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By Russell Gold 

When Richard Linklater shot his movie "Slacker" on the streets of Austin in 1989, he captured a regional city where the young people were laid back, marginally employed and proudly less driven than those in other parts of the country. Fast-forward three decades and the Texas city has been transformed -- from a small hipster haven into a bustling and fast-paced high-tech hub.

That sometimes uneasy transformation culminated Thursday with Apple Inc.'s decision to build a $1 billion campus in the city, adding 5,000 workers initially, and as many as 15,000 jobs over time. The announcement adds to Apple's existing Austin campus, the company's largest outside of California, and comes on top of other big new arrivals in the city, including offices from Alphabet Inc.'s Google, Facebook Inc. and the U.S. Army's Futures Command headquarters.

What has made Austin so attractive? It has a relatively low cost of living compared with other tech hubs such as San Francisco, and several local universities, including the University of Texas' main campus, are churning out a steady stream of young programmers.

The city has focused on attracting tech companies. But it has also worked to expand its music and film industry, anchored by several large music festivals. The vibrant cultural scene in the city, nicknamed the "Live Music Capital of the World," made it easier to attract young talent, several people involved in economic development said.

"It doesn't matter if you are writing songs or software, Austin is an environment that is appealing to people who are creative," said Jon Hockenyos, president of TXP, an Austin economic analysis and public policy firm that has a contract with the city.

Another factor for tech companies has been the large number of universities and computer programmers in the area. "It's all about the talent," said Matt Curtis, founder of Smart City Policy Group, an Austin firm that consultants with cities on technology. "It's a region that grows talent with five universities but it's also an area that attracts great talent."

Michele Grieshaber, chief marketing officer of Silicon Laboratories Inc., a semiconductor chip and software company based in downtown Austin, agrees that there are many engineers who want to live in Austin. Another draw, she said, was the quality of life. "We complain about traffic in Austin, but it is infinitely harder to commute in the Valley," she said.

The Austin Chamber of Commerce boasts that per-capita state and local taxes are less than the national average, and one-third less than in California. Texas has no state income tax. It's a lot more affordable for a young engineer to purchase a house in Austin -- for now. The median home price index for the Austin metro area is $302,100, according to Zillow, a real-estate tracking firm. The comparable price for the San Jose metro area is $1.29 million.

"It is still cheaper than California, although that gap is closing," says Eric Peterson, chief executive of Descendent Studios, a videogame developer in Austin.

Write to Russell Gold at russell.gold@wsj.com

(END) Dow Jones Newswires

December 13, 2018 14:35 ET (19:35 GMT)

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