About this series: The Cost of Living will explore how Austin became so expensive, who is being squeezed by the city\u2019s economic boom and what local leaders are\u00a0\u2014 or aren\u2019t\u00a0\u2014 doing to address it.<\/p>\n
In 1988, Robert Thayer packed his keyboard, his cat and everything else he owned into a Ford LTD coupe and drove east from El Paso to Austin.<\/p>\n
Like a lot of young musicians at the time, he had heard the same promise: if you wanted to make it in music, Austin was the place to be.<\/p>\n
Within a few years, Thayer\u2019s band\u00a0\u2014 Joe Rockhead, fronted by future Austin music fixture Bob Schneider\u00a0\u2014 was one of the city\u2019s most recognizable funk acts. On Wednesday nights at the Black Cat Lounge, crowds paid $4 at the door, and the band packed the room every week.\u00a0<\/p>\n
\u201cWe did incredibly well,\u201d he said. \u201cI would walk out of there with $500 in my pocket and a babe on each arm.\u201d<\/p>\n
He and his bandmates still considered themselves \u201cstarving artists.\u201d But in Austin, starving artists could survive. Thayer lived in an unairconditioned housing co-op in West Campus with a dozen or so roommates. He had to cook dinner for everyone on Wednesdays, but his room and board cost $205 a month.<\/p>\n
\u201cAt the time, affordability was everything,\u201d he said.<\/p>\n
For about two generations, Austin\u2019s relatively low cost of living allowed musicians, students and vagabonds to carve out lives in the city, helping shape the culture that inspired slogans like \u201cLive Music Capital of the World\u201d and \u201cKeep Austin Weird.\u201d But the economics of living in Austin have changed dramatically since\u00a0Thayer arrived.<\/p>\n
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Robert Thayer, a retired Austin musician and co-founder of the former funk band Joe Rockhead, plays keyboards in the room he rents in a shared house in Southeast Austin on Tuesday, March 10, 2026.<\/p>\n
Jay Janner\/Austin American-Statesman<\/p>\n
Rapid population growth\u00a0\u2014 including an influx of high-earning tech workers\u00a0\u2014 have driven up housing costs, which have far outpaced local wages and transformed what was once one of Texas\u2019 most accessible big cities into its most expensive. Today, more than one-third of Austinites spend over 30% of their income on housing\u00a0\u2014 the federal threshold for affordability\u00a0\u2014 as the rising cost of child care and everyday expenses like groceries are leaving many residents financially stretched.<\/p>\n
The American-Statesman will examine those pressures in an occasional series, The Cost of Living, exploring how Austin became so expensive, who is being squeezed by the city\u2019s economic boom and what local leaders are\u00a0\u2014 or aren\u2019t\u00a0\u2014 doing to address it.<\/p>\n
Affordability has also emerged as one of the defining political issues of the year. From City Hall to Congress, candidates increasingly frame debates about housing, transportation and economic growth around the rising cost of living.\u00a0<\/p>\n
Mayor Kirk Watson has made affordability his top priority and\u00a0says part of the goal should be making sure the city remains open to a wide array of populations, including young people who are starting lives and careers after coming to the city for college.<\/p>\n
\u201cMy number one thing is that you have to keep Austin Austin,\u201d he said.\u00a0<\/p>\n
Struggling to afford Austin? We want to hear from you. Please share your story with us via email at hello@statesman.com<\/a>.<\/p>\n Silicon Hills: Where the boom began<\/p>\n Many locals trace Austin\u2019s affordability crisis back to the mid-1990s, when Thayer\u2019s music career was taking off. The tech sector also was on a major upswing, earning Austin the moniker \u201cSilicon Hills.\u201d<\/p>\n By the end of the decade, affordability was a big topic at Austin City Hall. But Watson, who first served as mayor from 1997 to 2001 and returned to office in 2023, recalls that the term itself was politically sensitive at the time.<\/p>\n \u201cWhat was interesting is you couldn\u2019t use the word \u2018affordable,\u2019 because if you said \u2018affordable,\u2019 people all thought you were talking about Section Eight housing in their neighborhood,\u201d Watson said.<\/p>\n Still, housing costs were becoming a growing concern\u00a0\u2014 particularly for musicians like Thayer who had helped build the city\u2019s reputation as a cultural hub and burgeoning tourist destination.