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Can$Austin$Sustain$It’s$$Aggressive$Growth?$!

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Stephanie!Morrison!

Mercyhurst!University!May,!2015!

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Trend$Analysis$–$Austin,$Texas$Stephanie!Morrison!

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Professor:!Michael!Bogart!

INTL!520!–Advanced!Analytic!Technique!

May!18th,!2015!

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Executive$Summary$!

Texas!is!a!big!place.!!Austin,!Tx!is!getting!bigger!too.!!This!trend!analysis!study!looked!at!a!

defined!set!of!criteria!(population,!economy,!employment,!housing,!cost!of!living)!as!possible!

factors,!causes,!changes,!and!events!in!analyzing!a!pattern!or!“trend”!to!determine!if!Austin’s!

aggressive!growth!rate!in!the!past!five!years!can!sustain!itself!for!the!next!five!years.!!What!

does!this!trend!line!or!trajectory!for!the!next!five!years!based!on!the!data!tell!us?!!

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Daily!there!are!an!estimated!100+!people!moving!here!with!the!motivation!of!the!economy,!

employment/jobs,!cost!of!living,!quality!of!life,!and!the!popularity!of!living,!working!and!playing!

in!the!city!of!Austin.!!!Over!the!past!year,!Texas!added!jobs!in!all!of!the!11!major!industries,!

including!professional!and!business!services,!trade,!transportation!and!utilities,!leisure!and!

hospitality,!education!and!health!services,!construction,!mining!and!logging,!government,!

financial!activities,!information,!other!services,!and!manufacturing.!(The!Texas!Economy.org)!

The!Texas!economy!continues!to!outpace!the!national!economy.!!This!is!one!of!the!main!drivers!

attracting!and!moving!people!into!the!state,!and!Austin,!Texas.!!Austin’s!economic!drivers!are!

population!growth,!technology!and!enterprise,!education,!health!and!festival!economy!(South!

by!Southwest,!Austin!City!Limits,!Fun!Fun!Fest,!Formula!1!U.S.!Grand!Prix.!Combined!together,!

these!events!have!contributed!1.4!billion!into!the!economy!in!the!last!two!years.!The!economy!

also!added!more!than!39,000!jobs,!and!Austin!is!expected!to!add!more!than!69,000!new!jobs!in!

the!next!2!years!(2015,16).!

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Austin!has!received!more!than!50!local!and!national!rankings!since!2010.!The!quality!of!life!that!

Austin!boasts!is!a!reality.!!The!rankings!come!from!areas!such!as!economic!growth,!

environmental!leadership,!education,!quality!of!life,!and!real!estate.!A!citing!from!2011!&!2013,!

ranking!Austin!as!a!best!place!to!raise!a!family!–No.!4!and!is!poised!for!becoming!exceptional!in!

sports,!arts,!music,!and!culture.!With!over!200!annual!events!per!yr.,!there!is!no!shortage!of!

reasons!why!Austin!is!attracting!people!from!all!areas.!Austin’s!population!isn’t!slowing!down!

either.!66,000!people!moved!to!Austin!in!2014!and!the!same!is!projected!in!2015.!Commercial!

development!is!continuing!with!more!than!5c7!large!downtown!projects!in!construction!during!

the!next!several!years.!Unemployment!will!remain!below!4%.!The!highctech!industry!is!in!fullc

swing!with!125,000!workers.!!Because!Austin!remains!an!affordable!place!to!live!and!work,!

growth!in!the!Austin!MSA!has!skyrocketed!–!increasing!by!17!percent!since!2000!and!expected!

to!double!in!the!next!25!years!–!to!2,780,504!by!2030.!!

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However,!with!growth!come!challenges.!!My!insights!conclude!that!in!the!last!five!years,!Austin!

has!seen!strong!growth!and!population!increases!that!are!straining!its!infrastructure.!!!Based!on!

the!data!sourced!and!analyzed,!Austin!is!set!to!sustain!its!current!growth!rate!through!2020,!

but!not!without!its!problems.!!Austin’s!growth!is!suffering!in!three!ways.!My!analytic!findings!

are!that!the!three!longcterm!critical!issues!Austin!faces!are:!!1)!Transportation!–!

(traffic/mobility),!2)!Affordability/cost!of!living!(housing)!and!3)!Resources!(water!scarcity).!!!

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1.!Public!transportation!(mobility)!–!Austin!has!an!antiquated!transportation!system!that!is!

unsustainable.!!Work!commutes!have!increased!57%!between!2000c13.!Vehicle!miles!have!

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increased!283%!in!that!period!and!hours!delayed!on!the!roads!is!up!1,037!percent.!The!cost!of!

congestion!is!up!2,356!percent.!!There!are!estimates!that!there!will!be!an!additional!80,000!cars!

on!our!roadways!in!the!next!few!years.!According!to!experts,!it!costs!the!local!economy!nearly!

$600!million!a!year.!Austinites!are!commuting!640,000!hours!every!day.!This!is!not!sustainable!

and!will!affect!quality!of!life,!decreased!time!with!family!and!delays!getting!to!and!from!work.!!

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2.!Affordability/Cost!of!living!(housing)!–!Austin!has!the!most!expensive!housing!in!the!state.!!

