Email, David Stauch, president, Capital Project Management, July 12, 2017

3:21 p.m.

Comparing Austin and Dallas is comparing apples and oranges – unfortunately.  I’ve built in both cities, and have built in Austin since 1984.  Here is a long answer to a short question:

Fees:

Inspection fees are roughly comparable.

Review fees are about 3-4 times more in Austin.  This is likely owing to the greater number of departmental reviews required, and the greater level of scrutiny by each.  Perhaps a trade-off for quality of the built environment, but folks in Dallas like it just fine.

Parkland Dedication Fees are significant here, and non-existent in Dallas. Mathematically this is infinitely more expensive in Austin. Austin is a unique place - due in no small part to the parks, greenbelts, trails and the like that Austin supports.  Those amenities cost money.

Water and Wastewater fees are significantly higher in Austin.  No reasonable explanation for this – other than utility work here involves rock excavation / sawing and rarely does in Dallas.   The increased fees might also be due to Austin’s low density.   The more spread out a city is, the more infrastructure needed to serve the residents.  Austin’s density is about 3,357 people per square mile compared to Dallas’ density of about 3,876 people per square mile (In other words: Dallas is about 16% more dense than Austin).  

(Lack of) Density:

Limited in Austin by Capitol View corridors, height (compatibility, impervious coverage limitations and heritage trees – none of which are big competing factors in Dallas.  These limit developable land.  

Neighborhoods.  They currently wield disproportionate power, which is out of balance with a reasoned approach.  Austin is the poster-child for the NIMBY concept, which is a product of our governance system.  

By limiting development in areas where the market wants development to go, supply shortages occur, which drives up prices.

Construction Costs:

Material prices escalation has been nominal, creeping up predictably year over year.

Labor.  This is the toughest labor market I’ve seen in 30+ years.  We lost some great skilled people over the past 10 years due to the recession (folks looking for work elsewhere) and natural attrition.  The backfilling with younger talent hasn’t kept up; it’s harder to convince a young person with no designs on college to learn a trade.  The subcontractor trades make up 80-85% of the actual work on a site, and are stretched much too thin here.

Obviously, some of these factors are either environmental - or a longer-term fix.  City staff gets blamed for too much here; there are some really good professionals trying to do a good job.  The current development process conspires against the stated political goals of ‘affordable’ housing – which also means workforce housing, by limiting housing close to jobs.  This also has an immediate and obvious impact on traffic, by putting more people in the outlying areas, many of which have to use highways and arterials to get work.