Forthcoming Apple campus in Northwest Austin raises concerns about housing supply

Apple announced Dec. 13 it will build a second Austin campus at Robinson Ranch.

Apple announced Dec. 13 it will build a second Austin campus at Robinson Ranch.

Apple's Dec. 13 announcement it will open a second campus at Robinson Ranch in Northwest Austin and hire as many as 15,000 employees to work there raises questions about whether the city’s infrastructure—including its housing supply—is prepared.

While demand continues to outpace supply in Austin’s real estate market, Austin Board of Realtors President Steve Crorey said the Northwest Austin area is “primed” for the arrival of the new Apple campus and better positioned to absorb thousands of new employees than downtown, for example.

Concerns remain, however.

“If we don’t get serious about our infrastructure, our traffic, putting [more diverse] product on the ground for everyone, we’re going to lose businesses like this,” Crorey said, adding that Apple’s second campus presents an opportunity for city leaders to address these issues in a meaningful way.

Effect on the housing market


Austin’s surrounding communities are likely to see a spillover of new Apple employees buying households or filling rental properties, according to several local Realtors.

“Austin proper does not have a ton of land left to develop new homes,” said Cindi Bell, president-elect for the Williamson County Association of Realtors.

Per Bell, communities such as Round Rock, Pflugerville and Hutto will be hubs to keep an eye on because of their connectivity to the Robinson Ranch area via SH 45. New development is also likely hit Leander and Liberty Hill, and possibly as far north as Jarrell, if the I-35 corridor becomes an attractive option for incoming Apple employees.

Essentially Williamson County has far more room to continue developing communities and rooftops than Austin, Realty Texas Realtor Suzanne Gantner said. Affordability and availability themselves may drive more incoming residents to Austin’s suburbs out of sheer necessity.

“If you’re wanting to buy something in the Austin area the affordability right now is just crazy. First-time homebuyers … in that area are looking at $400,000 or more,” Gantner said. “You come out to Williamson [County] you can get twice [the size] for about $250,000.”

So what does that do for property values in Austin’s surrounding suburbs? Per the Austin Board of Realtors’ latest report, median prices for all homes in Round Rock have risen 7.3 percent year-over-year, more than Austin’s increase of 4.1 percent. Pflugerville and Leander have seen median prices climb by 3.4 percent and 5.4 percent, respectively.

Bell expects the neighborhoods surrounding the new Apple campus site—such as Avery Ranch or Brushy Creek—to quickly become attractive “flipping” properties.

However, new home construction helps offset increasingly climbing property values by creating more balance in the market, per Bell.

“You just need more rooftops. It can’t just be done by resale—and Williamson County has the land,” Bell said.

But the Austin-Round Rock metropolitan statistical area has a low inventory of homes available at any given point. The area collectively has 2.9 months of inventory as of October. In Round Rock alone that number dips to 1.9 months of inventory, according to ABoR data.

Gantner said 6 months of inventory, or the amount of time all homes on the market would last should no more be added, is considered a healthy, normal amount.

That means if new households are to help suppress inflating home values, more rooftops need to be delivered before the next possible influx of homebuyers in Williamson County.

Company concerns


Scott Turner, owner of Riverside Homes and chairman of the Infill Builders Council at the Home Builders Association of Greater Austin, said while new jobs are good for the local economy they may add additional strain to a housing market already struggling to meet demand.

“Companies have to factor this into their plans,” Turner said.

Apple has not announced any plans to subsidize housing for its Austin employees, as other technology companies such as Oracle have done.

“From a homebuilding standpoint this [announcement] really illustrates the need for land-use reform,” Turner said. “Until we are able to build more types of housing everywhere in Austin at every price point, the next time a company like Apples tries to expand they will have to think twice because they won’t have anywhere to house their workforce.”

Past examples


Other cities provide examples of the impact such an arrival can have on the local real estate market.

Following the announcement Apple would open a new campus in Cupertino, California, Realtor.com analyzed its impact on area home sales.

Just before the Apple Park campus opened in April 2017, median home prices in Cupertino rose 54.7 percent, to $1,535,000, according to its analysis.

Since then, median home prices within one mile of the new campus have jumped another 31.6 percent, up to $2,020,000, per Realtor.com.