Costs!have!skyrocketed!and!the!data!revealed!(and!I!agree)!were!in!a!bubble.!The!average!

home!price!in!Austin!is!$300,000!up!187%!since!the!1990’s.!!Escalating!real!estate!is!the!main!

concern!because!housing!costing!$150,000!or!less!does!not!exist.!!New!singlecfamily!residents!

(18,500)!and!(16,500)!new!apartment!unit’s!need!to!be!added!in!order!to!keep!up!with!the!

growth!rate.!Affordability!is!in!a!collapsing,!declining!downward!trend.!!

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3.!Resources!(water)!c!The!lack!of!sustainable!water!sources!is!a!major!concern.!!Austin’s!rapid!

growth!has!introduced!a!host!of!challenges!that!complicate!the!city’s!desire!to!balance!its!

growth,!development!and!environmental!protection.!!Water!scarcity!and!other!services!to!

supply!the!demand!are!on!the!rise.!!Conservation!of!current!water!supplies!along!with!limiting!

growth!is!things!people!are!worried!about.!!Many!view!the!current!growth!as!negative!and!

putting!a!drain!on!public!services,!environment,!social!and!the!economy.!!More!green!spaces,!

preservation,!ecosystems,!improved!transportation,!recycling,!and!waste!management!are!

things!that!the!analysis!show!are!lacking.!!!

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My!analysis!is!that!Austin!is!currently!experiencing!the!“growing!pains”!that!accompany!a!city!

expanding!too!fast,!resulting!in!direct!consequences!of!water!scarcity,!transportation!and!cost!

of!living!issues.!!Improvements!to!urban!and!the!regional!infrastructure,!water,!energy!and!

power!issues!need!to!be!a!top!concern.!Each!city!has!their!own!casecspecific!issues!unique!to!its!

own!climactic,!economic,!geography!and!social!situation.!Citizens!have!voiced!their!concerns!

over!rapid!growth,!a!lack!of!efficient!public!transportation,!cost!of!living,!and!quality!of!life!to!

the!City!Council!and!business!leaders.!!The!urban!development!sustainability!question!of!Austin!

depends!on!its!ability!to!reduce,!use!new!technologies!and!green!building,!solar!and!soil!

conservation,!and!preserve!existing!water!supplies.!More!people!are!beginning!to!rethink!the!

way!the!Austin!community!lives,!works,!and!plays,!so!that!together!we!can!find!new!solutions!

to!make!Austin’s!future!more!sustainable.!!!!

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Ultimately,!if!the!city!leaders,!business!community!do!not!respond!aggressively!and!proactively!

to!address!solutions!to!these!issues!in!finding!alternatives!to!mobility,!affordability!and!natural!

resources,!then!Austin!will!no!longer!hold!onto!its!ranking!as!the!desired!destination.!!In!

conclusion,!the!city!leaders!and!it’s!governance!need!to!demonstrate!a!greater!level!of!

transparency!and!visibility!about!their!programs!and!policies,!and!engage!in!more!effective!and!

accessible!forms!of!public!feedback!and!education!about!sustainability!issues!in!Austin.!!

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Table$of$Contents!$$Executive!Summary!.......................................................................................................!p.3c4!

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Introduction!......................................................................................................................!p.6!

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Terms!of!Reference!...........................................................................................................!p.7!

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Technique!/!Methodology!.................................................................................................!p.8!

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Analytic!Findings/Conclusion!....................................................................................!p.10c16!

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Outlook/Implications!.....................................................................................................!p.17!

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Next!Steps/Options/Recommendations!........................................................................!p.17!

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Personal!Reflection!........................................................................................................!p.18!

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References!......................................................................................................................!p.18!

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Appendices!................................................................................................................!p.19c20!

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Introduction$!

The!purpose!of!this!report!was!to!explore,!understand,!and!implement!an!analytical!technique,!

for!future!use!in!a!realcworld!application.!!The!analytic!technique!that!was!chosen!is!“trend!or!

timecseries!analysis”.!!Trend!analysis!by!its!nature!is!the!general!movement!over!time!of!a!

statistically!detectable!change.!!

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By!definition,!Trend$Analysis!is!the!practice!of!collecting!information!and!attempting!to!spot!a!

pattern,!or!trend,!in!the!information.!!When!trend!analysis!is!being!used!to!predict!the!future,!

keep!in!mind!that!the!factors!formerly!affecting!a!data!point!may!no!longer!be!doing!so!to!the!

same!extent.!This!means!that!an!extrapolation!of!a!historical!time!series!will!not!necessarily!

yield!a!valid!prediction!of!the!future.!Thus,!a!considerable!amount!of!additional!research!should!

accompany!trend!analysis!when!using!it!to!make!predictions.!

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For!this!reason,!I!chose!to!focus!on!the!events!and!changes!that!have!occurred!in!Austin,!Texas!

for!the!past!five!years.!Having!moved!to!the!city!in!2000,!many!growing!pains!have!occurred!

within!the!city,!including!an!ever!changing,!rapidly!expanding,!upward,!dense!downtown!skyline!

and!urban!sprawl.!!In!the!past!5!to!10!years,!specifically,!largecscale!population!growth!and!city!

wide!commercial!and!residential!development!has!been!happening!at!a!rapid!rate.!!The!subject!

matter!in!this!case!is!the!city!of!Austin,!Texas.!!The!problem!statement!or!question!in!reference!

to!the!technique!is:!!!

