Has Austin Lost Its Violet Crown?
Boom and Gloom in the “Silicon Hills”
From my perch in America’s 10th-largest—no wait, 11th-largest—yikes, 13th-largest city—the Wall Street Journal’s recent declaration that “Austin’s Reign as a Tech Hub Might Be Coming to an End” reads as another entry in a familiar genre: the Austin comedown story. Last year The Atlantic claimed Joe Rogan was remaking—or unmaking—the city; the year before, The New Yorker lamented that Silicon Valley was transforming it. Pouring water on a wet blanket, Austin peaked on the list of most populous cities in 2022, surpassing San Jose, only to be passed in 2023 by Jacksonville (yeesh). The latest Census data shows that Austin slipped two more places in 2024, eclipsed by San Jose and Fort Worth, which grew by 2.4% and crossed the million-Cowtowner mark. Over the same period, Austin only grew by 0.4%, failing to join the Two-Comma Club.
Has Austin lost it? Whatever “it” is—mojo, momentum, magnetism—the implication is clear: Austin is no longer ascendant.
The main claim of the WSJ article is that regional tech hubs like Austin are losing talent as tech workers return to the coastal megahubs. The WSJ cites SignalFire data showing Austin’s tech employment dropped 1.6% in 2024, while startup jobs fell 4.9%. LinkedIn data also shows fewer moves from SF and NY to Austin.
The resurgence of San Jose and population gains in San Francisco seem to support the argument. Of course, no one seriously believed Austin would replace Silicon Valley as the global center of tech. But Austin has established itself as an alternative tech hub going back decades now. The question today is whether the gravitational pull is strong enough to continue to attract talent, capital, and new ideas.
Real estate data reaffirms the gloom. Downtown towers built by Google and Facebook sit empty. Office vacancies are more than 20%, with another 2 million square feet under construction. A planned supertall tower was halved, then shelved. Once-hyped projects have been abandoned. Oracle announced a move to Nashville. Landlords struggle to fill apartments. Homes take longer to sell.
And Austin FC’s record is 5-7-5, as if the dampened mood has seeped onto the soccer pitch.
The reality, of course, is more complicated than the boom-and-bust narrative suggests. Austin and other Sunbelt cities were beneficiaries of the pandemic exodus, while the cities and states people exodussed from suffered. Pandemic-era losses in places like New York and San Francisco fueled talk of urban doom loops, but now cities everywhere are adjusting. Indeed, 95% of major cities logged population gains in the last year, even those that were declared “dead forever.”
As Richard Florida writes over at Vital City, this was to be expected. Cities are “indispensable and renewable hotbeds of innovation and economic dynamism” made possible by the “dense clustering of human talent.” Indeed, the population gains demonstrate the enduring appeal of human density.
For New York and San Francisco, that means recovery from a period in the doldrums, though it might be too soon to call it a comeback. Conversely, what’s actually happening in Austin is a slowdown after an extended boom, not a collapse. If anything, we’re seeing a reversion to the mean, with cities self-correcting across the board. While it may sting for Austin right now, this is good news for cities broadly.
Unfortunately, in celebrating the death of the doom loop narrative, Florida is a bit too quick to jump off the Sunbelt bandwagon. He writes that “Austin and Miami, once heralded as rising stars poised to challenge and displace leading tech hubs, have seen their luster fade somewhat.” He echoes the WSJ’s statistics about the decline of venture funding, tech employment, and people moving to Texas. In his view, New York and San Francisco remain the superstar cities, while Austin is merely a “prominent outpost of the high-tech galaxy” and Miami is only a “connected satellite” of Wall Street.
The moving statistics are an interesting tell: fewer people may be moving here from coastal cities, but the net flow is still toward Texas—not away.
While Florida is correct in noting that Austin and Miami enjoyed rapid, attention-grabbing growth during the pandemic, the notion that they are mere satellites of tarnished superstar hubs like San Francisco and New York misses the mark. Indeed, if Austin were merely a regional outpost of San Francisco, you’d expect to see their trajectories move in tandem. Instead, when San Francisco slumped, Austin kept growing, and Austin hasn’t stopped growing now that San Francisco is recovering. Even if they are economically linked, they aren’t synced satellites; they’re distinct cities shaped by their own institutions, politics, and economic bases.
Calling Austin an “outpost” would surprise locals more likely to say “Don’t San Francisco my Austin.”
Jason Scharf, host of the Austin Next podcast, pushes back on the “Austin is over” story. He sees cherry-picked stats, a lack of context, and a flattening narrative. As Scharf likes to say, “Austin isn’t the next Silicon Valley, it’s the first Austin”—it’s something broader and more distributed. In this government and college town, the tech sector represents roughly 16% of Austin’s jobs and extends beyond traditional software into applied fields like aerospace (e.g., Firefly), electric vehicles (e.g., Tesla), construction (e.g., ICON), even defense (classified!)—sectors that are technology-driven but not Silicon Valley-defined.
