CAPCOG Reports On The State Of The Region

On Dec. 9th, CAPCOG held its annual General Assembly meeting. The meeting brings together more than 100 elected officials, government practitioners, and stakeholders invested in the future of the Capital Area, and because of its timing near the end of the year, it presents an excellent opportunity to reflect on the State of the Region. This issue of Data Points makes an effort to summarize the key points in CAPCOG’s State of the Region presentation.

> Download the 2015 State of the Region Presentation.

Population

• 2015 saw the Capital Area continue to grow at a rapid pace, adding nearly 50,000 additional residents. In fact, between 2005 and 2015, the Capital Area added more than 548,000 residents, an increase of roughly 33 percent.

• Most of the population growth-taking place in the Capital Area is happening in Hays, Travis, and Williamson counties. Between 2005 and 2015, Hays, Travis, and Williamson counties grew by 52 percent, 32 percent, and 52 percent, respectively. Those three counties account for 89 percent of all population in the Capital Area. Travis County itself accounts for 56 percent of all residents.

• The key driver of population growth in the Capital Area is migration of people into the region. From 2010-2014, migration accounted for 68 percent of all population growth in the region. For context, migration only accounts for 40 percent of population growth in the U.S. overall.

• While in-migration from California tends to get the headlines—and depending on context, the complaints—the vast majority of in-migration into the Capital Area comes from other parts of Texas, with the Houston and Dallas areas leading the way. In 2014, net migration from California was roughly 2,900. Net migration from other parts of Texas exceeded 20,000.

• The Capital Area is also becoming more diverse. Between 2005 and 2015, the share of the population comprised by the white, non-Hispanic demographic fell from 58.9 percent to 54.3 percent. All other demographics grew, except for the black, non-Hispanic demographic, which fell slightly from 7.1 percent to 6.9 percent. Overall, the growth rate for the Hispanic population was 50.5 percent, while the non-Hispanic population grew at a rate of 29.1 percent.

Economy

• As of September 2015, the unemployment rate in the  Capital Area was 3.3 percent. This is about as low as possible, and this low unemployment rate may be part of the cause for so much in-migration to the region. As companies grow and create new jobs, they are being forced to look outside the region for available workers.

• Between 2005 and 2015, Travis County added about 158,000 jobs. Williamson and Hays counties added 55,000 and 20,000, respectively. While the absolute numbers show employment concentration remaining in Travis County, job growth rates in Williamson and Hays counties exceeded 40 percent over that period.  Austin’s former “bedroom” communities are increasingly offering employment opportunities as well.

• During the past 10 years, the sectors of the regional economy that have added the most jobs are “Professional, Scientific, and Technical Services” and “Food Services and Drinking Places.” The data support the commonly heard narrative that much of the region’s job growth is happening at the very high– and very low–end of the wage spectrum.

• One cause for concern in the region’s thriving economy is that since 2005, the  Capital Area has created more than 68,000 jobs that pay less than $25,000 per year, on average. As the cost of living in Central Texas continues to rise, it is increasingly difficult to view these jobs as ones that pay a “livable” wage.

Education and Workforce

• Educational attainment in the Capita Area remains highly correlated with both location and race/ethnicity. Generally, among whites that live west of IH-35 in Hays, Travis, and Williamson counties, educational attainment rates are high. Among minorities and those living anywhere else in the region, educational attainment—and hence high-skill employment opportunity, remains low.

• If the current educational attainment rates for each racial/ethnic demographic remain constant, and we adopt the Texas State Data Center’s population projections, by 2050, the Capital Area will have nearly 1 million workers with an educational attainment of a high school diploma or less.

• Currently, about one-third of the jobs in the Austin MSA require a credential of some kind—a certificate or post-secondary degree—as a qualification for being hired. The other two-thirds require either prior experience or provide on the job training. In an economy where wage returns are much higher for credentialed workers, some of the inequality that exists in the region may indeed be a function of the types jobs available in the Austin area.

• The Capital Area awarded roughly 12,000 vocational certificates and Associate’s degrees in 2014. Continuing to see these numbers grow must be an important part of the region’s workforce development strategy.

Living in the Capital Area

• Despite robust economic growth, poverty remains a serious challenge in the Capital Area. About 285,000 residents had incomes that fell below the poverty line in 2014. In some census tracts in the region, the poverty rate exceeds 80 percent.

• As housing prices in Austin’s urban core rise, many lower-income households are moving to more suburban and rural areas in search of more affordable housing. While this pattern may improve housing costs, it often adds to the cost of transportation for households and pushes low-income households farther from many of the public services on which they rely.

• Rising housing costs have been hardest on area renters. Since 2005, the median rent in the Austin MSA has increased by more than 40 percent. Median household incomes have only risen by a little more than 25 percent.

• About 47 percent of the Capital Area’s workers cross a county line on their commute to and from work. About 76 percent of workers commute to work by driving alone. Rapid population growth, long commutes from suburban communities to Austin’s core and entrenched “drive alone” commuting behaviors are resulting in ever increasing congestion. In the 2013/2014 TxDOT fiscal year, Capital Area residents drove more than 38 million miles daily.

Summarizing the State of the Region

By many measures, 2015 was another banner year for the Capital Area. Many of the readers of this newsletter deserve to take some measure of credit for that. The region is attracting huge numbers of highly skilled workers to move here. Firms are growing and jobs are being created. The unemployment rate is at a staggering 3.3 percent. However, the continued growth in the region has exacerbated long-standing issues and has created new challenges in the Capital Area. Inequity in educational outcomes limits the opportunity for everyone to benefit from the region’s growing economy. Rising housing costs are displacing many residents in Austin and parts of Hays and Williamson counties, forcing them to move to more suburban and rural locations. This has the effect of isolating them from employment opportunities and from the public services many low-income households depend upon. CAPCOG will continue to work to support Capital Area communities to promote growth that also addresses these challenges. We look forward to partnering with you in that effort in 2016.

Data Points

Data Points is an every-other-month, CAPCOG newsletter that addresses the capital area’s economy. It offers analysis, forecasts and essential metrics in employment, growth, building permits, retail sales and other economic indicators.