Determining the future of Austin's interstate

Axios

07-05-2025

Austin's plan to build park-like plazas over an expanded Interstate 35 is now in jeopardy, shaken by soaring construction costs, a city budget deficit and a fickle federal partner.
Why it matters: The idea was to one day create a semblance of continuity from East Austin to downtown across a highway that has long served as a cultural, racial and physical barrier.
That highway will now grow even broader as part of a multibillion-dollar plan that state officials insist will ease traffic.
Catch up quick: Work is underway on the highway expansion, with the 8-mile piece through Central Austin expected to finish by 2032 — at a cost of at least $4.5 billion. The project includes:
Dismantling the existing I-35 upper decks north of Manor Road.
Adding two non-tolled high-occupancy lanes in each direction from U.S. 290 East to Ben White Boulevard, for a total of at least 15 lanes — though there will be more when frontage roads are folded in.
Sinking lanes beneath ground level from East Oltorf Street to East Riverside Drive and from East Cesar Chavez Street to Airport Boulevard.
Between the lines: Essentially powerless to stop the project, which has faced opposition from some City Council members, the city launched an initiative — Our Future 35 — that promoted an extensive system stitching together the two sides of the highway, including with tree-filled green spaces.
By the numbers: Fully realized, the project could cost as much as $1.4 billion.
That would cover eight stretches of the highway totaling about 26 acres.
Yes, but: Congressional action means a $105 million grant expected from the U.S. Department of Transportation is now in jeopardy, Mayor Kirk Watson reported to council members last week.
Meanwhile, the city faces a budget deficit and officials are looking for ways to winnow down expenses.
The intrigue: Escalating construction costs, compounded by inflation, have already limited the scope of another major Austin transportation project, the light rail system called Project Connect.
What they're saying: At an April work session about the caps, Council Member Natasha Harper-Madison described the expense as "the cost of trying to retrofit a major metropolitan city."
"But the sustained community division, the physical barrier that I-35 continues to be to segregate our communities, to limit access to resources and opportunities for residents of East Austin," has a cost as well, she said.
"Our problems have been that we have underbuilt, and we're trying to catch up to the growth and to the infrastructure needs that we've had," Council Member José "Chito" Vela said.
The other side:"I like this idea of a once-in-a-generation investment opportunity for cap and stitch," Council Member Mike Siegel said at the April meeting. "But there might be other once-in-a-generation opportunities, whether it's housing, whether it's fixing leaky pipes or other, you know, necessary capital projects."