Gentrification in Austin Neighborhoods and Elsewhere

Shortly after moving to Austin, I joined the local neighborhood association. Our neighborhood group is not a homeowners’ association (HOA) with governance over architectural design or modifications, and it is not mandatory to join it. My reason for joining the HOA was to meet new neighbors and stay current with local events, ranging from zoning issues and parking restrictions to neighborhood art walks and new building permits.

Signing up for the association provided me with a link to its listserv, an email forum. This forum is frequently used to notify or ask members about lost pets, recommendations for tradesmen (carpenters, electricians, and plumbers), coyote sightings, petty thefts, and other items of interest to homeowners.

A recent post on the listserv noted that there had been six new building permits in our neighborhood, posted by the city in just a single day. This news was notable because the neighborhood was built in the 1940s, and there are very few vacant lots. The post triggered many responses, ranging from complaints about specific builders to rising property taxes because of newer infill houses and high demand for these new homes from people moving to Austin.

The comments prompted me to research gentrification in Austin. An article written by Yichen Su for the Federal Reserve Bank of Dallas described Texas gentrification as an influx of affluent, college-educated residents in the central city area of the state’s four largest cities, namely Austin, Dallas, Houston, and San Antonio.

According to Mr. Su, gentrification leads to improved neighborhood amenities, such as restaurants and shops. Gentrification generates increased housing costs that change the income mix of central city residents. The two graphs below show the change in college grads and income by distance from the city center for Texas’ four largest cities.

gentrification 1
Source: Federal Reserve Bank of Dallas.

While the central city income and education level increased in Austin and the other three cities, changes in the number of housing units and average home prices in those cities increased as well. In the tables below, it’s obvious that the low 20% increase in housing units in central Austin fueled the 100% increase in average cost of housing.

gentrification 3
Source: Federal Reserve Bank of Dallas.

The charts also illustrate that the greatest increases in housing units for Austin were at 10-20 miles and greater than 20 miles. Not surprisingly, these categories represented the lowest increases in average home values. Evidence that the gentrification has substantially impacted the poor and other vulnerable populations is visible in the Dallas Fed chart below.

gentrification 4
Source: Federal Reserve Bank of Dallas.

Austin had the highest percentage growth in residents without a college degree outside of the central city (growth rates of 50% and 70% at 10-20 miles and greater than 20 miles). Austin also had the largest percentage decline in low-income residents in the central city area of all four cities in Texas with nearly a 50% decrease. Those residents increased by 30% and 40% in the 10-20 mile and greater than 20-mile housing locations.

The percentage of Austin’s Black and Hispanic residents grew substantially in the 10-20 mile and greater than 20-mile locations. Sadly, this shift in location from the central city to the suburbs reduces these vulnerable groups’ options for public transit, social connections, and job opportunities.

Mr. Su writes that the gentrification trend will continue in Texas’ four largest cities. He states, “As more affluent residents move in, more economic opportunities will rise in central city neighborhoods, and amenities and quality of life will improve for local residents.”

In 2018, the Center for Sustainable Development of the School of Architecture and the Entrepreneurship and Community Development Clinic of the School of Law at the University of Texas in Austin created the Uprooted Project. This project was designed to study the gentrification of neighborhoods in Austin and to pinpoint where early intervention can help mitigate displacement.

In Part 1 of the Project’s report, I learned that gentrification originally referred to the displacement of an area’s lower-income residents. According to the report, the more recent application of the term to include any neighborhood that is becoming less affordable “trivializes the different outcomes for members of non-white racial and ethnic groups and for neighborhoods with histories of systemic disinvestment.”

While my knowledge of the “history” of my neighborhood in Austin is limited, this sentence triggered the thought that perhaps gentrification was the wrong term for what is happening. Later in the same section of the report, the authors note that there is no consensus on what gentrification is and whether it is good or bad. They add that “any reasonable person should be able to recognize that displacement is a matter of concern.”

Direct displacement occurs when residents can no longer afford to be in their homes due to rising rents or property taxes. Direct displacement can also happen when residents are forced out of their homes due to eminent domain, lease non-renewals and evictions, or deteriorating physical conditions.

Indirect displacement refers to changes in the neighborhood as low-income residents move out. It occurs when homes are vacated by low-income residents because they are no longer affordable. The process is referred to as residential succession when it occurs over time.

