Panelists eye affordability pains in music, EMS, hospitality sectors

Leaders from two of Austin’s most prominent economic sectors – housing and hospitality – see passage of a new Land Development Code and eliminating the tipped minimum wage for restaurant staff as two long-needed steps to address increasing affordability concerns across the city.

Last week, the LBJ Presidential Library’s Future Forum panel discussion looked at the question “Who Is Austin For?” in considering how housing costs and other factors related to surging growth are affecting residents in different economic classes. The event took place shortly after the news that Austin had dropped from near the top down to the No. 40 spot on U.S. News & World Report’s list of the best cities to live, with the housing crisis listed as one of the reasons for the fall.

Nora Linares-Moeller, executive director of HousingWorks Austin, said residents are increasingly becoming house burdened – spending more than 30 percent of their income on housing – because city housing policy doesn’t allow for the creation of enough housing at affordable and working-class levels.

“The people that are the poorest need to have housing at what we call the 30 percent median family income level, and that’s hard to produce because it takes more money to subsidize it. When you build affordable housing as rental units it needs to stay affordable for 40 years, which means you need the money in subsidies to keep that apartment at that level for 40 years,” she said. “We really do have to depend on market-rate developers who have a mission and are OK with building affordable housing. Generally, they do that with some kind of density bonus program, some advantage that they get so that they can build higher or build more units.”

Linares-Moeller said the passage of a new building code, which has mostly stalled since 2018, would bring on a raft of needed new policy to address housing needs. She also acknowledged the makeup of the current City Council appears to favor more progressive housing policies, and noted that over the past year the local housing supply has started to grow at a higher rate than in years past.

While restaurants have become an attractive investment option for hospitality groups that can manage the real estate side effectively, Adam Orman, co-founder of Good Work Austin, said wages for workers haven’t kept up with Austin’s population growth and reputation as a dining destination.

“We haven’t done the things here over the last two or three decades to make sure that the growth is sustainable … to make sure that we’re supporting locally owned businesses and keeping money in Austin and creating a more circular economy,” he said, noting that the average hourly wage including tips for waiters and waitresses is $11 an hour. “There’s inequity built on inequity in how tipped workers make an average of $11 an hour. We know there are a lot of folks at steakhouses downtown that are making $40, $50, $60 an hour, but that is not everybody and you cannot live in Austin on $11 an hour with no paid sick leave and no health care.”

The affordability crisis has become so acute for local emergency services workers that Selena Xie, president of the Austin EMS Association, said 70 percent of medics working in the city don’t live in Austin, traveling from cheaper homes in Georgetown and Killeen to the north and San Antonio to the south.

“We used to have a ton of people from out of state apply to work for us and that’s happening less and less. It used to be about 80 percent out-of-staters that would come work for us up until two years ago, but over the last three cycles, more and more are homegrown coming from Austin,” she said. “Which is great, but a lot of them are very young because they’re living with their parents and just got their EMT license.”

The affordability pressures have been a consistent pain point for musicians and creatives in Austin, with the recent music census showing more of the city’s live musicians facing difficulties paying their rent or mortgage even when working a traditional job on top of their music career.

Peter Schwarz, co-founder of Sound Music Cities, which conducted the census, said the rising costs have fueled an exodus of local musicians to the suburbs.

“Some of the strategies that they’re using to adjust to this rapid increase in housing costs is just to move out of town, further out of town,” he said. “We’re seeing ZIP codes that are much further out of town than we would have suggested even 10 years ago for our network. We asked them what was their probability that they would continue their music career and 84 percent said, ‘I’m definitely going to be staying in music.’ They’re very passionate and committed to continuing their work. And then the same question, ‘Are you going to stay in Austin?’ And that dropped to 64 percent who were committed to staying. So we’re definitely seeing that these are short-term strategies to try to stay in Austin, but we can’t really bank on them over the long term.”

Photo by Larry D. Moore, CC BY-SA 4.0, via Wikimedia Commons.

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