&How&do&trends&suggest&Austin’s&growth&rate&over&the&next&5&years&will&compare&to&the&past&5&

years?&!

The!purpose!of!my!analysis!is!to!determine!how!trend!analysis!can!predict!the!growth!rate!in!

Austin,!Texas!over!the!next!five!years!as!it!has!compared!to!the!past!five!years.!Is!it!in!an!

upward!or!downward!sloping!trend?!Based!on!certain!indicating!factors!or!events,!this!

technique!can!show!how!to!identify!and!spot!(i.e.,!variable!trends/characteristics)!that!are!

trademarks!of!fastest!growing!cities.!I!hope!to!examine!and!determine!if!this!growth!rate!can!

continue!and!any!comparative!analysis!that!develops.!The!variables/criteria!chosen!to!examine!

and!analyze!were!the!following!five:!!Population/people,!Economy,!Employment/Jobs,!Real!

Estate/Housing!and!CostcofcLiving/Affordability.!!!!

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Terms$of$Reference:$Question/Problem$Statement$$The!intent!of!this!analytic!technique!is!to!spot!actionable!patterns!in!the!presented!information.!

My!question/problem!statement!deals!with!trends!in!Austin,!Texas!and!whether!or!not!Austin’s!

(population,!economy,!employment,!housing,!cost!of!living)!suggest!growth!rate!over!the!next!

five!years!will!compare!to!the!past!five!years.!!The!time!frame!was!bound!to!a!fivecyear!period!

and!variables/criteria!were!identified!to!be!analyzed!and!plotted!on!a!trend!line!to!detect!which!

movement!or!change!is!occurring.!!The!reason!for!evaluating!these!factors!is!to!understand!if!

this!is!a!temporary!or!a!sustained!trend!that!will!continue!into!the!next!five!years!and!their!

impact!on!living!in!the!city.!!!

Through!trend!analysis,!I!will!identify,!examine,!and!analyze!the!variables!that!may!be!affecting!

this!topic!or!question!including!but!not!limited!to:!(population/people,!economy,!jobs!

market/employment,!attractiveness/popularity,!and!cost!of!living/affordability)!indicating!a!

trend!or!phenomenon!occurring!in!Austin,!Tx.!!An!(x/y!axis!chart)!will!visually!illustrate!the!

variables!or!component!changes,!(i.e.,!movement)!over!a!5cyear!period.!!These!variables!should!

answer!the!question!if!a!trend!is!occurring!and!whether!or!not!the!trend!is!in!an!increasing!or!

decreasing!state.!!!

The!hypothesis!I!will!be!testing!and!validating!is!that!the!identified!variables/criteria!are!

responding!positively!(upward)!or!negatively!(downward)!on!a!trend!line.!!The!use!of!

trend/time!series!analysis!to!this!project!will!indicate!and!show!how!known!variables!can!be!

used!to!predict!and!are!characteristic!of!a!fastest!growing!city!and!the!perceived!implications!

(negatives/positives)!outcomes!associated!to!my!topic.!!

I!expect!to!conclude!through!my!research!and!data!analysis!that!these!criteria/variables!are!

driving!forces!and!indicators!that!point!to!trends!in!why!Austin!is!experiencing!this!phenomenal!

growth,!making!it!become!one!of!the!fastest!growing!cities.!!!

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Technique/Methodology!!

The!analytic!technique!I!will!be!using!to!test!my!hypothesis!is!trend!analysis.!The!steps!taken!to!

implement!this!technique!are!as!follows.!!Through!the!terms!of!reference/topic!question!above,!

the!scope!was!determined!and!a!set!of!criteria!(variables)!was!chosen!to!analyze!and!evaluate.!

The!first!step!involved!was!identification!of!hypothesis!and!counter!arguments!to!present!a!

foundational!basis!for!trend!identification!or!phenomenon!occurring.!Identification!of!sources!

and!data!size!of!the!variables!was!also!determined.!The!first!actual!step!is!to!measure!an!event,!

occurrence,!or!phenomena!over!a!specific!time.!!The!second!step!is!to!identify!and!recognize,!

spot!or!look!for!patterns!of!the!variables/criteria!chosen!by!which!these!events!or!“trends”!are!

being!detected.!The!five!variables!examined!are!(Population,!Economy,!Employment,!Real!

Estate/Housing,!Costcofcliving).!!The!third!step!in!the!process!is!to!determine!the!data!size!and!

data!collection.!The!time!is!also!established!or!bound!of!the!data!pertaining!to!the!specific!

variables/criteria!chosen!under!study.!The!fourth!step!in!this!process!will!be!to!evaluate,!

interpret!and!understand!what!the!results!of!the!data!prove!or!disprove!towards!my!topic!

question.!Then!next,!an!initial!line!chart!is!created!that!will!show!movement!(either!

upwards/downwards)!evidence!of!the!trend!and!possible!causal!reasons!or!hypotheses.!!The!

fifth!step!will!be!to!summarize!and!report!on!the!information!and!report!the!changes!of!the!

variables!on!the!timeline.!The!next!step!involves!validation!of!the!theory,!i.e.!(predictions)!and!

forecasting!based!upon!the!implications!and!results.!The!sixth!step!involves!listing!conclusions!

or!interpretations!on!what!the!data!revealed.!Based!on!the!results!of!the!analysis!

recommendations!are!made!that!can!forecast!or!predict!future!events.!Last,!the!results!of!the!

report!are!shared!to!allow!peers/others!to!examine!a!test!case!before!the!final!project!is!

complete.!

