Close on the heels of Donald Trump’s idea to build up to ten “freedom cities” on federal land come reports that Elon Musk is planning a “Texas Utopia”—his “own town” says the Wall Street Journal. But although America has a long history of company towns, the plans for what some are calling “Muskville” so far just look like an ordinary small suburb, part of the Austin region’s housing crisis.
Musk is working with Lennar Construction, one of the nation’s largest homebuilders, proposing 110 homes in Bastrop County, Texas. That’s only a housing development, not anything approaching a large city. (With his typical modesty, Musk calls the development “Project Amazing.”)
Bastrop County is part of the rapidly growing Austin-Round Rock-Georgetown Metropolitan Statistical Area (MSA), the 28th largest MSA in the 2020 Census. That MSA was the fastest growing area in the country between 2016 and 2021, with its population growing 14.1%, driven by the expansion not only of Musk’s firms, but Apple
AAPL
And fast growing populations in the US push up housing prices. In the six years between 2016 and 2021, a federal index measuring housing prices for the Austin region shot up by 83.9%, almost a 14% annual increase.
So there’s a lot of pressure to build housing in the Austin area. But the city of Austin’s most recent mayoral election was won by long-time Democratic political leader Kirk Watson, who is seen by opponents as anti-housing, favoring existing homeowner control of zoning and building regulations in their city council districts. That sort of homeowner empowerment often has meant less housing in other cities.
Can private CEOs like Musk step in where government won’t build? So far, Musk’s proposal just seems like a standard suburban development, increasing sprawl while not addressing housing cost issues for lower-income people. According to the Journal, Musk has bought at least 3500 acres and may try to incorporate a new town called “Snailbrook” (after the mascot of Musk’s tunnel firm.)
One more small, independent suburb outside of Austin’s city limits and control will increase the fragmentation of regional governance, likely resulting in racially and economically segregated housing. (My new book from Columbia University Press, Unequal Cities, analyzes this long-standing American metropolitan pattern.)
Other tech leaders may be more ambitious. Compare Musk’s 110 suburban houses to Google’s “Downtown West” mixed-use development in San Jose, CA. Approved in 2021, the project would have 4000 housing units (in larger buildings, not single family houses like “Muskville”). Although Google
GOOG
Musk’s 110 houses seem pretty small when compared to previous corporate interventions in housing and town building. Henry Ford built his massive River Rouge vehicle factory complex in Dearborn, outside of Detroit. As the city expanded in Ford’s direction through annexation, Ford helped mastermind an expansion of Dearborn to keep his factory, and town, from being annexed by Detroit.
Ford successfully backed a mayoral candidate who wanted to merge Dearborn with “Fordson,” an adjacent town bordering on Detroit, making a larger, more powerful, and more controllable city. His cousin, Clyde Ford, became the first mayor of the new larger city.
It wasn’t an admirable takeover. Henry controlled the local newspaper, the Dearborn Independent, where he published a deeply anti-Semitic series on “the international Jew,” including the lurid and false “Protocols of the Elders of Zion.” Dearborn became known as a “sundown town,” meaning Blacks shouldn’t be seen there after sundown. The city later repeatedly elected racist Orville Hubbard as mayor (36 years in office), who favored “complete segregation” because integration would lead to “a mongrel race.”
Allowing CEOs and companies to control housing and towns, while not necessarily leading to the depths that Dearborn reached, is a bad and anti-democratic idea. The nation is littered with decayed “company towns,” often built around extractive industries like coal, timber, and agriculture or a single large industrial employer. When the economy changes and the dominant employer shrinks or leaves, these towns often see sharp and sustained rises in poverty.
Of course, the likely residents of the 110 houses in “Muskville” won’t be poor factory workers or struggling coal miners. It isn’t clear if Musk will subsidize the housing to allow his technical workers to move in.
But 110 units won’t solve the Austin’s region’s housing crisis. Instead, the region will likely go through what many American metros experience—small discrete suburbs of wealthy single-family home owners, a uncoordinated and fragmented economic region, a refusal to build denser multifamily housing, and anti-housing politics in the core city shaped by affluent homeowners resisting development while protecting skyrocketing housing values.
A real “Project Amazing” would take on those problems. But Musk’s relatively small housing development, and even the incorporation of one more suburban town, will instead just reflect and contribute to our ongoing housing and urban crisis.