Brian Kelsey's presentation at the CCIM Symposium on January 30, 2013.

1. Austin, TX: An Economic Prospectus
CCIM Symposium
Growing Pains of Austin
January 30, 2013

2. Why Choose Austin?
• Unique combination of big city growth rates
and feel of small, “weird” university town
• Diversified economy powered by
innovation, productivity, and well-developed
ecosystem for supporting entrepreneurship
• Region offers great variety in quality of life at
relatively affordable prices
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

3. Population Growth
Source: U.S. Bureau of Economic Analysis
8%
Austin-Round Rock-San Marcos
7%
6%
5%
4%
3%
2%
1%
0% All U.S. Metro Areas
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

5. Fastest Growing Metro Areas
Source: U.S. Census Bureau, Population Change, 2001-2011
Houston 1,245,826
Dallas 1,194,282
Atlanta 972,701
Riverside 927,632
Phoenix 899,500
Washington 776,054
Miami 559,345
New York 539,136
Despite being only the 34th largest
Las Vegas 509,475 metropolitan area, Austin ranks 10th in
Austin 462,203 population growth since 2001.
Orlando 461,001
Austin is adding an average of 50,000
San Antonio 446,804 people every year since the recession
Los Angeles 433,310 hit in 2007—roughly equivalent to a
Charlotte 421,097 Cedar Park . . . every year.
Seattle 407,099
0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

6. Austin: Movers Driving Growth
Source: Internal Revenue Service, 2000-2010 (MSAs only)
Top 10 Origin Metros
(Avg Movers Per Year)
1. Houston (6,700)
2. Dallas (6,000)
3. San Antonio (4,700)
4. Killeen (2,100)
5. Los Angeles (1,800)
6. Corpus Christi (1,100)
7. Chicago (1,000)
8. Phoenix (900)
9. New York (900)
10.San Francisco (800)
Blue: Move to Austin > Move from Austin
Pink: Move to Austin < Move from Austin
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

7. Popular Neighborhoods
Source: U.S. Census Bureau, People Moving to Travis & Williamson Counties from Out of State, 2007-2011
Census Out-of- % Tract
Tract General Area Staters Population
17.6 Steiner Ranch 1,113 8%
6.01 UT Campus 1,030 11%
17.86 Milwood/Arrowwood 856 17%
215.07 Indian Ridge/Eagle Ridge 785 10%
203.14 2243/183 Leander 754 15%
18.49 North Burnet/Domain 708 13%
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

8. Job Growth: Total Employment
Source: U.S. Bureau of Economic Analysis
12% Austin-Round Rock-San Marcos
10%
8%
6%
4%
2%
0%
-2% All U.S. Metro Areas
-4%
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

9. Economic Growth: GDP
Source: U.S. Bureau of Economic Analysis
Austin’s growing economy:
Metro Area Real GDP Real GDP
$26.6 billion increase in GDP
GDP ≥ $50B 2001-10 2007-10 between 2001 and 2010, a 48%
growth rate second only to
Portland 49% 6% Portland among large metros.
Austin 48% 10% $7.5 billion+ increase in GDP
since recession hit in 2007, a
10% growth rate behind only San
San Jose 43% 13% Jose among large metros.
Raleigh 33% 5% GDP Per Capita, a proxy used for
standard of living, has increased
from 97% of U.S. to 104% of U.S.
Orlando 31% -4%
Washington 30% 6%
Las Vegas 26% -13%
Phoenix 25% -7%
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

10. Skilled Workforce Availability
Source: U.S. Bureau of Economic Analysis, Austin MSA as % of All U.S. Metro Areas (100%)
105%
Paychecks
(average earnings per worker)
100%
95%
90% Productivity in Austin grew nearly twice as
fast as productivity in all U.S. metropolitan
areas between 2001 and 2010.
Productivity
85% (output per worker)
80%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

11. Manufacturing Renaissance
Source: U.S. Bureau of Economic Analysis, Output Per Worker (2005 dollars)
$350,000
Manufacturing (output) in Austin is growing more
than four times faster than the Austin economy as a
$300,000 whole. It now makes up approximately 20% of the
total metro area economy, up from only 9% in 2001.
$250,000
$200,000
Austin-Round Rock-San Marcos
$150,000
$100,000
All U.S. Metro Areas
$50,000
$0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

