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Housing prices in Austin have exploded in the past decade, leading to a city that’s not just unaffordable but also highly segregated. In this podcast, KUT lays out how we got here.

Highway to sprawl: How I-35 shapes where people live in Austin

A neighborhood near I-35 on the southern edge of Austin's city limits. The highway has encouraged people to live farther out by unlocking new lands for development.
Nathan Bernier
A neighborhood near I-35 on the southern edge of Austin's city limits. The highway has encouraged people to live farther out by unlocking new lands for development.

This story is Episode 2 of the podcast "Growth Machine." Listen to the full episode through the player above, and subscribe here.

Since opening in Austin six decades ago, I-35 has done more than carry cars and trucks. The highway has acted as a major player in the city's housing market.

By unlocking new lands for development, I-35 allowed neighborhoods to expand outward in endless waves. The sprawl has defined the city's landscape and encouraged even more highway building, creating a feedback loop that is hard to escape.

I-35 opened with a grand celebration on March 29, 1962. People gathered on the elevated portion of the highway in downtown Austin. Men in suits gave speeches. The Austin High School band played. Instead of a ribbon-cutting, a "ribbon of girls" made up of students from local high schools fanned out across the highway.

 High school girls in uniform form a line across the highway facing south. A few men in dark suits are milling about. Beyond, a few buildings making up the 1962 Austin skyline.
Texas Department of Transportation
This so-called "ribbon of girls" made of high school students formed a line across I-35 for a dedication on March 29, 1962.

But even before the first cars rolled down the new I-35, the development of this "superhighway," as it was fondly called, had already begun to affect where people lived.

To make room for the highway, Austin's City Council seized dozens of homes and businesses, appraisal records and news reports show. One of those homes belonged to Ilus Hall.

 A page from a 1953 appraisal report of properties in the path of the new highway. The page shows Ilus Hall's house, a modest home behind a picket fence. Next to the photo is a part of a hand-drawn map of the property illustrating a chicken coop and a garage.
Nathan Bernier
Austin History Center
Ilus Hall's home at 1008 Clermont St. appeared in a 1953 appraisal report of properties in the path of the new highway. The report had been prepared by appraiser Ben E. King for the city.

Fresh from the Army, Hall bought his first home at 1008 Clermont St. (now Clermont Avenue), just a few hundred yards north of what is now Lady Bird Lake. He and his wife lived in the house only a few years before the city came knocking. At first, the city wanted just a chunk of his property for the highway, and Hall thought he could stay.

"Then they came back and said, 'No, that's not enough; we're going to take all of it,'" said Hall, who's now 102. "I tried to get them to let me have the back half. They wouldn't do it."

 102-year-old Ilus Hall is sitting in an arm chair wearing a dark blue polo shirt. He's a white man who still has white hair on the tops and sides of his head, despite a receding hairline. He's wearing glasses and giving a knowing look.
Nathan Bernier
Ilus Hall, 102, had his home on Clermont Street (now Clermont Avenue) seized by the City of Austin in the 1950s to clear space for I-35.

His home was appraised at $3,400 in 1953, equivalent to $38,873 in today's dollars, according to the Bureau of Labor Statistics' inflation calculator.

"I would have lived there for some time if I hadn't sold it," Hall said.

Other routes for the highway had been considered; Austin looked at San Jacinto Boulevard and Red River Street. But the State Highway Department was adamant about placing the highway down East Avenue.

"If you don't want the East Avenue highway, say so, and we'll quit and spend our money elsewhere," state highway engineer Dewitt Greer threatened the Austin City Council in 1946, according to the Austin Statesman.

East Avenue, already a bustling road, was 200-feet wide and close to downtown — qualifications that made it an attractive route.

But East Avenue was also a segregation line. The city in 1928 forced Black residents to move east of East Avenue. Banks used this avenue as a border to decide who could have access to loans — a discriminatory practice known as redlining. The policies deprived many Black Austinites of home ownership for decades, preventing families from building generational wealth and setting the stage for the eventual gentrification of East Austin.

Part of a 1934 Home Owners' Loan Corporation (HOLC) map showing redlined neighborhoods in Austin. East Avenue formed the western border of the redlined area in East Austin.
University of Richmond
Part of a 1934 Home Owners' Loan Corporation (HOLC) map showing redlined neighborhoods in Austin. East Avenue formed the western border of the redlined area in East Austin. Much of East Austin was graded "hazardous" by HOLC, curbing the economic development of the area by denying loans for homes and business development.

