Two years after its successful launch in 2009 as WhaleShark Media, the company now known as RetailMeNot Inc. needed more office space for its growing workforce.
With Central Texas just emerging from the recession, no one would’ve batted an eye if it had moved to cheaper facilities in the suburbs. Instead, it chose to move less than a half mile north, across Lady Byrd Lake and into the heart of downtown Austin.
“We realized the heartbeat of our company, the technologists we go out and hire … want to be in a location where they have access to amenities of all different types,” said company spokesman Brian Hoyt.
That attraction and the subsequent downtown expansion of RetailMeNot and a host of other companies helped spark a surge of downtown Austin job growth from 2007 to 2010 — one that was rare amongst U.S. metro areas, according to a new report from the Brookings Institution’s Metropolitan Policy Program.
Austin was one of just four metro areas nationwide to add jobs in their urban centers during that time, Brookings found. And of those regions that posted centralized employment growth – Charleston, S.C., Cincinnati and New Orleans were the other three – Austin was the only one to add jobs across the entire metro area, the report said.
“During the period of the recession, (Austin) saw continued modest job growth in the outer ring,” said Elizabeth Kneebone, a Brookings fellow and author of the report. “But the urban core saw almost 6 percent job uptick.”
Excluding most state government jobs, which tend to inflate urban density ratios for capital cities, Austin still had 24.3 percent of its jobs located within 3 miles of the central business district in 2010, Kneebone said. The national average was 22.9 percent.
However, the urban job growth of the latter part of the 2000s did not completely offset the a broader trend of job decentralization both in Austin and across the country, Kneebone said. From 2000 to 2010, jobs became increasingly dispersed in virtually every U.S. metro area.
Over that decade, the share of Austin jobs located downtown dropped 2.7 percent, while the share of jobs located 10 to 35 miles from the central business district jumped 7.9 percent, according to the Brookings data. The region’s rapid growth, not to mention the expansion of Dell Inc. and Samsung during that time, helped fuel the suburban employment growth.
In most U.S. cities, Kneebone said, the recession merely stalled the decentralization trend because it walloped occupations more often located in suburban areas, such as retail and construction jobs.
Austin was rare in its ability to grow at the core and through the surrounding areas. But like other U.S. metro areas, it will likely see more decentralization as the recovery continues, Kneebone said.
“The challenges come when it’s spread out in low density at the metro fringe, which makes it much harder to serve by transit to connect people with where the jobs are growing,” she said.
Lower job density can have ripple effects across the economy, such as increasing traffic and making it harder for low-income workers to access job opportunities in far-flung places, she said.
Yet in Austin, local developers noted, increasing density in a single central business district presents its own challenges.
“Increasing job density … in the urban core may help low-wage workers already scraping by to live in Central Austin, but it won’t solve anything for low-wage workers living in more affordable communities in the suburbs,” said Brian Kelsey, principal at Civic Economics, an Austin economic consulting firm.
Nor will a single center of urban job density alleviate Austin’s rising traffic congestion, said Terry Mitchell, president of Momark Development. The vast majority of those who work downtown – as many as 90 percent or more – commute in from the suburbs, Mitchell said.
“Downtown is good, but if you’re going to have a lot of jobs there you have to have a reasonable supply of housing in the urban core,” he said. “By the same token, putting jobs out where people live allows them to get to work without clogging the corridors into the city.”
In fact, long-term development plans charted out by the city of Austin encourage the creation of multiple, centralized job centers — for example, the rapidly growing northwest corridor along U.S. 183. (While Brookings noted multiple central business districts in many U.S. metro areas, it noted only the downtown area in Austin.)
“The best way to encourage more mixed-use density is linking those things up — think about land use, economic development and housing planning along with transit,” said Kneebone, author of the Brookings report. “Because they’re all connected, there needs to be a cohesive version of how to approach those on a regional level.”