<\/p>\n Watson and the City Council passed a slew of policies during his first term meant to address the issue.<\/p>\n Kirk Watson, then candidate for Austin mayor, stops by the Texas Capitol for a press conference in March 1997.<\/p>\n ORG XMIT \/ Austin American-Statesman A year after taking office, Watson spearheaded a concept he called \u201csmart growth\u201d that prioritized housing density to combat urban sprawl and directed development toward Central and East Austin.<\/p>\n The following year, Watson and the City Council created the Austin Housing Trust Fund to help address a lack of affordable housing. The program directed property tax revenue toward building affordable housing and offering rental assistance.<\/p>\n In 2000, the council launched another program offering developers incentives such as waiving city fees to build income-restricted units.<\/p>\n Separately, a mayoral \u201cTask Force on the Economy\u201d emphasized the importance of the \u201ccreative class\u201d\u00a0\u2014 spanning high-tech, entertainment and media, education and professional services\u00a0\u2014 to Austin\u2019s economic and cultural vitality.\u00a0<\/p>\n According to then-City Council Member and chair of the task force Will Wynn, the effort yielded three initiatives for nurturing live music, film and technology in Austin, reducing bureaucratic hurdles for businesses and creating standardized incentives to attract major employers to the city.<\/p>\n Mayor Lee\u00a0Leffingwell, pictured in 2014.\u00a0<\/p>\n Laura Skelding\/Austin American-Statesman<\/p>\n Former Austin Mayor Lee Leffingwell, who served from 2009 to 2015, said many efforts city leaders previously took, particularly in housing, were well-intentioned but he questioned their effectiveness at the time\u00a0\u2014 and today.\u00a0<\/p>\n \u201cI just don\u2019t think the city \u2014 and this is not casting aspersions on city staff \u2014 but city governments are not very well-equipped to manage programs that involve development and things like that,\u201d he said. \u00a0\u201cI don\u2019t think there was much effect \u2014 not that the programs themselves were flawed, but maybe execution.\u201d<\/p>\n Brian Smith, professor of political science at St. Edward\u2019s University, said the smart growth policy proved effective at boosting housing stock but noted much of the development came in East Austin, which had the side effect of displacing long-time residents as property values increased.\u00a0<\/p>\n The policymaking and debate were closely chronicled in the Statesman, where headlines in the 80s and 90s frequently sounded the alarm on affordability with variations on: \u201cHousing: Who can afford it?\u201d<\/p>\n Austin American-Statesman headlines from the 1980s and 1990s frequently sounded the alarm on affordability.<\/p>\n Austin American-Statesman<\/p>\n \u2018Every discussion is about affordability\u2019<\/p>\n Concerns continued to intensify over the next several years, including during the late-2000s recession when many tech workers lost jobs or saw salaries cut.<\/p>\n Still, Austin\u2019s housing market proved more resilient than many others. While cities like Las Vegas and Phoenix saw home values fall by 64% and 56%, respectively, Austin\u2019s fell by only 8.5%.\u00a0<\/p>\n That stability created a foundation for Austin\u2019s rapid growth. From 2010 to 2015, Austin\u2019s population grew by\u00a017%.<\/p>\n By 2016, Thayer found himself living in a $1,200-a-month roach-infested apartment.<\/p>\n \u201cIt was ridiculous,\u201d he said. \u201cIt was eating up all my savings.\u201d<\/p>\n Former Austin City Council member Delia Garza, who now serves as Travis County attorney, at a press briefing\u00a0Sept. 17, 2024.<\/p>\n Jay Janner\/American-Statesman<\/p>\n Around that time, then-City Council Member Delia\u00a0Garza pushed to create a regional affordability committee bringing together leaders from Austin, Travis County, nearby suburbs and local school districts. But the effort struggled to gain momentum and eventually fizzled.<\/p>\n \u201cHonestly, I feel like what I learned pretty quickly is that every discussion at City Council is about affordability, so it did feel like an extra thing,\u201d\u00a0Garza said. \u201cI think we had some good discussions.\u201d<\/p>\n Growth continued largely unabated, briefly slowing during the COVID-19 pandemic before accelerating again. From 2023 to 2024, the Austin metro area was one of the fastest growing in the country<\/a>.\u00a0<\/p>\n That growth has been evident in the high-paying tech sector. University of Texas associate professor of finance, Michael Sury, said those workers have added to the competition for housing and goods, increasing \u00a0prices across the board, and creating a sense of wealth inequality.