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The!following!chart!provides!an!overview!of!the!techniques’!strengths!and!weaknesses:!!

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Strengths$!

Weaknesses$ Address$weaknesses$by:$

Based!on!verifiable!data.!

Allows!analyst!to!study,!

measure!an!analyze!any!

data,!variables!or!

information!

Reliance!on!data!is!

historical.!Historical!data!

may!not!reveal!or!show!an!

underlying!trend,!

occurrence!happening!in!

real!time!

Ensure!the!integrity!of!the!

data!is!accurate,!clean!and!

relevant!variable,!criteria!

being!assessed!are!accurate!

and/or!valid!

Can!detect!statistical!

changes!over!a!period.!Can!

take!advantage!of!

opportunities!of!the!trend!

An!educated!guess;!not!an!

exact!science.!Factors!can!

influence!or!make!difficulty!

in!getting!clear!picture!of!

situation;!actual!trend!

Spot!discontinuities.!

Knowing!when!a!trend!

begins!and!ends!!

Visually!represents!data!

points!which!to!understand!

relationships!

With!webcbased!data,!

anything!over!one!year!is!

considered!invalid!in!the!

digital!work.!!

Difficult!to!spot!or!know!a!

trend!when/while!it!is!

occurring!

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Strengths$!

Weaknesses$ Address$weaknesses$by:$

Can!forecast!growth!and!

anticipate!where!problems!

may!arise!by!analyzing!

seasonal,!cyclical,!and!longc

term!trends.!

Difficult!to!spot!or!know!a!

trend!when/while!it!is!

occurring!

Differentiate!between!the!

analysis!of!fact!and!

resultant!conclusions!

Determine!which!

events/criteria!should!be!

included!in!timeline!

Time!frame!defined!is!too!

short!to!analyze!or!come!to!

any!trend!conclusion!if!less!

than!2!years!

Allow!sufficient!length!of!

time!to!determine!if!a!true!

trend!is!occurring!!

Analyzing!cyclical!or!

seasonal!data!is!possible;!

Can!anticipate!where!

problems!may!arise!in!

business!cycles!

Time!frame!defined!is!too!

short!to!analyze!or!come!to!

any!trend!conclusion!if!less!

than!2!years!

Data!can!be!replicated,!

checked,!updated,!and!

refined!when!necessary.!!

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Can!be!done!in!a!variety!of!

ways!and!is!common!in!

practice.!Gives!specific!

entry/exit!points!of!events!

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The!technique!has!satisfied!my!criteria!that!were!chosen!and!evaluated.!My!success!

variables/criteria!of!the!technique!allowed!me!to!see!the!variables!plotted!on!a!timeline!and!

see!whether!an!upward!or!downward!trend!has!or!is!occurring.!The!result!is!an!increase!or!

decrease!state!in!their!occurrence.!Trend!analysis!has!allowed!me!to!create!a!visual!

representation!of!these!variables/criteria!and!see!whether!a!movement!is!on!the!rise!or!

decline.!Through!the!application!of!trend!analysis!to!my!topic/question,!I!have!also!learned!

what!the!weaknesses!are!to!trend!analysis!and!how!to!overcome!some!of!them,!while!knowing!

what!the!limitations!are!however;!it!is!not!a!perfect!technique.!Longcterm!projects!require!

more!data!to!support!them!and!if!turning!points!are!clearly!visible.!!One!can!never!know!with!

certainty!when!a!trend!truly!begins!and!ends.!Being!able!see!and!understand!turning!points!

within!the!trend!is!usually!not!understood!by!the!analyst!until!after!the!fact.!

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$Analytic$Findings$and$Conclusions$!

In!the!last!five!years,!Austin,!Texas!has!seen!significant!and!aggressive!growth.!!Based!on!this!

fact,!indicators!are!suggesting!that!Austin!is!continuing!to!be!one!of!the!fastestcgrowing!cities!in!

the!U.S.!!Topping!the!Forbes’!list!for!the!4th!year!in!a!row,!here’s!why.!!Given!its!businessc

friendly!regulatory!environment,!lack!of!state!income!tax!for!corporations!or!people,!and!highly!

educated!labor!market,!it!is!not!surprising!that!Texas!continues!to!grow.!!

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With!Austin’s!estimated!2.5%!population!growth!rate!for!2013—the!highest!of!all!the!

geographic!regions—and!an!economy!that!expanded!5.9%!last!year,!it!is!hard!for!other!cities!to!

compete.!In!addition!to!major!corporations!like!Whole!Foods!and!Dell,!Austin!now!boasts!some!

(4,700)!technology!companies!that!represent!about!35%!of!the!area’s!total!payroll.!Athena!

Health!is!bringing!607!jobs!to!Austin,!and!San!Franciscocbased!Dropbox!is!expanding!as!well.!!

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Austin’s!quality!of!life!has!become!its!biggest!economic!development!engine,!and!the!city’s!

diverse!demographic!structure!serves!to!support!and!enrich!its!quality!of!life.!!Austin!is!in!the!

top!30!fastest!growing!large!(1.0)+!MSA!with!3.0%!annual!growth.!!Travis!county!(Austin)!is!in!

the!top!15!fastest!growing!large!(250k+)!US!counties!from!2010c13!with!+100,000!people.!