12. Austin: Diversifying Economy
Source: U.S. Bureau of Economic Analysis
Jobs Rank GDP Rank
2001 2011 2001 2010
Government 1 1 1 2
Retail 2 3 6 7
Manufacturing 3 11 4 1
Prof, Sci, Tech Services 4 2 N/A 4
Health Care, Social Asst 5 4 N/A 9
Finance, Insurance 10 7 7 8
Real Estate 12 10 3 5
Note: Rank based on share of total jobs, GDP.
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

13. Innovation & Entrepreneurship
• Corporate anchors
• Infrastructure
• Networks
• Connectors
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

14. Wealth Creation
Sources, U.S. Census Bureau, Texas Comptroller
• Number of households with at least $200K in
annual income has doubled since 2000, up to
16,000 as of 2010 in city of Austin
• Inflation-adjusted retail sales in Austin metro
area grew by 27% between 2002 and 2011,
compared to 22% statewide, 1% Dallas
• Technology sectors (mobile, cloud, analytics)
well-positioned for VC investment
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

15. Housing Affordability
Source: Zillow, Median List Price, November 2012
Price Per Most Expensive Price Per
City Sq. Ft. Neighborhood Sq. Ft.
San Francisco $635 Presidio Heights $984
Washington $417 Kalorama $757
Seattle $286 Downtown $715
Denver $210 Country Club $363
Portland $191 Pearl District $350
Austin $141 Downtown $387
Raleigh $107 Wade $218
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

16. Key Questions
• Can Austin maintain its cost advantage given
the region’s current growth trajectory?
• Will we make the necessary investments in
public services, infrastructure (water), and
amenities to keep up with growth?
• Is it possible to make the region’s economic
development more inclusive?
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

17. Middle Income Stagnation
Source: U.S. Bureau of Economic Analysis, Austin MSA as % of All U.S. Metro Areas (100%)
110%
105%
100%
95%
90%
Per capita income
85%
80%
75%
Average earnings per job
70%
1975
1983
1969
1971
1973
1977
1979
1981
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

18. 71% of Austin metro area’s population growth
between 2000 and 2010 occurred in suburban
areas, up from 53% between 1990 and 2000.

19. Source: Center for Neighborhood Technology http://htaindex.cnt.org
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

20. Human Capital Investment
Source: U.S. Bureau of Labor Statistics
• 37% (7.5M) of all new jobs in U.S. expected by
2020 will require postsecondary degree
• 16 out of top 25 fastest growing occupations
in U.S. will require postsecondary degree
• 91 out of top 100 highest paying occupations
in U.S. require postsecondary degree
Note: Postsecondary here means certificates, associate’s degrees, and up.
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

21. Human Capital ROI
Source: U.S. Bureau of Labor Statistics, Median Wage for U.S. Occupations by Education Required, 2010
Doctoral or professional degree $87,500
Bachelor's degree $63,430
Associate's degree $61,590
Master's degree $60,240
Postsecondary non-degree award $34,220
High school diploma or equivalent $34,180
Less than high school $20,070
$0 $20,000 $40,000 $60,000 $80,000 $100,000
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

22. Austin: The Challenge Ahead
Source: U.S. Census Bureau, % Population Age 25+ in Austin MSA with Postsecondary Degree, 2011
80%
73% % Total Population with
Postsecondary Degree
70%
Washington DC 54%
60% San Francisco 51%
Raleigh 50%
50% Austin 47%
50%
Seattle 46%
Denver 46%
40% Portland 42%
33%
30%
21%
20%
10%
0%
Asian White Black Hispanic
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

23. Summary
• Austin’s reign atop metro area rankings should
continue if we continue to think big, take
risks, and invest in economic competitiveness
• Growth pressures will test our commitment to
regional thinking—avoiding a zero-sum game
mentality will be a critical success factor
• Creating stronger links between education and
workforce development is a top priority
January 30, 2013 | CCIM Symposium: Growing Pains of Austin

24. Brian Kelsey, Principal
Civic Analytics LLC
brian@civicanalytics.com
512-731-7851
http://civicanalytics.com
@brianjkelsey
linkedin.com/in/brianjkelsey
January 30, 2013 | CCIM Symposium: Growing Pains of Austin