Working Photographer. Living in a boom town. Yikes.

Is the Austin real estate boom a giant bubble just waiting for the right pin?

 I arrived in Austin, Texas in 1974. At that time it was a sleepy little college town with a big University, some state offices and not very many other employment opportunities. The flip side of the equation was that you could get everywhere (safely) on a bicycle, center city apartment rents were about $75 a month and everything (and I mean EVERYTHING) was cheap as dirt. Students mostly did not have cars back then. The University offered nearly free health insurance. Shiner Bock beers were $0.25 unless you were drinking at one of the three or four upscale hotel bars --- then you might pay a full buck for a cold one. 

We probably boasted more PHD degreed waiters and busboys, per capita, than any other city in the country because there were so few "real" jobs but the vibe was great and the cost of living was so low that no one wanted to leave after they graduated from UT. How could you blame us when you could see the Talking Heads and the B52s at the Armadillo Headquarters for $4? And then walk back home to your apartment. Safely.

It took time but it's all changed. We've grown from an MSA of a little over 125,000 people to well over 1.5 million and counting. What happened? Well, since UT had (and still has) a very good electrical engineering school and a great mechanical engineering school, and a great business school, tech companies and early high tech start-ups started to gravitate here and put down some real money. They hired and paid people salaries that matched those in more expensive parts of the country. And then layer after layer of peripheral and support companies moved in to take advantage of proximity. Followed by retailers and restaurant chains. Dry cleaners and yoga studios. And lots and lots of subdivision housing developments.

Now we have Dell, IBM, Samsung, Intel, AMD, NXP, Apple, Tesla, Google, and thousands of other companies clamoring for some real estate and a chunk of the talent here in central Texas. They came here because companies like Texas Instruments and Motorola had discovered that lower costs, better lifestyles and a highly educated workforce were cool secret weapons to use against their competitors. Now it's all a "virtuous" spiral. 

I graduated from UT, taught at UT, got recruited away to work in advertising (mostly for tech companies) before finally finding the courage to do what I'd always wanted to do --- pursue photography as both a passion and a business. And it was just the right time and place to do so. By the mid-1980s this place was growing so fast it was hard to keep up with the city's boundaries. We worked seven days a week all the way through the 1990's ---  and for good fees.

While local commercial/corporate photographers didn't demand rates as high as their counterparts in NYC and LA the trade off was a much less stressful existence and, still, much lower costs of living. 

I've always lived within a few miles of the city center. Mostly on the affluent west side of the city. I bought my first home in the Tarrytown neighborhood for the princely sum of $42,000. The current value on Zillow is just under $600,000. We moved from there into the Eanes School District in between the Westlake Hills and Rollingwood townships which exist just south of Lady Bird Lake and just west of the downtown area, opposite Zilker Park. We moved here a while back just for the schools which, at the time, had the best overall scores and reputations for academics in Texas. And then, starting in 2000 everything changed again. 

Austin's popularity went off the charts. And land and house prices rose to match the momentum. 

Here's what the local business journal says about the meteoric rise in property values in our neighborhood:

 2. West Lake Hills

• Typical home value, March 2022: $2,546,281
• One-year price increase: +48.0%
• Five-year price increase: +106.6%
• Price increase since Jan. 2000: +295.4%

1. Rollingwood

• Typical home value, March 2022: $2,717,518
• One-year price increase: +44.1%
• Five-year price increase: +104.1%
• Price increase since Jan. 2000: +285.0%

My house is in the Westlake Hills area while our swim club is in Rollingwood. These two neighborhoods have had the fastest property value growth in Texas. Together with Tarrytown they represent the areas in Austin with the highest per family net worth. Buying a house here 25 years ago has turned out to be like winning the lottery. 

But the flip side of it all is that we're a state with no income or corporate taxes so most of the revenue for....everything....comes from property taxes. We have some of the highest property tax rates around. When the appraised value of your house rises the amount subject to taxes rises in lockstep. 

Because there are rich and poor school districts all around Texas the federal government implemented what has become known as "The Robin Hood Law" to even out per student investment in Texas.  Wealthier school district have to send percentage of what they collect in local taxes to the state to help fund the poorer school districts. Last year the Eanes School District sent over 100 million dollars to the state. These funds were paid by the local tax payers and then redistributed to other areas. 

If you were, say, a middle class photographer living in the district you might have seen your property values skyrocket but if your business income didn't also skyrocket in the same time frame you are now on the hook for lots and lots more property taxes and few other benefits. You could, of course, sell your property and benefit from the appreciation but then you would have to find some place else, more affordable, in Austin to move. Good luck with that. One might suggest moving out of central Texas but ..... really?

This also means that more and more middle class people are finding all of Austin unaffordable vis-a-vis housing costs and they are exiting day-by-day. At some point the property values will rise so high that Austin will have driven out all the people who don't make prodigious incomes which means that restaurant workers, grocery store workers, domestic workers, and a host of other median income workers (including many working photographers) will be forced to look for somewhere else to live and this will take away a whole huge layer of the workforce that currently supports the lifestyles for the higher income families. San Antonio is the current recipient of our "worker exodus" but costs are rising there too.

Example: We currently can't source enough lifeguards in the city of Austin to open most of the public city pools for the hot Summer months. And that's amazing to me because the city is offering prospective lifeguards about $20 per hour, a starting bonus of about $1250, and the pay package includes healthcare, paid vacations and even bus fare. And this is just one example of the ramifications of job constriction affecting life in the city. 

From my point of view as a working photographer there are a number of things that directly affect my business. I can no longer reliably source assistants. There are few people who can work as freelance assistants and piece together enough work to earn enough income to make the equation balance. Competition for assistants is strong. The current asking day rate for good assistants is between $500 and $800 a day. For still work. Higher for video. Same for talent. Same for hair and make-up people.

There is only one real photo lab left. The others succumbed to rising rents and employee costs. There are only one or two rental studios left and as recently as three years ago there were dozens. Parking is more expensive. And photographer's rates, along with most people's salaries, have not kept pace with inflation. Not in the least. 

It seems to be a problem without a solution. 

Markets tend to self-correct. I hope it's not too sudden a correction or a lot of people are going to get hurt. 

My solution is to keep pushing for increased fees for....everything. All the time.