Austin 2026: The New Rules of Economic Development at City Hall
A New Fiscal Era for Austin
If you’ve been listening closely at Austin City Hall this year, one shift stands out: economic development has moved from a talking point to the center of the city’s strategy.
City Manager T.C. Broadnax has been saying it in different ways all year. Last week’s budget hearings just made it harder to miss.
From the start of his first full budget cycle, Broadnax has been upfront that the old model—growing services with a little more tax capacity each year—is over. Federal relief is gone. Sales tax has cooled. The state’s 3.5% cap on property tax revenue is real, and Austin is now operating inside that box. When voters rejected Proposition Q on November 4, cutting off a planned tax increase, they underlined the point: the city has to live within its means.
Economic Development Moves to the Center
That’s the backdrop for why economic development now shows up as a core priority, not an add-on.
Earlier this summer, when Broadnax rolled out the FY 2025–26 budget, he said plainly that Austin has to “do more to incentivize” housing and economic growth so the city can “keep up with our ongoing expenses by putting more value on more property that ultimately becomes subject to taxation.” If you can’t raise the rate much, you have to grow what the rate is applied to.
Where Austin Is Still Investing
That idea runs through the choices the city is making now:
Big capital programs at the airport and within Austin Energy, Austin Water, and transportation are still moving because they’re tied to enterprise revenues, federal grants, and bonds backed by system users—not the General Fund. They’re framed as long-term economic investments that expand the tax base and support jobs without asking homeowners and small businesses to carry all the cost.
Housing and land use decisions are increasingly justified in fiscal terms: how many units, what taxable value, what infrastructure burden, and what they mean for long-term affordability and stability.
From “Good Ideas” to Measurable Outcomes
At the same time, the way City Hall thinks about economic development money is changing. It’s no longer enough for a deal or program to sound good or simply check a “jobs” box. Broadnax and Council are talking more about metrics and return on investment—what the city is buying, how many jobs are created and at what wages, how much private or philanthropic capital is involved, and whether a project helps stabilize the tax base or reduce pressure on core services. Those are economic development questions, even when they’re being asked in housing, social service, or public safety contexts.
Lessons from Dallas: Braided Capital and Proof
Broadnax is not coming to that mindset cold. In Dallas, he helped steer the city’s role in the R.E.A.L. Time Rehousing initiative, a roughly $72 million effort that combined city dollars, federal funding, and significant private and philanthropic support to move thousands of people out of homelessness. Public statements from that period emphasized investing in “solutions that are proven to reduce homelessness” and relying on public–private coalitions to move quickly and scale what works. Taken together, Austin’s new oversight tools and Broadnax’s track record elsewhere suggest a clear direction: here, too, he is likely to favor projects where public, private, and philanthropic dollars are braided together, backed by data, and aimed at measurable outcomes—whether the conversation is about housing, workforce, or classic bricks-and-mortar economic development.
Lessons from Dallas: Braided Capital and Proof
Layered on top of that is a third element: partnerships. Broadnax’s “People, Place, and Partnerships” frame is not just branding. It reflects a practical reality: Austin cannot finance its future on property taxes alone.
For economic development, that means:
The city is looking for private and institutional partners who bring capital, not just ideas.
Deals are more likely to move if they share risk and produce obvious community benefits—jobs, tax base growth, infrastructure, or long-term affordability—that can be measured and explained to residents.
Projects tied to major nodes—AUS, activity centers, corridors—are being evaluated not only on design and land use, but on how they support a more resilient local economy.
Austin’s 2026 Economic Development Priorities
Taken together, these decisions add up to a clear set of economic development priorities for Austin heading into 2026:
Grow the tax base, not just the tax rate. Projects that bring new taxable value, expand enterprise revenues, or unlock outside funding will have a built-in advantage.
Show the numbers. Proposals will need to quantify their impact—jobs, wages, investment, and how they support citywide goals—not just tell a story.
Share the risk. The city is favoring partnerships where public dollars are leveraged by private, institutional, and philanthropic capital, and where long-term obligations are sustainable under current caps.
How to Pitch Austin in 2026
What this means if you’re bringing a project to Austin
If you’re planning a major project here—whether it’s a development, a facility, a program, or a service contract—Broadnax’s approach suggests three questions to answer before you ever walk into City Hall:
Tax base: How does this grow or protect taxable value, or generate user-supported revenue over time?
Proof: What are the three to five metrics that show this project actually delivers—on jobs, stability, or cost avoidance—not just in year one, but across the life of the deal?
Risk: How much of the capital and risk are you, your investors, or your philanthropic partners putting up front, and how clearly can you describe that to a skeptical Council?
If you can’t answer those in a page or less, you’re not yet aligned with how Austin is thinking about economic development.
For businesses, developers, institutions, and serious nonprofits, the takeaway is straightforward: a good idea is now table stakes. If your project can’t strengthen the city’s economic position, prove its impact, and share risk, it’s going to struggle for oxygen in this environment. If it can, Austin is still a place where big ideas can move—just under a new set of rules.
Contact us
If these questions are already on your mind as you plan for Austin 2026, we’re available to talk them through with you.
📩 info@binghamgp.com
//Bingham Group
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