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 Emma Freer
Emma Freer began covering Central Austin for Community Impact Newspaper in 2017. Her beat includes the Travis County Commissioners Court and local business news. She graduated from Columbia Journalism School in 2017.


MOST RECENT

Snow covers I-45 in Houston during a winter storm that hit Texas the night of Feb. 14. (Shawn Arrajj/Community Impact Newspaper)
Legislators probe energy officials over power failures, lack of preparation heading into winter storm

The Texas Legislature held hearings Feb. 25 with energy companies including Oncor Electric Delivery and the Electric Reliability Council of Texas in response to last week’s historic winter storm, which left millions of Texans without electricity for days.

As many as 31 stores across nine states will be shuttered as Fry's Electronics shuts down due to market changes and the pandemic. (Courtesy Qygen, Wikimedia Commons)
Fry's Electronics calls it quits after nearly 36 years in business

As many as 31 stores across nine states will be shuttered as Fry's Electronics shuts down due to market changes and the pandemic.

A lone runner jogs on a snow-covered road in Austin. Transportation projects across the city were briefly paused due to Winter Storm Uri. (Jack Flagler/Community Impact Newspaper)
ERCOT: Texas power system was less than 5 minutes from collapse during winter storm

ERCOT's CEO offered details into what led to the massive blackouts that left millions of Texans in the cold last week.

cars on snowy road
Texas Disaster Declaration opens door to federal aid for losses sustained during winter storms

Individuals and businesses who sustained losses during the winter storm are eligible for federal assistance, according to a Texas Disaster Declaration approved

ERCOT president and chief executive Bill Magness (left) was joined by the electric grid manager's senior director of system operations Dan Woodfin on Feb. 19 for a briefing on the company's emergency operations. (Screenshot via ERCOT livestream)
ERCOT chief: 'We are completely back to normal operations' as of Feb. 19

Officials with the Texas electric grid manager also said they are preparing for state and federal reviews of this week's power outages.

H-E-B stores across Texas have limited store hours and placed purchase limits on some high-demand products due to ongoing severe winter weather, H-E-B officials announced Feb. 19. (Courtesy H-E-B)
H-E-B, Central Market limit store hours, product purchases due to severe winter weather

H-E-B stores across Texas have limited store hours and placed purchase limits on some high-demand products due to ongoing severe winter weather, H-E-B officials announced Feb. 19.

Gov. Greg Abbott provided updates on the state's emergency response efforts during a Feb. 18 press conference. (Screenshot of April 17 press conference)
Gov. Greg Abbott: Power restored to nearly 2M homes in past day; statewide aid efforts continuing

While power generation has been restored to serve most Texas residents, Abbott said state agencies remain focused on water and food distribution Feb. 18.

Although tens of thousands of megawatts remain off the statewide power grid Feb. 17, Texas Gov. Greg Abbott said relief is on the way for many Texans within the next 24 hours. (Hannah Zedaker/Community Impact Newspaper)
Gov. Abbott: Power restoration on the way for 1M households in next 24 hours

Although tens of thousands of megawatts remain off the statewide power grid Feb. 17, Texas Gov. Greg Abbott said relief is on the way for many Texans within the next 24 hours.

Severe winter weather conditions led to outages throughout the Texas electric system this week. (Iain Oldman/Community Impact Newspaper)
'Something that you could have planned for': How isolated Texas power grid, winter weather left millions without electricity

As of Feb. 17, the Electric Reliability Council of Texas said it was still working to restore electric service to customers throughout the state.

An Austin Fire Department truck drives down Manor Road on Feb. 15. (Jack Flagler/Community Impact Newspaper)
Texans urged to use caution as carbon monoxide cases increase during power outages

Carbon monoxide poisoning calls have increased as people look for ways to stay warm without power and heat.

Many in Texas are battling power outages amid frigid temperatures. (Courtesy Rico Daniels)
Gov. Greg Abbott calls for investigation of ERCOT, Texas' electric reliability council

As of 1:20 p.m., over 4 million customers were out of power, according to ERCOT.

graph showing power demand out pacing grid capacity
Texas enters second day of blackouts

Although outages were initially intended to last for less than one hour, local grid operators are reporting longer outages.