As Elon Musk’s companies continue their expansions in Texas, he has called for more housing in the Austin area to help house anyone who decides to make the move for new opportunities at Tesla or SpaceX. Real estate in Austin is starting to see a boom as companies increasingly abandon states with high taxes, like California and New York.
Elon Musk has recently been presented as leading the charge to Texas with his highly publicized fight with Californian state and county officials over the state’s response to the COVID-19 pandemic that Musk calls overly authoritarian and the state government’s increasingly unfriendly attitude toward businesses. Although the state does offer attractive tax incentives and rebates for the purchase of new electric vehicles, this was not enough to convince Musk to remain in the state and he has recently sold some of his Californian properties to developers.
Musk also recently made $30 million in donations for downtown renovation projects and education improvements in the Brownsville, Texas, area. He hopes that the donations will help to attract talented engineers and technicians who can work at SpaceX’s launch facility in Boca Chica. With the recent loss of four full-sized Starship prototypes during high altitude tests, the FAA has recently opened an investigation into possible safety issues surrounding these tests and the United States’ Congress would like SpaceX officials to answer some questions regarding the tests.
In the wake of Musk’s move, SpaceX is currently building a manufacturing facility in Austin to speed up production of Starlink satellites and ramp up its plan to provide global coverage for its Internet service. Starlink’s satellite constellation already has over 1,000 satellites out of a planned total of up to 42,000 in orbit. SpaceX has also sought a development manager for a planned luxury spaceport resort to host guests visiting its facilities in Boca Chica.
Tesla is also building a new manufacturing facility in Austin that is expected to start building electric vehicles in Q4 2021. The company has already announced plans to hire as many as 10,000 people and already has some job openings in the area available on the Tesla website’s career page.
With all this activity, Musk has predicted that Austin could become America’s next boom town. Austin has already seen record housing sales in 2020, according to a local property investment company called Norda Real Estate. The Austin Board of Realtors says that the prices of houses sold in 2020 jumped as much as 24% over 2019.
Some realtors have expressed concern that the skyrocketing prices are being driven by newcomers with more buying power than local residents, which could displace long-time residents who can’t keep up. The average newcomer has a budget of $852,500.
“Nearly every offer my clients make faces competition, and most homes are going for more than 20% over asking price,” said real estate agent April Miller in a feature on the local NBC station.
Musk’s call for more housing could help to provide a relief valve if developers are given a chance to catch up with growing demand quickly. Building more housing this early may help to dodge issues in other large cities in which there was a serious housing crunch, which led to restrictive housing codes and rent controls that could scare off prospective developers and landlords.
Increased available housing could also help to avoid issues caused by gentrification, in which lower value properties are snapped up by investors who tear down existing buildings and build new ones in the hope of drastically increasing property values. This can force out lower-income families who have fewer options for housing.
Musk has also expressed interest in developing his own “company town” near the Boca Chica launch facility, which could house employees and their families within a reasonable drive of the facility. He refers to the proposed city as “Starbase” in tweets.