Report: Austin's pandemic rebound continues downtown with growth in population, development, business

Despite a dip in downtown visits and hotel stays due to COVID-19, those numbers are trending upward, and the hospitality sector is pushing ahead on expansion for future tourism growth. More than 1,000 new hotel rooms are expected to be added downtown over the next few years, adding to the more than 13,000 now on the ground.

Business and development

Day-to-day business activity also continues to surge, according to the new report. After experiencing a downturn through the past two-plus years, both employment and development are recovering. And while statistics such as daily foot traffic and active office space use remain below pre-pandemic levels, those metrics are rising as well.

Austin's college-educated workforce downtown has grown by nearly 270,000 in the past decade, and major employers continue to draw new talent to the area—and require new facilities for them. Commercial construction downtown remains on a steady uptick with more than 2.16 million square feet of new construction underway, building on an estimated 19.52 million square feet of existing office space as of late 2021.

On the residential side, even more housing is on the way with an estimated 5,968 apartments and 1,595 condominiums now either under construction or in planning as the area attracts more full-time residents. Downtown is already dotted with nearly 5,900 multifamily spaces and 4,300 condos.

"The demand to live or work downtown has pushed the size and scale of real estate developments to new heights," the report stated.

"People live, work and entertain themselves all within a half-mile of where they live. Which is a trend, honestly, most cities would like to be seeing," Peart said in an April interview.

Downtown's storefronts took a big hit as a result of COVID-19, although recovery in that space is also underway. Amid downturns in COVID-19 cases and increased vaccination rates, the organization tracked 60 total new storefronts that have opened downtown as of February. Those additions include 29 new eateries, 19 bar or entertainment venues, and 12 retail spaces.

Those gains come after the alliance confirmed the closures of nearly 90 retail spaces and identified dozens more vacancies last year, with between 20%-25% of all storefronts there closing from 2020 into early 2021.

Looking ahead

While it still experiences fallout from the pandemic, the alliance's report outlines a Central Business District that is poised to grow for years to come. With its development and population boom well underway, Peart said planning for infrastructure and an influx of new residents must also be a priority for stakeholders.

"As the region flourishes, the demand for transportation connections and well-maintained park space continue to grow. Major infrastructure investments such as Austin Transit Partnership’s Project Connect will link downtown to the rest of the city. ... Also, the official funding of the $4.9 billion Capital Express Project will offer us a once-in-a-lifetime opportunity to lower the central-city highway and connect our city like never before," Peart wrote. "These and other initiatives will transform downtown for generations to come."

Peart previously told Community Impact Newspaper that the current pace of new development will "conservatively" double downtown's skyline, population and hotel room count in the next decade. Alongside that comes a need for a doubling of infrastructure, including Project Connect and a redesign of I-35, and considerations for retaining longtime residents and workers who may be priced out—which transit systems, local amenities and public safety could play into.

Peart also said he believes Austin is well-positioned to withstand possible recession conditions in the immediate future while growth continues, although downtown's prospects amid any more significant and longer-term downturn remains uncertain.

"The advantage that we have is we continue to have tech companies moving here. We have tremendous university systems that are churning out really great talent. I think the answer to workforce shortages globally is more technology. And so I think Austin is positioned that way," Peart said. "What would concern me a little bit more is you’re beginning to hear economists talk about a depression in 2030. So if I were a betting person, that’s where my focus would be, would be the year 2030 and beyond. ... The cycle that we’re in, what we see in the pipeline, easily continues for the next eight years.”