The!demographic!trends!(listed!below)!are!showing!that!a!“longcterm,!sustained,!rapid!

population!growth”!is!occurring!and!will!continue,!but!with!some!problems!as!well.!!

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Demographic!Issues!within!the!City!

1.! An!uneven!landscape!of!growth!and!decline.!2.! Profound!racial!and!ethnic!diversification!3.! Growth!from!Hispanics!dominates!growth!

4.! Deepening!poverty!differentials!5.! New!political!landscapes!

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In!conclusion,!what!the!chart,!trend!line!reveals!is!that!with!population!growth,!the!movement!

is!increasing!upward!and!there!is!no!sign!of!people!slowing!down!to!get!here.!!Since!2010,!a!

12.4%!increase!has!occurred!with!that!trend!continuing!on!an!upward!trend.!!With!the!current!

unemployment!rate!at!in!Austin!at!2.9%!(May!2015),!well!below!national!average,!this!trend!

line!is!in!a!steep,!steady!decreasing!slope.!!The!two!negative!findings!in!the!variables!are!real!

estate/housing!and!the!cost!of!living.!These!two!criteria!are!also!showing!movement!on!the!

trend!line!in!an!upward!(positive)!trend/line,!but!with!a!negative!consequence.!!The!demand!for!

housing!cannot!keep!up!with!the!amount!of!supply!that!exists.!!Currently,!there!is!a!twocmonth!

inventory!deficit.!!With!a!continued,!sustained!population!increase,!housing!costs!is!driving!

affordability!to!a!collapsing!state.!More!people!rent!than!own.!More!than!35%!of!their!wages!

are!paying!for!rent/housing!costs.!!For!the!past!five!years,!this!trend!has!shown!to!be!on!the!

incline!and!does!not!appear!to!be!yielding.!This!makes!living!in!Austin,!expensive!and!to!some,!

not!affordable!and!unsustainable!for!a!certain!segment!of!the!population.!!

$$

! 11!

$Population!–!!

In!2014!and!2015,!about!66,000!people!moved!to!Austin,!Tx.!!People!are!moving!to!Austin!to!

chase!the!jobs,!as!the!metro!boasts!the!3rd!highest!net!migration!rate!in!the!U.S.!over!the!last!5!

years.!Austin!continues!to!be!a!major!technology!center!attracting!companies!like!Dropbox,!IBM!

and!Oracle!all!announcing!major!expansions!in!the!area!over!the!last!year.!Technology!security!

firm!Websense!revealed!plans!in!February!to!move!its!corporate!headquarters!to!Austin!from!

San!Diego!in!a!deal!that!will!create!470!jobs.!!!This!chart!and!trend!line!show!that!this!growth!

pattern!has!been!steadily!increasing!and!will!continue!through!2020.!!What!this!means!to!the!

average!person!on!a!daily!basis!is!that!with!the!population!rising!expect!to!sit!in!traffic!longer!

and!have!more!congestion.!!!

!

!

!

$

Economy$–!!!

The!Texas!economy!is!the!second!biggest!in!the!U.S.,!behind!only!California.!Texas!ranks!first!for!

both!current!economic!climate!and!growth!prospects.!The!Texas!economy!is!expected!to!

expand!4.1%!annually!over!the!next!five!years,!which!is!second!best!in!the!nation.!Forbes!

ranking!looks!at!36!data!points!across!6!areas:!business!costs,!labor!supply,!regulatory!

! 12!

environment,!economic!climate,!growth!prospects!and!quality!of!life.!Business!costs,!which!

include!labor,!energy!and!taxes,!are!weighted!the!most!heavily.!(Forbes,!11/12/14)!

The!Austin!economy!grew!at!a!steady!pace!in!through!November!2014.!Jobs!grew!at!a!modest!

pace!of!2.3!percent!annualized,!while!the!unemployment!rate!at!a!low!4.1%.!Employment!in!

technology!industries!in!Austin!had!led!overall!job!growth!in!the!postcrecession!period,!

although!there!are!signs!that!this!growth!may!have!moderated!in!the!later!half!of!the!year.!!

Real!estate!markets!continue!to!grow!strongly!in!Austin,!as!new!construction!and!home!price!

appreciation!show!few!signs!of!dampening!in!the!near!future.!

The!Austin!Businessccycle!index!grew!at!an!8.5!percent!annualized!rate!over!the!six!months!

ended!in!November!2014,!slightly!below!the!8.8!rate!that!the!index!has!grown!year!to!date!in!

2014.!!Continued!stead!job!growth,!a!low!unemployment!rate!ad!strong!growth!in!retails!sales!

have!contributed!to!recent!gains!in!the!index.!!

Austin!is!averaging!5.7%!annual!GDP!growth:!nearly!2.0!%!increase!of!the!US!economy.!Austin!is!

winning!the!war!for!talent.!Austin!will!be!the!fastest!growing!large!U.S.!metro!economy!through!

2020.!Among!the!100!largest!U.S.!metros,!Austin!ranks!No.!1!for!real!gross!metropolitan!

product!(GMP)!growth!in!2013!and!it!ranks!No.!1!for!real!average!annual!percent!change!in!

