Entire blocks are being razed to the ground (George Rose/Getty Images)

April 14, 2023   6 mins

Not so long ago, Silicon Valley was a magical land where unicorns flourished; anybody with an idea, seed capital and a little luck could become richer than all the kings of folklore. These days, things aren’t so rosy. Silicon Valley’s own bank recently collapsed, some unicorns have turned out to be donkeys, and, depending on your point of view, the Valley is now either Ground Zero for a plague of disinformation or the epicentre of a sinister private-public surveillance regime.

Meanwhile, house prices are so high in San Francisco that even software engineers at mega companies struggle to afford accommodation, tech companies are downsizing, and homelessness is on the rise. Confronted with these problems, the city recently recommended a payment of $5 million each in “reparations” to eligible black residents. The figure was arrived at without actually doing any maths and, it is estimated, would cost everybody else $600,000 each.

As always, Silicon Valley is at the vanguard of a wider Californian trend. Here is a place where things were too good for too long; where the ruling class became unmoored from reality, hastening their state’s decline. Residents are voting with their feet: in 2020, California’s population declined for the first time in its history, a trend which continued through July 2022. Where, people are asking, are all those who came to California seeking success now going?

For many, the answer appears to be Texas. Austin in particular has received some high-profile defections. In 2020, Joe Rogan left LA for the city because, as he put it, “I want fucking freedom.” Joe Lonsdale, the co-founder of Palantir, the data mining firm  that helped locate Osama Bin Laden, declared that Texas beats California “in almost every method you can name, whether it’s education, pollution, homeless[ness].” Trump-supporting billionaire Larry Ellison relocated the HQ of database giant Oracle from Redwood City to Austin following a bitter struggle with regulators. And, most famously, Elon Musk shifted Tesla’s headquarters to Austin in 2021, after claiming that California regulators had started behaving like a “monopoly that cannot go bankrupt”.

Musk’s announcement marked the moment when the rise of Austin as a tech hub reached critical mass in the public consciousness, but the process had been underway for over a decade. Long before Tesla arrived, Google, Amazon and Meta (as well as older firms such as Apple, IBM and Dell) had established significant presences in the city. They had been attracted by a concentration of engineering talent and Texas’s business-friendly government. The result is that the Austin metro’s population has exploded, while rents and house prices have soared. Since I moved here, during the second Bush administration, the downtown skyline has completely transformed. A second centre, “The Domain”, has sprouted in the city’s north, where many tech firms have offices.

The cultural changes have also been profound. The laid-back city of old prided itself on the slogan, “Keep Austin Weird”. But there is a sense among locals that, in the new Austin, idiosyncrasies are ironed out. Formerly hip neighbourhoods that might once have boasted the odd wax museum or vintage thrift store are now lined with luxury boutiques and frou-frou eateries, while quirky institutions have either fled to the remote reaches of the city to survive or closed for good.

Although Austin was a second-tier provincial city until very recently, it always punched above its weight when it came to the counterculture. Cheap rents, low house prices and Left-wing politics made it attractive to creative people and misfits: “slackers” unafflicted by the ambition and status anxiety that bedevils all those chasing careers in NYC or LA. Psychedelic music was born here, in the shape of The 13th Floor Elevator’s debut LP — released a year before Sergeant Pepper’s Lonely Hearts Club Band. And in my almost two decades here, I have met many interesting characters without trying, including a Scottish BMX champion who was once name-dropped on an episode of Neighbours, Morrissey’s guitar technician, and a man who turned his PhD on crustaceans in Victorian literature into a career in AI. The poster boy for the Keep Austin Weird era was Leslie Cochran, a homeless man in a thong bikini who ran for mayor three times and had his own line of fridge magnets that allowed you to dress him in an array of outfits. Leslie’s death in 2012 (he was only 60) coincides almost too precisely with the last gasp of weird Austin.

As depressing as this metamorphosis might feel to many Austinites, it is simply the next logical stage in a process that began years ago, as middle-class hipsters displaced the black and Hispanic residents of the working-class neighbourhoods they moved into. What follows now is not gentrification but rather wholesale destruction, as entire blocks are razed to the ground and replaced with luxury apartment buildings, while the truly wealthy erect ostentatious ziggurats on lots where modest kit houses once stood.

