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Austin cheers Tesla's headquarters move, but local home buyers left on edge

[October 11, 2021] By Tina Bellon

AUSTIN, Texas (Reuters) - Austin prides itself on "keeping it weird," but the city's success at luring more big companies such as Tesla Inc has some residents wary of getting priced out of their unique culture.

Tesla's CEO, Elon Musk, said on Thursday the electric car maker will move its headquarters https://www.reuters.com/business/autos-transportation/tesla-moving-headquarters-austin-texas-says-ceo-musk-2021-10-07 from Palo Alto, California, to Austin, Texas.

Housing prices in the Austin metro area have skyrocketed in recent years, with large tech firms including Apple Inc, Alphabet Inc's Google and Oracle Corp building new campuses in and around the city.

"I'm really happy for all the jobs this will create, but my family is already unable to buy a house right now, and it will only get worse with Tesla," Trish Webb, 47, a resident of South Austin, said on Friday while on her lunch break from her job as a hospital administrative assistant.

Median prices for Austin houses have risen some 40% over the last two years, with the median price for a house around $549,000 in September, according to real estate brokerage Redfin.

Frequent reports of out-of-state buyers, particularly Californians, purchasing houses in cash at double the asking price have frustrated many Austinites. Over the summer, nearly three in every four houses sold in the city went for above the asking price, Redfin data showed.

Even before Musk's relocation announcement, the electric vehicle maker planned to bring some 10,000 workers to an imposing new factory east of the city center. It is unclear how many corporate workers Tesla will relocate from California, or hire in Texas.

"All these Californians coming here is also changing the culture, and I'm worried it will become too much," said Reed Chorry, 26, who moved to Austin from Houston several years ago and works in sales.

The city's unofficial motto - "Keep Austin Weird" - has given rise to a quirky, bohemian cultural scene that has turned local music festivals like Austin City Limits and South by Southwest into national attractions.

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The sales office of property developer Roberts Communities is seen in the Oak Ranch neighborhood near the new Tesla factory near Austin, Texas, U.S. October 8, 2021. REUTERS/Tina Bellon

"It will be hard to keep that up when Austin becomes bigger and bigger," said Ryan Baker, 32, who works at a restaurant in East Austin.

Austin Mayor Steve Adler welcomed Tesla's decision and said the company fits right in with Austin's strong innovative, entrepreneurial and environmentally focused culture. His office did not respond to questions about housing affordability.

Austin's rapid growth is also expected to exacerbate the city's congestion problems, with three out of four residents driving to work alone in their car.

While Austin is working to improve its public transit network, Tesla's factory is located in a transit desert.

The city may evaluate transit options to the plant, but it expects most of Tesla's workers to drive to the plant, Austin Transportation Director Rob Spillar said. Austin hopes an increase in housing, stores and medical clinics will attract workers to live close to the plant, Spillar said.

Roberts Communities, a developer for affordable manufactured housing, is hoping to benefit. The company has bought large plots of land just minutes from the Tesla factory and sells houses at around $80,000.

Tesla factory workers will receive an average annual salary of $47,000, an income considered low by Travis County's health and human services division.

"All those workers will want to live somewhere nice, clean and affordable with their families," said Brandon Long, a Roberts Communities sales manager at the local Oak Ranch site.

(Reporting by Tina Bellon in Austin, Texas; Editing by Joe White and Matthew Lewis)

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