GMP!through!2020.!!!!

Austin’s!2013!growth!was!4.6%,!followed!by!San!Jose!and!Nashville,!both!with!4.2%!growth.!In!

2013,!Austin!had!53,700!manufacturing!jobs!and!grew!by!2.7%!over!the!last!year!(compared!to!c

0.9%!over!2008c2013).!!!The!city!of!Austin!is!projected!to!see!annual!average!real!growth!of!

4.4%!from!2013!to!2020.!!Information,!professional!and!business!services,!education!and!health!

services!are!named!as!dominant!sources!of!Austin’s!growth!through!2020.!!

!

! 13!

!

Unemployment/Jobs$–$

Austin!employment!will!grow!at!the!fastest!pace!in!the!nation!supported!by!government!hiring!

and!a!thriving!technology!sector,!boding!well!for!retail!operations.!The!region!is!home!to!

facilities!for!industry!brands!such!as!Apple,!Google,!Samsung,!and!Visa.!Recently,!Apple!

announced!it!will!manufacture!new!desktop!computers!in!Austin,!helping!to!create!800!

positions!at!Flextronics,!a!hardware!provider.!Ancillary!and!startup!tech!companies!will!

continue!to!establish!new!facilities,!as!additional!jobs!bolster!household!growth.!Austin!is!not!

creating!enough!“middlecwage”!jobs.!Austin!has!added!225,000!people!with!bachelor’s!degree!

or!higher!since!2000!(17,000!per!year),!being!the!only!MSA!in!top!25!with!population!of!less!

than!2!million.!

Austin!is!one!of!the!10!Metros!with!the!Highest!Gains!in!Share!of!U.S.!Jobs—and!leads!the!top!

10!for!percentage!of!total!employment!due!to!regional!competitiveness.!Using!a!standard!

regional!analysis!called!shift!share,!CareerBuilder!and!EMSI!looked!at!the!total!job!growth!

across!industries!for!each!of!the!50!most!populous!U.S.!metros!from!2010!to!2013.!Each!

metro’s!actual!job!growth!was!then!compared!to!what!would!have!been!expected!for!that!

metro!based!on!national!job!growth!trends!during!that!same!time!period.!The!difference!

between!the!two!measurements!is!the!competitive!effect,!i.e.,!how!much!the!metro!is!

exceeding,!matching!or!falling!behind!national!job!growth!trends!because!of!something!unique!

to!that!metro’s!regional!economy.!

!Austin!is!one!of!the!U.S.!metros!capturing!a!larger!share!of!the!total!jobs!added!in!the!U.S.!

because!of!factors!that!are!unique!to!its!local!economy.!From!2010!to!2013,!total!U.S.!

employment!grew!4%.!It!would!be!expected!that!Austin!would!add!jobs!at!the!same!rate!during!

! 14!

this!period!(translating!to!29,152!jobs!with!industry!trends!at!the!national!level!factored!in),!but!

Austin!actually!added!a!total!of!84,774!jobs.!While!29,152!of!that!total!may!be!associated!with!

national!growth!trends,!the!remaining!55,622!jobs!is!an!indicator!of!regional!market!dynamics!

at!play!within!this!metro!that!are!causing!it!to!significantly!outpace!the!national!growth!

average.!Some!major!metros,!such!as!New!York,!Chicago!and!Philadelphia!which!each!produced!

more!than!100,000!new!jobs!since!2010,!showed!a!negative!competitive!effect!–!trailing!

national!growth!trends.!(CareerBuilder,!7/2/14)!!

!

!

$Real$Estate/Housing$–$$Due!to!the!population!explosion!and!migration,!the!real!estate/housing!marketing!in!Austin!has!

been!somewhat!hot.!!Supply!is!not!keeping!up!with!demand.!Some!say!that!Austin!is!in!a!

housing!bubble.!Others!contend!that!were!not!building!more!product!than!the!market!is!

demanding.!There!is!an!under!supply!that!exists,!which!is!why!prices!are!increasing.!Housing!is!

expensive!in!Austin,!Tx!relative!to!other!highcperforming!MSA!metro!areas.!!!

!

Austin!is!the!most!expensive!housing!market!in!Texas.!With!that,!Austin!is!the!2nd!best!real!

estate!market!in!the!country.!!Houston!claims!the!no.!1!spot!in!this!year’s!survey!of!real!estate!

investment!experts!around!the!world!and!Austin!moves!into!the!no.!2!position,!pushing!

perennial!tip!market!San!Francisco!to!no.!3,!with!Denver!and!DallascFort!Worth!rounding!out!

the!top!5.!Austin!ranks!No.2!for!investment,!No.!4!for!development,!and!No.!1!for!

homebuilding.!!Austin!has!been!a!favorite!of!survey!respondents!for!a!number!of!years.!Survey!

! 15!

respondents!and!interviewees!like!the!industrial!base,!the!appeal!to!the!millennial!generation,!

and!the!lower!cost!of!doing!business!in!Austin.!Investors!continue!to!like!markets!with!vibrant!

urban!centers!and!Austin!has!seen!significant!urban!center!population!growth!(8.6%!between!

2010!and!2013).!Austin,!ranked!tops!for!both!office!investment!and!development!in!this!year’s!

survey,!has!garnered!national!and!international!recognition!as!a!live/work/play!downtown.!