In Seattle the growth of Amazon’s workforce locally has corresponded with rising home prices. The Seattle Times reported in November since 2010, when the tech giant began adding tens of thousands of new jobs to the local economy, home prices in the city have increased 80 percent, and rents have increased 69 percent.
By


MOST RECENT

In a Nov. 13 letter to Pflugerville City Council, the Pflugerville Fire Department said it might have to discontinue emergency ambulance services and advanced life support if additional funding is not made available. (Community Impact Staff)
Pflugerville residents push for EMS services amid new emergency district overlay discussions

"To allow citizens to vote on the current topic is to allow them to have a say in how their tax dollars are spent and how their loved ones are cared for," resident Blake Brown said Nov. 24.

The mayor pro tem acts as mayor when the mayor is absent from a meeting. (Community Impact Staff)
Omar Peña to continue as Pflugerville City Council's mayor pro tem

Omar Peña has served as mayor pro tem since 2015, with the position filled each year as new council members join.

Round Rock City Council approved a resolution for the Oakmond Drive extension. (Courtesy Round Rock City Council and Google Earth)
Gattis School Road, N. Mays Street approved for improvements by Round Rock City Council

City Council approved the enactment of eminent domain to acquire property on Gattis School Road to create the Oakmont Drive extension that will run parallel to the road.

Melissa Neel has 23 years of experience in finance and project management work in public, private and nonprofit sectors, according to a Nov. 24 city news release. (Courtesy city of Pflugerville)
Pflugerville selects Melissa Neel as new finance director

Melissa Neel has 23 years of experience in finance and project management work in public, private and nonprofit sectors, according to a Nov. 24 city news release.

Pflugerville City Council approved on first reading an annexation request for 160 acres of land for uses that include the operations of Republic National Distributing Company, a wines and spirits distributor. (Kelsey Thompson/Community Impact Newspaper)
160-acre annexation, including future wine distribution site, moves ahead in Pflugerville

Pflugerville City Council approved on first reading an annexation request for 160 acres of land for uses that include the operations of Republic National Distributing Company, a wines and spirits distributor.

Of the total cases reported to date, 11,304 are estimated to have recovered, and there are an estimated 806 active cases in Williamson County as of Nov. 24. (Community Impact Staff)
Williamson County reports 337 new cases of coronavirus Nov. 24

Of the total cases reported to date, 11,304 are estimated to have recovered, and there are an estimated 806 active cases in Williamson County as of Nov. 24.

Local health leaders are urging caution ahead of Thanksgiving. (Courtesy Adobe Stock)
Ahead of Thanksgiving, Travis County health officials urge caution

Austin Public Health leaders say gatherings with people outside one's household held indoors and without masks pose the greatest risk.

There have been 80 closed sales on townhouses in the year to date for the three-city market area, per the Austin Board of Realtors' analysis. (Courtesy Adobe Stock)
October townhouse sales jump 150% in Round Rock, Pflugerville, Hutto

There have been 80 closed sales on townhouses in the year to date for the three-city market area, per the Austin Board of Realtors' analysis.

Harini Logan, 10, won the 66th annual Express-News Spelling Bee at the University of Texas at San Antonio downtown campus on March 17, 2019. For 2021, the event is slated to be held in March at the Brauntex Performing Arts Theatre in New Braunfels. (Photo by Jerry Lara, courtesy the San Antonio Express News)
New Braunfels to host regional spelling bee and more Central Texas news

Read the latest business and community news from Central Texas.

The Commissioners Court approved funding for the program Nov. 24. (Taylor Girtman/Community Impact Newspaper)
Williamson County funds COVID-19 convalescent plasma program

Some 252 Williamson County patients have received the therapy of the 1,300 total patients.

Beginning Nov. 30, the city of Pflugerville will kick off improvements on Sweetwood Song Drive, Laurelleaf Drive and Gazania Drive. (Courtesy city of Pflugerville)
Pflugerville road work on Sweetwood Song Drive, Larelleaf Drive to begin Nov. 30

Beginning Nov. 30, the city of Pflugerville will kick off improvements on Sweetwood Song Drive, Laurelleaf Drive and Gazania Drive.

Texas Gov. Greg Abbott announced a COVID-19 vaccine distribution plan for the state Nov. 23 for a vaccine he said could be available as soon as December. (Courtesy Adobe Stock)
Texas Gov. Greg Abbott announces COVID-19 vaccine distribution plan

The vaccine could start being distributed "as early as next month," according to a Nov. 23 news release.