Austin growing up

Arriving in Austin, Texas from Washington, DC is always a study in similarities and differences; both green and leafy. Each city has sturdy economic and population growth, and both are liberal cities; Austin not as much as DC, but is still “the blueberry in the red Texan sea”. Both Austin and DC have undergone significant gentrification in recent years. In DC this has very much become a racial issue, as traditional black neighborhoods are taken over by professionals, most of them white. In Austin this has become more of a discussion and transition of the city’s soul.

 

“Keep Austin Weird” is a slogan often seen & heard, aimed at keeping the spirit of yesteryear when the downtown area was dominated by live music scenes and dive bars. When I first visited Austin in 2005, it was a fairly quiet town with not much business to talk about. Twelve years later, with more than 2 million people in the metropolitan area, it is a tech hub with a booming downtown and a rising skyline mirrored by cranes scattered around the city. Oracle is completing a new HQ and Austin has submitted its application for Amazon’s new HQ2 with potentially adding 50,000 jobs to the already encroached atmosphere. Amazon’s presence can already be seen in Austin through the HQ of its newly acquired subsidiary, Wholefoods.

 

Real income per capita has increased from 111% of the national average in 2010 to 119% in 2014. House prices are up 60% since 2010 adding incentives for developers. But the transplanted affluent workers and hipsters graduating from college seem to be less interested in rowdy bars and live music and more focused on the growing foodie scene, mixologist´s cocktails and the close proximity to nature right outside their doors. The bars on Rainey Street are slowly diminishing, now surrounded by rising luxury residential blocks and high-end hotels, with new residents likely to push music curfews and limit drunken behavior.

 

So, Austin is going less weird and more generically American. It still is very much Texas with a “let´s get it done” attitude. It is also a great example of the private entrepreneurship and innovation that is the driving force in the US economy. And the local wine grown out in the Hill Country is actually pretty decent.

 

Houston back on its feet

Driving from Austin to Houston is a study in Texan life. Pickup trucks with bumper sticker promoting God and guns are more prominent than in DC, as are the lifted trucks and muscle cars. The roads are in pretty bad shape and at times are completely overwhelmed by the growth in population. The landscape transitions between green fields as far as the eye can see, to flat & desolate deserted dry land with a tumble weed or two, depending on the time of year. The sprinkles of barn houses, large ranch gate entrances, trailers, cottages and single-family homes are a good reminder that most of Texas is not taken up by city buildings, but wide-open spaces.

 

I expected to find visible signs of hurricane damage throughout the Houston area, but while there are isolated hard-hit areas particularly to the southeast of downtown and near some of the bayous, the surrounding area is surprisingly normal. Hence, economic activity has recovered in most places and traveling here, one might never know that a devastating hurricane just hit a couple months ago. Interestingly, the latest employment numbers show that while Florida lost 127,000 jobs in September (explaining the total US loss of 33.000), Texas only lost 7,300 jobs. That also underscores what a vast and diverse state Texas is.

 

I was quite encouraged by my visit to Texas and continue to see it as a leader in the US economy. The oil sector has managed to reduce cost significantly, and while focus remains on the shale industry, the increasing investments in deep-sea drilling in the Gulf of Mexico should not be overlooked as a contribution to conventional (long-term) oil projects.

 

The rebuilding after hurricane Harvey could be prolonged by the lack of migrant labor, and as much of the Texan economy is integrated with Mexico (health care services a good example), a termination of NAFTA could be felt more here than elsewhere.