"[I-35] worsened segregation for those people who could not move or those who chose not to move. And then the land was devalued over here," said Harrison Eppright, a docent for the local tourism bureau Visit Austin and Six Square, Austin's Black Cultural District. Eppright was born in the 1950s and grew up in redlined East Austin.

"I guess you could say redlining was the worst thing of all, but certainly that along with I-35, it became an unofficial barrier," he said.

Besides seizing land for construction of the highway and cementing the racist policies of segregationist Austin, I-35 did this other big thing: It opened up a bunch of new land. You could suddenly drive so much faster across the city and beyond. You could buy a less expensive home farther out and still commute to the city for work.

"Highways provide access. They can increase the value of land they touch," said Gian-Claudia Sciara, a professor of regional planning at the University of Texas. "Land that may not have been accessible previously is now accessible."

By 1972, a decade after I-35 opened in Austin, the city had grown substantially, annexing nearly 40 square miles of land and increasing its geographic size by nearly 60%.

 A view of I-35 at 15th street in 1972, before the upper decks were added.
Chuck Fuhs at Parsons Brinkerhof
Texas Freeway
A view of I-35 at 15th street in 1972, before the upper decks were added.

As Austin grew, it became less dense, with residents spreading out and living farther apart. This marked the beginning of a new age of growth: the age of sprawl on steroids.

"We kind of know [sprawl] when we see it," Sciara said. "Low-rise commercial development, strip malls, less dense employment opportunities, more driving involved. Sometimes it has a negative aesthetic connotation."

I-35 also served as a political release valve, taking pressure off Central Austin to build more densely and make room for people.

"All the while, you've got the population saying, 'Let them go to Round Rock. We don't want them as neighbors,'" said Sinclair Black, a retired architect who taught at UT Austin for 50 years and has long opposed highway expansion in Austin. "So it's kind of a mutual conspiracy. You run them out of town, and we'll build them a road."

In recent years, new highways have spurred suburban growth. Since State Highway 130 opened in 2006, the population of Hutto quadrupled to about 40,000. SH 130 goes through Hutto.

Even though homes are more affordable in Austin's fast-growing suburbs, there are often other costs associated with living farther from the city. Wild swings in the price of gas can have a big impact on your home budget. You might buy a larger car to feel safer among the 18-wheelers on I-35. Or, to save on gas, so you might invest in a pricier electric vehicle.

Driving everywhere in a car also has environmental impacts; it's a major contributor to climate change. And the pollution from engine emissions makes air quality worse, which is bad for people who struggle with respiratory diseases like asthma.

But there's another hidden cost to living in the suburbs, and it can fluctuate as wildly as the price of gas: the time you spend in traffic.

"I lose about two hours a day, on average, about two hours a day driving to and from work and maybe doing errands," said Hunter Holder, a tech worker who moved with his husband last year from the Dallas area to Georgetown, a suburb north of Austin.

They spent weeks looking for a home they could afford that included space for offices, a backyard for their dog and proximity to grocery stores.

A dog chases after something just thrown by a person outside in a yard
Patricia Lim
Hunter Holder and his husband wanted a home that included a backyard for their dog. They bought a house in Georgetown in 2022 near the peak of the market.

"I love it. It's totally great. But yeah, the commute to work is pretty monstrous," Holder said. He'd like to live closer to friends in Austin, but "a place that we would be able to comfortably live in would be over a million dollars, and a few years ago that wasn't the case."

Austin's growth has prompted the Texas Department of Transportation to dedicate $7.5 billion to expanding I-35, seizing dozens more properties to add lanes and increase the highway's capacity.

 A rendering showing the planned expansion and lowering of the I-35 main lanes through Central Austin.
Construction is scheduled to start next year on the expansion of I-35 in Central Austin. This rendering illustrates how the lanes will be sunk at Holly Street, and the frontage road will cross to the other side of the highway downtown.

That expansion could make it easier to live even farther out. More people will be incentivized to drive in search of lower housing costs, until the highway fills up again with extra commuters and the congestion returns.

The way we've built roads in Austin determines — in no small part — where people can and cannot live. Now that we've embarked on this highway, it's hard to get off.

Nathan Bernier is the transportation reporter at KUT. He covers the big projects that are reshaping how we get around Austin, like the I-35 overhaul, the airport's rapid growth and the multibillion-dollar transit expansion Project Connect. He also focuses on the daily changes that affect how we walk, bike and drive around the city. Got a tip? Email him at Follow him on X @KUTnathan.
Audrey McGlinchy is KUT's housing reporter. She focuses on affordable housing solutions, renters’ rights and the battles over zoning. Got a tip? Email her at Follow her on Twitter @AKMcGlinchy.
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