Daily Briefing: 🏚️ Austin Says 'No' to Demolition! Plus, a 100-Acre Surprise 🏗️

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Here’s what you need to know about CenTex CRE Today:

1. Austin halts Rainey Street bungalow demolition, historic preservation prevails 🏚️

2. Endeavor's 100-acre Austin project marks a major industrial expansion 🏗️

3. Austin rethinks parking, pushes for transit-focused urban landscape 🚗➡️🚊

4. New Texas law curbs Austin's greenspace growth, parks face funding cuts 🌳💸

Urban Development and Real Estate

Endeavor plans big industrial project on 100 acres north of Austin

Source: Houston Strategies

Summary: Endeavor, an Austin-based developer, is planning a significant industrial project on 100 acres north of Austin, adding more space to an already booming market. As of the third quarter of 2023, there was 17 million square feet of industrial space under construction, in addition to the eight million square feet that have already been delivered this year.

Why this matters: This news provides an opportunity for commercial real estate professionals in Central Texas to capitalise on the growing demand for industrial space, by guiding their clients towards investments in these types of projects.

Austin blocks plan to demolish Rainey Street bungalow as bar empties out

Source: Austin Business Journal

Summary: A plan to demolish one of the remaining bungalow homes on Rainey Street in Austin, currently housing the closing Placeholder Tiki Bar, has been stalled by the Austin City Hall. The property owners' proposal, in the works for four years, to replace the 1887-built structure with a two-story brick building was not voted on by the Austin Historic Landmark Commission, effectively sending the owners back to the planning stage. The 75-day consideration period for the request ends in mid-November.

Why this matters: Understanding these kinds of local community and government responses to redevelopment proposals can aid professionals in anticipating potential challenges in their own commercial projects, thereby equipping them to develop comprehensive strategies that factor in preservation concerns.

City Infrastructure and Services

Austin parking requirements changed to encourage affordability, public transit

Source: Real Estate Center at Texas A&M University

Summary: City leaders in Austin have eradicated parking requirements for new constructions city-wide, aligning with the city's aim to become more transit-focused. The move comes as part of a plan to invest billions in a city-wide light rail project. Developers have long argued that parking requirements increase project and housing costs and have been a significant barrier to creating new housing options in the city. According to city staff research, construction costs for surface parking spaces range from $5,000 to $10,000 per space, while parking in a built structure can cost between $25,000 and $60,000 per space.

Why this matters: This shift in policy is not only relevant to commercial real estate professionals in Central Texas due to the potential for changes in project costs and design, but it also presents an opportunity to provide valuable insights to clients regarding the future of developments and the broader urban planning direction in Austin.

City of Pflugerville increases water utility rates by $20+ a month

Source: KXAN News

Summary: Residents in Pflugerville, Texas, will see their utility rate increase on their October water bills, with the average residential water customer noting a $23/month increase and wastewater customer a $22.50/month increase. This change comes as part of the city's efforts to support water and wastewater services and infrastructure, covering costs of delivering water, operations, maintenance, and improvement projects. Several water and wastewater projects are underway, with over $600 million invested in capital improvements.

Why this matters: The rise in utility rates in Pflugerville indicates an increased cost of living and operating businesses in the area, a factor that commercial real estate professionals should consider when advising clients on property investments and leasing decisions in the region.

Environmental and Public Space Policy

Austin might not see as many new greenspaces thanks to a new state law

Source: KUT.org

Summary: A new state law taking effect on January 1 will significantly impact the creation and improvement of parks in Austin, forcing the city to change its parkland dedication rules and the fees it charges developers. Currently, developers are required to dedicate a certain amount of parkland or pay a fee used for the acquisition and development of parks. With amendments to these rules, Austin stands to lose millions of dollars towards park maintenance and expansion. The changes largely apply to multi-family and hotel-motel developments, and the city expects a reduction of 40 to 70% in the current fees.

Why this matters: While the new law restricts developers' obligations towards parkland dedication, it also removes a potential selling point for properties, as many tenants and buyers value proximity to green spaces. Commercial real estate professionals can utilize this information to advocate for alternative approaches to maintaining green spaces or to inform clients about the changing landscape of parkland dedication in Austin.