By JOSEPH LEAHY
Ben Hamill was confused. Down the street from his house in Brentwood, a building was going up, and he and his wife couldnât quite place what it was. It looked like an apartment or a condo, as far as they could tell, with floor-to-ceiling windows, some cubist-looking eaves and all the trappings of a typical condo. Then they put up a sign: STORAGE.
CubeSmart Self-Storage on Burnet Road was the latest in a salvo of storage facilities that have popped up in his North Austin neighborhood â including the brand new Extra Space Storage that just opened on 51st Street and yet another Extra Space Storage on Burnet.
That got Hamill curious, so he asked our ATXplained project:
Why are there so many self-storage places popping up all over North Austin? Is there really a huge demand for them?
Hamillâs hunch wasnât wrong. The self-storage business is booming in Austin. Last year, the cityâs supply of rentable storage space grew by 9.5 percent, the fastest rate in the country, according to Union Realtime, an industry analyst.
Hamill said heâs not opposed to the storage sites, per se, he just doesnât see what value theyâre adding to his increasingly car-dependent neighborhood.
âIf you have to pass two self-storage units and a condo with no retail on the bottom between getting to places you actually want to go, thatâs like a long walk of not much and it discourages that walkability,â Hamill said.
Itâs simple: Theyâre relatively easy to build, they donât need much staff to operate and theyâre ideal for flipping as property values rise.
âThatâs a cynical take, and Iâll be disappointed if thatâs the case,” he told KUT.
Bill Bellomy owns an Austin-based real estate brokerage company that finances and develops self-storage facilities in the Austin area and across the U.S. He says Hamillâs right, at least about the boom and the upkeep costs of storage sites in Austin. The facilities are relatively cheap to maintain and operate, but heâs not necessarily convinced developers are building them just to hold onto the land.
âItâs getting so much more expensive Ââ as far as the dirt â the cost to build,â Bellomy said. âThe returns are good for developers. Storage, a lot of times, is the best, with the highest returns for these properties.â
The land alone can cost in the tens of millions of dollars, he says, so developers are building nicer, multi-story facilities with more amenities â things like climate-control, 24-hour access and floor-to-ceiling windows.
For Austin customers, those amenities mean higher rates.
Last year, Austinâs average self-storage rate was $102 dollars a month on averageâ the most expensive in Texas, according to SpareFoot, an online marketplace for finding and tracking storage space. Thatâs about $20 more a month than Dallas, San Antonio or Houston.
Alexander Harris, SpareFootâs online editor, says, while Austinâs seeing above-average rates for storage, the industry as a whole has taken off in the last few years.
âNationwide it is blowing up,â Harris said. âIf you look at the construction spending data from the U.S. Census 2017 would be the biggest year on record for self-storage construction.â
According to a SpareFoot analysis, U.S. spending on storage has jumped steadily from about $400 million in 2010 to $3.6 billion last year. Harris says the biggest driver in that growth has been pent-up demand.
âRight after the recession a lot of builders they just kind of stopped doing it. [Storage space developers] couldnât get financing to build new facilities and people were moving out of their storage units to save money,â Harris said. âSo you had this period of three to five where they just werenât building new storage facilities.â
And, Harris says, thereâs probably still room to build more storage space in Austin for now â but construction will likely slow down sometime soon.
âIf itâs not at its peak, itâs very close,” he said.
Still, Austin has other factors driving demand for storage that arenât likely to let up anytime soon. Namely, soaring growth and real estate prices.
David Steinwedell, president and CEO for Affordable Central Texas, a non-profit that focuses on preserving middle-income housing in the Austin area, says the rapid growth of self-storage facilities in Austin is perhaps the most visible sign of how unaffordable housing has become in the metro area.
âHaving such a tight housing market is probably driving the huge amount of demand for the self-storage space,â Steinwedell said.
Because of rental demand, Austinites are often faced with either moving farther away from Austin and commuting or downsizing to a smaller, more affordable place â without a lot of storage space, he says.
âIf youâre downsizing to maintain your rent level, at some point youâre going to end up with stuff that doesnât fit,â Stenwedell said.
Hamill says that makes sense, though, he adds, the answer is somewhat lacking.
âIt just feels like something better could be done with that land,â he said.
He wishes there were a better solution, one that would allow people â and their stuff â to live under one roof.