\u00a0<\/p>\n The \u201cgrowing tech and non-tech divide\u201d drives \u201cperceptions of feeling financially stretched, because you\u2019re not doing as well as your neighbor is,\u201d Sury said.\u00a0<\/p>\n A plummet in purchasing power<\/p>\n By some measures, Austin is thriving.\u00a0<\/p>\n It is the wealthiest large city in Texas with a median household income of $90,430\u00a0\u2014 about $8,000 higher than the next wealthiest, Fort Worth. The poverty rate is also among the lowest of large Texas cities.<\/p>\n Yet many residents say the city feels less affordable than ever.<\/p>\n Housing is the biggest factor, with child care also topping the list for many families.\u00a0<\/p>\n Austin now has the highest median housing costs<\/a> among large Texas cities, and home prices have grown far faster than incomes.<\/p>\n \u201cIf the things that you buy\u00a0\u2014 housing, childcare, entertainment, those kinds of things\u00a0\u2014 if that\u2019s rising faster than your income, you can actually feel poorer, even if your income went up,\u201d\u00a0Sury said.<\/p>\n The U.S. Department of Housing and Urban Development considers housing affordable when costs do not exceed 30% of a household\u2019s income.<\/p>\n In Austin, the average mortgage payment was $2,955 a month in 2024, according to Redfin. Under the 30% rule, a household would need to earn more than $118,200 annually to afford a typical home\u00a0\u2014 nearly $30,000 more than the city\u2019s median household income.<\/p>\n \u201cWhat matters isn\u2019t just your income; it\u2019s what you can do with that income,\u201d Sury said. \u201cThat\u2019s what economists call purchasing power, and the purchasing power in Austin has definitely declined, especially when it comes to housing.\u201d<\/p>\n According to census data, nearly half\u00a0of renters\u00a0and nearly a quarter of homeowners in Austin spend more than 30% of their income on housing.<\/p>\n At a February housing committee meeting, Erica Leak, the city manager\u2019s affordable housing policy lead, said the greatest need is for housing that is affordable to households earning under $60,000 a year.<\/p>\n \u201cWages are stagnating for essential workers who keep Austin running while the percentage of very high earners continues to grow,\u201d Leak said.\u00a0<\/p>\n Thayer has since found a more affordable housing situation, not unlike the co-op he started out in nearly 40 years ago. He rents a small room in a southeast Austin home for $680 a month, utilities included.<\/p>\n \u201cThat is affordable,\u201d he said. But living on Social Security and odd jobs leaves little room for extras.<\/p>\n Car insurance has become one of his biggest expenses.<\/p>\n \u201cInsurance used to be $18, $20 a month,\u201d he said. \u201cThat\u2019s what I paid for years, and now they want to charge me over $200, and I\u2019ve never even had an accident or gotten a parking ticket.\u201d<\/p>\n Robert Thayer, a retired Austin musician and co-founder of the former funk band Joe Rockhead, walks out of the shared house where he rents a room in Southeast Austin on Tuesday, March 10, 2026.<\/p>\n Jay Janner\/Austin American-Statesman City leaders say addressing Austin\u2019s affordability crisis will require action on multiple fronts.<\/p>\n Council members Krista Laine and Vanessa Fuentes recently announced plans to revive Garza\u2019s regional affordability committee with a focus on housing<\/a>, child care and transportation.<\/p>\n Laine said bringing regional leaders together could help identify solutions.<\/p>\n \u201cIt can be a very powerful tool if it is set up in a way that works well for the entire universe of entities it relates to,\u201d she said.<\/p>\n Travis County recently rolled out a voter-backed initiative to help lower-income families with child care \u2014 which\u00a0costs $13,000 per kid<\/a> annually on average in the county \u2014 but its exact impact remains to be seen.<\/p>\n Watson said tackling affordability will require changes to land-use rules, housing development, transportation and economic growth. He has prioritized reducing regulatory delays for housing development, noting the city\u2019s timeline for reviewing site development plans has dropped from more than 100 days to fewer than 30.<\/p>\n<\/p>\n
\nEarly efforts: Well-intentioned\u00a0but ineffective?<\/p>\n<\/p>\n
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\nWhat comes next for Austin\u2019s cost of living<\/p>\n