The last form of displacement mentioned in the report is cultural displacement. This displacement occurs through changes in the aspects of a neighborhood that “provide long-time residents with a sense of belonging and allowed residents to live their lives in familiar ways.” The report adds that “as the scale of residential change advances, and shops and services focus on new residents, remaining residents may feel a sense of dislocation despite physically remaining in the neighborhood.”

After reading this report, I believe that cultural displacement seemed like a better explanation of what is happening in Bouldin Creek. The area is substantially populated with homes, and its longest-term residents are not low-income. I looked for additional data in the report to confirm my intuition.

The Uprooted Project partnered with the Urban Displacement Project to create an overlay of Austin neighborhoods. This map shows the relative status of gentrification as well as the economic exclusion of lower-income quartiles from affordable housing in the neighborhood.

A color-coded scheme developed for each neighborhood is pictured below.

displacement Boston
Source: Urban Displacement Project.

The Bouldin Creek neighborhood primarily has two classifications, “Continued Loss Gentrification” and “Stable Exclusion.” There appear to be no areas on the map in the Bouldin Creek neighborhood that represent low-income neighborhoods at risk of displacement. Most of the Austin low-income displacement appears to be centered in East and Southeast Austin.

Using a term for a version of displacement, it appears that we have resident succession issues leading to cultural displacement. It is also evident that housing prices in this area will continue to escalate.

I love living in Austin, particularly so close to downtown. It appears that our area of the neighborhood is on the border of the continued loss and stable exclusion gentrification categories.

We have great neighbors. One family purchased and renovated their house 13 years ago. Another couple built their house 30 years ago, and three neighbors a few houses down the block live in homes owned by their families for more than 50 years.

The neighborhood is changing, though. In the pictures I took this week, you can see new homes under construction (the builders bought older cottages and tore them down for infill construction), older homes, older cottages, renovated cottages, and empty cottages waiting for the builder/purchaser to receive a permit to tear them down and build a new home.

Older recently renovated home
An older, more recently renovated home. Image courtesy of author.
two homes
Older cottage next to two newer homes. Image courtesy of author.
Austin home under construction Boston
A couple of new homes under construction. Image courtesy of author.
vacant home Boston
An older, vacant cottage. Image courtesy of author.

I began this post using the term “gentrification.” What is happening in my area qualifies for that term, but it is clearly not the highest-impact gentrification where lower-income residents are forced out of their neighborhoods. Based on the Uprooted Project report, the area most impacted by that type of gentrification is East Austin.

The broader category of gentrification is not limited to Austin or Texas. The Dallas Fed report that I accessed credited New York and San Francisco for some of the earliest central city gentrification trends, and the Uprooted Project states the term was created in London to describe neighborhood transitions in the 1950s and 1960s.

In a hot real estate market like Austin, classic economic theory applies where high demand and short supply will create rising prices and reduced affordability.

The authors of the Uprooted Project Report wrote “while there is disagreement about the potential benefits of rising property values and building upgrades and who receives these benefits, there is broad consensus that displacement is an undesirable side effect.” Their report provides a strategy recommendation for Austin and notes that it could cost several hundred million dollars per year to implement.

A former resident of our neighborhood posted on the listserv that he could not afford to pay Austin city property taxes on the house that he inherited from his mother (all residents receive a homestead exemption that limits property tax increases, and residents over 65 receive an additional exemption that carves out the K-12 schools’ assessment). He added that he sold her cottage and used the proceeds to buy a 19-acre ranch located 20 miles outside of the city, which I assume has lower property taxes.

The real estate market is cyclical. One of the things that made Austin an attractive city for relocation was affordable housing. As housing prices continue to escalate due to high demand, the number of people moving here will decrease. Real estate values in higher-priced neighborhoods will stabilize and maybe even decrease.

Will gentrification slow in Austin or anywhere else? Probably not, if the economics of redevelopment work. While cities can implement zoning changes and restrictions on new housing, the lure of new or increased property and income taxes is a huge barrier.

Austin changed some of its zoning to allow a higher density of single-family homes, but the outcome appears to be generating two expensive houses on the same piece of land where a single affordable home used to dwell. Housing solutions are complex, not easy to implement, and sometimes have undesired outcomes.

It may take years for recommendations from organizations like the Urban Displacement Project to take hold. Meanwhile, direct displacement and cultural displacement will continue.

It’s more likely that Austin’s city government will work on plans to mitigate direct displacement. However, I hope the ongoing cultural displacement in certain neighborhoods won’t change the overall character of the city.

Subjects of Interest


Higher Education

Independent Schools


Student Persistence