Tech bros are often cast as the villains here, but they are too easy to scapegoat. A more interesting example of how social dynamics have shifted in the new Austin can be found in the furore that erupted when the residents of a brand new luxury development attempted to shut down a weekly car club that had been taking place since the Nineties. The sight of customised low riders and the roar of engines was too much for the exquisite sensibilities of the residents of “The Weaver”, one of whom denounced the club as “a display of toxic masculinity”.

The invocation of Left-wing pieties in the service of naked class war captured perfectly the way similar language would be used to justify policies during the pandemic that had a disproportionately harmful effect on the poor. Austin’s leadership embraced school closures and mask psychosis. After the murder of George Floyd, it also voted to defund the police — promptly experienced record murder rates. This was not the first time radically progressive policy had backfired in Austin. In 2019, the city had decriminalised public camping, allowing tent cities doubling as drug markets to spring up along freeways and in underpasses. San Francisco had already demonstrated how a policy that sounds compassionate can quickly become indistinguishable from the worst kind of laissez-faire cruelty, yet Austin seemed determined to pursue the policy to its destruction.

But while Silicon Valley operates in uber-progressive California, Austin has an openly hostile Republican state legislature to contend with. Texas puts a limit on just how far the city can go with its more avant-garde policies, while occasional uprisings from the electorate thwart others. The ban on public camping was reinstated by popular vote. It is also misleading to assume that everybody moving to Austin is a doctrinaire progressive: when three-time Democrat failure Robert “Beto” O’Rourke was defeated for the first time, he had actually polled higher among native-born Texans than among those who have moved to the state from elsewhere. Indeed, Musk himself has argued that Austin should not slavishly copy San Francisco, while Lonsdale said that bad policies made the state “unlivable”. Indeed, so appalled is Lonsdale by the “far Left” thinking he saw in San Francisco that he co-founded the new University of Austin to challenge the “new ideologies of intolerance that order subservience and quash those who think differently.”

It would be preferable, of course, if we did not live in a world where entire cities could be so radically transformed by the desires of the super-rich. But in this, Austin is becoming not weirder, but more normal. All the great cities — Moscow, London, Paris, New York, LA, Istanbul — are full of buildings, monuments and institutions that exist only because rich and powerful people wanted them: indeed, there are entire cities, such as Saint Petersburg and Astana that exist because of this principle. If not exactly progress, it is a sign of Austin leaving childish things behind.

Meanwhile, even as the old “Keep Austin Weird” spirit teeters on the verge of extinction, the new city is weird in its own ways. Sometimes this is in the style of nouveau riche grotesque: $150 cups of coffee are weird. But I also recall my confusion the first time I drove past the shell of Musk’s immense Tesla Gigafactory just outside the city. At first, I assumed it was just another Amazon warehouse, but the scale was like nothing I had ever seen before. It was weirdly radical to see so ambitious a manufacturing plant in a Western country when we have spent decades getting the rest of the world to make our stuff for us.

And people here still dream of creating their own worlds: I recently met a man who was considering building a commune south of the city, while Musk himself is rumoured to be contemplating the construction of a “utopia” in the Austin metro area, close to where facilities for The Boring Company and SpaceX are being assembled. On the one hand, Musk’s plans have a practical aim: he wants his employees to have access to affordable housing. But on the other, they are extremely secretive, although Kanye West was reportedly involved in discussions about what the town might look like.

But whether Musk builds his City of the Sun or not, there is a more certain sign of the old Austin’s extinction. The city has approved a 12-foot tall monument, to be erected downtown, that will read: “Keep Austin Weird.” In doing so, a cold, heavy slab has been dropped on the still warm corpse of the town that was once was, to guarantee it never escapes from its resting place.

Daniel Kalder is an author based in Texas. Previously, he spent ten years living in the former Soviet bloc. His latest book, Dictator Literature, is published by Oneworld. He also writes on Substack: Thus Spake Daniel Kalder.