Moreover, Scharf argues that the press repeatedly gets the story wrong, fixating on high-profile figures and missing the bigger picture. He notes that, in just the few weeks since the WSJ article ran, Austin was ranked the 5th-best tech ecosystem globally per DealRoom, had the 5th-most VC funding in the U.S. per Carta, and was ranked 6th in the U.S. and 16th globally by StartupBlink.
If this is the end of Austin’s reign, who needs the crown?
Of course, such rankings don’t necessarily reflect long-term staying power, but they do challenge the popular narrative. Still, even if Austin’s tech momentum has cooled, many short-term indicators suggest that demand remains strong. Housing economist Jay Parsons reminds us that Austin ranks top 10 nationally for population growth, job growth, and apartment absorption—vital signs that it’s cooling from a high temperature, not freezing over.
The good news doesn’t stop there. Austin ranks high on Milken’s 2025 list of best-performing cities. Unemployment was 3.1% in April, versus 4.2% nationally. Companies keep coming here: Realtor.com from California, PEAK6 Investments from Chicago, and Freyr from Norway. Oracle, despite talk of relocating, continues to expand its presence.
While times are tough for the commercial real estate industry and homeowners looking to sell, the upshot is rents have fallen more than 20% from their peaks—a boon for renters. The fact that Austin was the national leader in home construction and remains a Top 10 city in apartment absorption suggests that, once the current construction lull is over, there will be plenty of demand for new homes. Fortunately, Austin’s leaders haven’t been idle during this period of retrenchment. Instead, they’ve enacted some of the most ambitious zoning reforms in the country, laying the groundwork for long-term housing resilience. The metro area still ranks fourth nationally in multifamily permits, another sign that Austin is building for future growth.
Yes, the slowdown in Austin is real—and because of the boom years, the feeling is one of relative decline even as we continue to move forward. In absolute terms, Austin is doing pretty damn fine, and I expect we’ll eventually find a new normal. Of course, that’s not to say challenges don’t remain. Austin, like many other cities, faces a budget deficit (though it’s the first in a long while), too much homelessness, crime rates that are low by other city standards but higher than they should be, and too-high housing costs in the highest opportunity areas. I’m not sure there’s anything we can do to help Austin FC win more soccer matches.
Still, I get why Austin draws outsized scrutiny: its cultural footprint is outsized relative to its demographic footprint. It’s more than a “prominent outpost” of San Francisco. It’s the home of a world-class university, major festivals like SXSW and ACL, and the capital of America’s second-largest (and most self-important) state—what happens in our statehouse is metonymically done by “Austin.” Sometimes it’s our weather that draws national attention, but more often it’s the cultural climate.
If Austin punches above its weight culturally, it makes sense that others like to punch back. So, data be damned, the WSJ article is not going to be the last of its kind—surely, Vanity Fair and Harper’s will get in the game at some point. Incidentally, while researching this essay I discovered that The New York Times had made its own recent contribution to the genre. The lesson here is that sweeping narratives of cities, whether cast as stories of urban doom, gloom, or boom, hardly tell the whole story.
Austin isn’t hanging up its violet crown, it’s taking a breather—and giving those superstar cities a chance to catch up.
What do you think: is Austin over? Are New York and San Francisco back?
Ok so, disclaimers up front:
(1) I’m from Austin, so I have some up close perspective.
(2) I work in tech and was part of the SF->Austin migration during COVID, coming back home for a bit (although I didn’t stay permanently).
A few thoughts:
First I agree that, big picture, a “return to the mean” is going to feel like a comedown after the boom, even though it isn’t really.
At the same time, from the POV of the Silicon Valley industries, Austin really is an outpost. It’s long been home to the back office jobs that are part of the tech ecosystem but don’t pay top dollar, not the heart of the ecosystem. During COVID it looked for a minute like that could actually change, with SF locked down and Austin open, people and companies that wanted to work in person really were moving some top jobs and leadership. But SF did eventually reopen and the wave of migration stopped. But Austin still became a much more important outpost during the COVID years, and I think it will keep the stature it gained.
(As an aside, the “location” taking a giant hit from SF reopening isn’t Austin, it’s remote work.)
Second, Austin has always overhyped itself. I think in part because Texans are very proud of themselves, and Austin is the prettiest and most glamorous part of Texas, there’s always been a regional spotlight shining brightly on the capital. The hype and the reality cause some misunderstandings, and I think that contributes to the coastal elites wanting to make hay over the return to the mean. But as you point out, though, it’s not the second Silicon Valley, it really is the first Austin, so a lot of this is that they just don’t get it.
All that said, these narratives are all overreacting to the short term. In the long run, the mean growth of Texas is so much stronger than California or New York that I have no doubt Austin will continue rise in prominence, even if it were just riding the wave of Texas sprawl. But I think land use reforms in Austin will make its rise quicker, healthier, and more inclusive. And in the long run that will make it less and less an outpost of the coasts, more and more a unique hub of its own.
Move to Lisbon and keep immersing.