(Urban!Land!Institute,!10/22/14)!!

Permits!for!new!residential!construction!in!November!(2014)!dipped!slightly!in!Austin,!though!

the!fivecmonth!average!remains!close!to!its!postcrecession!highs.!New!multifamily!units!

continued!to!lead!permit!growth!in!the!past!six!months.!However,!continued!home!price!

appreciation!has!pushed!singlecfamily!construction!up!significantly,!with!yearctocdate!permits!

up!25!percent!compared!with!2013.!Hiring!in!construction!shows!no!signs!of!slowing,!indicating!

that!2015!will!likely!continue!to!be!a!strong!year!for!housing!markets!in!Austin.

!$Cost$of$living$–!!The!ACCRA&Cost&of&Living&Index!measures!regional!differences!in!the!cost!of!consumer!goods!

and!services,!excluding!taxes*!and!noncconsumer!expenditures,!for!professional!and!

managerial!households!in!the!top!income!quintile.!It!is!based!on!more!than!50,000!prices!

covering!almost!60!different!items!for!which!prices!are!collected!three!times!a!year!in!each!

participating!urban!area.!The!composite!index!is!based!on!six!components!weighted!to!reflect!

the!cost!differentials!for!professional!and!executive!households!in!the!top!income!quintile!–!

! 16!

housing!(29.27%),!utilities!(10.22%),!grocery!items!(13.31%),!transportation!(9.86%),!health!care!

(4.23%)!and!miscellaneous!goods!and!services!(33.11%).!!Each!cost!of!living!index!is!based!on!a!

national!average!of!100.!If!the!amount!is!below!100,!it!is!lower!than!the!national!average.!If!the!

amount!is!above!100,!it!is!higher!than!the!national!average.!

!

The!cost!of!living!in!Austin!is!much!less!than!many!major!cities!–!and!that!is!yet!another!reason!

companies!–!and!relocating!families!–!are!attracted!to!the!area.!But!inside!Texas,!it!costs!more!

to!live!in!Austin!than!Dallas,!Houston!or!San!Antonio!and!the!Capital!City!is!the!most!

economically!segregated!metro!in!the!country.!!

!

•!The!cost!of!living!in!Austin!is!15.3%!greater!than!the!Texas!average.!•!The!cost!of!living!in!Austin!is!3.7%!greater!than!the!national!average.!!

The!city!demographer,!Ryan!Robinson!has!commented!that!!"No,!it's!not!an!erosion,!it's!a!full!

on!collapse!of!affordability."!!The!one!thing!to!blame!is!housing.!!More!people!in!Austin!rent!

than!own.!According!to!2013!US!Census!data,!Austin's!median!rental!rates!are!the!ninth!most!

expensive!out!of!the!country's!30!biggest!cities.!Home!values!come!in!as!the!11th!most!

expensive.!!In!2014,!the!median!home!cost!$239,900,!about!$79,000!more!than!in!2005.!But,!

the!median!family!income!only!increased!by!about!$8,000.!!Relatively!stagnant!wages!coupled!

with!steep!increases!in!housing!costs!are!the!main!forces!driving!our!affordability!collapse.!!

Compared!to!the!northeast!and!California,!Austin!is!still!affordable.!!That!gift!comes!with!a!

curse.!People!are!moving!to!Austin!from!those!areas,!creating!more!demand!for!homes.!

$$

$$

! 17!

Outlook$and$Implications!!

What!the!findings!mean!for!the!city!of!Austin!is!that!like!it!or!not,!people!are!moving!here.!!The!

“old!Austinites”,!complain!that!all!the!real!hippies!and!weirdness!are!all!but!gone!now...and!

other!outsiders!are!taking!over.!!The!implications!from!the!variables/criteria!examined!imply!

that!the!future!of!Austin!is!currently!experiencing!an!upward!sloping!trend!that!is!

unprecedented!in!areas!of!population!growth,!economy,!employment,!housing!and!cost!of!

living.!!What!this!means!is!that!in!all!sectors,!Austin!is!experiencing!rapid!change!and!growth!

that!the!city’s!infrastructure!cannot!keep!up!with!the!pace.!!The!trajectory/trend!line!appears!

to!indicate!that!over!the!next!five!years,!in!comparison!to!the!past!five!years,!this!trend!is!going!

to!remain!and!continue!trending!upward.!!

!

One!negative!implication!from!this!population/migration!growth!is!water!scarcity.!!Texas!as!a!

whole,!but!in!particular,!the!Austin/Hill!country!area!has!been!under!a!drought!for!the!past!five!

+!years.!A!water!facility!plant!has!been!under!development!for!years!and!is!still!unfinished!to!

date.!!Other!concerns!with!more!people!moving!to!Austin!puts!demands!on!services!like!energy,!

waste!water,!and!creates!more!pollution,!congestion,!trash.!!Another!implication!of!the!shift!in!

the!Austin!business!sectors!is!that!Austin!is!not!creating!enough!“middlecwage”!jobs.!The!divide!

is!widening!between!the!affluent,!highly!skilled,!educated!workers!and!middle!class!families.!!

$Next$Steps/Options/Recommendations$!

