report is here.
The yearly report has been produced by the Downtown Austin Alliance since 2019, providing insight into economic indicators, the tourism sector, development, public spaces, and environment of the 600 acres that make up the Downtown Public Improvement District.
A lot has changed in Austin since this time last year — let’s break it down.
Development
Austin and construction are nearly synonymous at this point, with 7.1 million sqft under construction at the end of 2023.
Here’s how that figure shakes out:
- 22% was for office space
- 38% was mixed-use
- 40% was residential
- Projects under construction right now will deliver ~3,000 residential units
Downtown has added 40+ developments in the last three years, inflating the skyline by 13.7 million sqft — including 11 completed projects totaling 3.85 million sqft in 2023. New construction slowed down in 2023 after years of nonstop growth, which can largely be attributed to a cooling real estate market, increased interest rates, and an uptick in layoffs.
Housing
Living Downtown is growing in popularity, and the area is 87.4% occupied. Downtown Austin is home to ~15,360 residents (compared to 14,300 reported last year) across ~10,324 residential units.
A peek into the demographics of downtown residents:
- Ages 25-37 on average
- 76.8% are college educated
- 57% are male
- 21.4% are “non-white”
- Have a $145,567 median household income
After a sizable rent spike to nearly $3.60 per sqft in mid-2020 through 2022, the daily asking rent in the area is starting to plateau to $3.16 per sqft.
Office space
Despite being home to 129,648 employees and employment rising 21% since 2020, Downtown office vacancy rates rose from 14% to 18.6% in 2023, reflecting popularity of hybrid and work-from-home models.
Downtown didn’t see strong leasing activity from tech companies, but leasing is still healthy for spaces under 20,000 sqft in other sectors. Meanwhile, an additional 2.56 million sqft of new office space is in the works.
Tourism
Although Downtown visitor traffic is 86%-94% of 2019 levels, traffic at Austin-Bergstrom International Airport hit record highs last year.
The tourism impact of Downtown events like SXSW, the CMT Music Awards, Moontower Comedy Festival, Free Week, and the Texas Book Festival brought in major numbers:
- $9 billion in total travel spending
- $2.9 billion in direct earning
- $750 million in travel spending tax revenue
- 68,190 jobs generated
Tourists have a home in Austin, with four new hotels opening in 2023 and 10 more in the planning or proposal stages.
Entertainment
At least 685 storefronts are open Downtown, representing an 88% occupancy rate (compared to 90% in 2022). Of those businesses, 54% are bars, restaurants, and food trucks.
Nightlife is a huge driver of Austin’s economy, representing:
- 174 drink + entertainment venues
- $2 billion in economic impact from live music
- 11,275 employees in the space
While 68 businesses in the area permanently closed last year, 55 new establishments opened in their place.
Transportation
When traveling Downtown, 70%-80% of people are doing so in single-occupancy vehicles. The Austin Strategic Mobility Plan aims to get that number down to 50% by 2039 through initiatives including Project Connect + the Cap and Stitch portion of the I-35 Expansion Project.
Though many folks are still traveling by car, Austin’s Red Line Commuter Rail ridership has increased by 170% since 2020.
Public space
In the 2023-2024 fiscal year, the Downtown Austin Alliance used 48% of its budget to make Downtown Austin a welcoming place by:
- Power washing 29.9 million sqft
- Cleaning 43,105 of trash
- Conducting 303 safety escorts
- Completing six beautification projects
Whew — if you’d like to learn more, read the full report.