What!the!variables/criteria!reveal!about!the!city!of!Austin!is!that!it!is!in!a!state!of!“trending!

upward”!towards!future!growth!that!will!continue!at!a!consistent!rate!that!it!has!been!

experiencing!in!the!past!five!years!through!2020.!!The!recommendation!would!be!to!look!at!

issues!that!are!going!to!present!challenges!as!more!people!coming!to!Austin!arrive.!!

!

The!City!Council!of!Austin!is!under!new!leadership!with!a!new!Mayor!elect!and!a!new!10!district!

member!representatives.!Previously,!there!were!eight!member!city!council!representatives.!

With!the!entrance!of!new!leadership!and!directive!from!the!general!public!election,!the!

overwhelming!tone!is!that!citizens!are!concerned!about!three!main!issues!facing!Austin,!Texas!

in!the!coming!years.!The!fall!out!and!consequence!of!affordability!is!creating!a!displacement!of!

the!city’s!diverse!minorities!(mainly!African!American!and!Hispanic)!to!the!outer!suburbs!or!

eliminated!from!the!neighborhoods!(urban!core)!in!which!they!had!a!presence!due!to!

commercial!development!and!the!geographical!location!of!these!communities!being!in!prime!

real!estate!proximity!to!the!downtown!area.!!The!second!issue!for!the!city!is!transportation!and!

mobility!issues!are!a!major!threat!to!the!population!getting!to!and!from!work!affecting!daily!

commute!time.!!A!need!for!a!subway!or!metro!(not!light!rail)!so!you!can!get!from!one!place!to!

another!very!quickly!is!desperately!desired.!!!Other!attempts!have!previously!failed!by!Austin!

residents!voting!down!light!rail!due!to!cost!and!constraints.!!!Lastly,!the!next!steps!for!city!

planners!is!to!address!the!amount!of!available!water!resources!to!supply!the!existing!

population(s)!as!well!as!the!expected!growth!in!order!to!serve!the!community.!This!is!not!an!

understatement!when!the!numbers!tell!a!sobering!tale!and!the!warnings!issued!from!those!

watching!the!trends!and!their!movements,!which!all!point!up.!!

! 18!

!

My!recommendation!would!be!that!for!city!government!to!be!successful,!it!should!rely!on!

maintaining!a!steady,!clear!and!direct!line!of!communication!with!its!citizenry!in!order!to!have!

builtcin!and!awareness!about!these!issues,!policy!initiatives!and!programs.!They!should!make!

efforts!to!maintain!transparency!and!accountability.!!!

Personal$Reflection!!

My!reflection!on!INTL!520!has!piqued!my!interest!overall!in!the!process!of!measurement!and!

how!it!can!be!used!in!almost!everyday!business!and!life!applications.!!Throughout!this!class,!I!

found!myself!mentally!using!a!technique!from!a!unit!studied!or!a!theory!from!How!to!Measure!

Anything!in!my!everyday!use.!!I!am!not!as!intimidated!by!the!tasks!of!abstract!or!vague!

problems!with!regard!to!data!and!having!applied!the!Fermi!technique!to!break!down!pieces!to!

simpler!terms!in!order!to!know!something!more!intuitively!and!creatively.!!!

!

The!Literature!review!exercises!seemed!to!bring!me!the!most!challenges.!!After!the!2nd!time,!it!

was!easier.!With!the!HowcTo!and!Personal!test!case,!my!understanding!of!trend!analysis!was!

developed!to!a!deeper!level.!!Of!my!original!assumptions/hypothesis!developed!during!the!

Assumption!Surfacing!exercise,!all!tested!to!be!true!except!for!one!regarding!Austin!having!

labor!shortages.!Just!the!opposite,!Austin!has!a!highly!skilled,!trained,!educated!force!fueling!

the!growth!job!in!the!local!economy.!!!

$References$!Austin!Skyline!–Future!2020.!(Cover!photo):!!Retrieved!on!5/13/2015!from:!!

http://www.reddit.com/r/Austin/comments/2bx7rs/austins_future_skyline/c!!

!

The!Texas!Economy.!(May!11,!2015)!Retrieved!from:!http://thetexaseconomy.org/economiccoutlook/!

!

City!of!Austin.!Robinson,!Ryan.!(2015).!!Demographics.!!Retrieved!from:!

https://www.austintexas.gov/demographics!

!

The!Brookings!Institute.!(May!16,!2015)!Retrieved!from:!http://www.brookings.edu!

!

Urban!Land!Institute!(Austin).!Retrieved!from:!http://austin.uli.org!

!

The!Council!for!Community!and!Economic!Research.!Retrieved!from:!https://www.c2er.org!

!

The!Cost!of!Living!Index.!(C2ER)!Retrieved!from:!https://www.coli.org!

!

Federal!Reserve!Bank!of!Dallas.!!AustincRound!Rock!(MSA)!Retrieved!from:!

http://www.dallasfed.org/research/econdata/mbci.cfm!

!

Career!Builder.!Retrieved!from:!http://www.careerbuilder.com/?cbRecursionCnt=1!

!

HIS!Global!Insight.!!Retrieved!from:!http://www.globalinsight.net!

!

Long,!Joshua.!Dr.!(2013).!“A!Sustainable!Austin.”!!Environmental!Studies.!!!

http://www.southwestern.edu/live/files/2612cacsustainablecaustincresearchcproposal!

! 19!

Appendices)

!

! 20!

!!!!