South by Southwest prides itself on its scruffy roots. A conference dreamed up in 1986 by a few journalists to bring attention to Austin’s boisterous live music scene. A film festival that epitomized the spirit of a handful of fiercely independent local filmmakers. The interactive component was once so intimate that the closing party was held at the home of science fiction writer Bruce Sterling.

Thirty years later, as I stood in a line 50-deep to enter a throbbing, McDonald’s-sponsored lounge complete with a virtual reality Happy Meal experience, I concluded that today’s SXSW—"South-by" for locals and regulars—is a very different beast compared to those humble beginnings.

"It’s like the goldfish that will grow as big as the container you put it in," says Catlin Whitington, an Austin native who has been designing that container as a planner for SXSW for a decade. "We work with numerous city agencies to determine our impact on public infrastructure and we have to figure out temporary solutions to this demand."

That impact is massive. In 2016, an estimated 230,000 people swarmed the Texas city for SXSW. They included President Barack Obama and First Lady Michelle Obama, both featured as keynote speakers. An economic impact study says the festival booked nearly 60,000 hotel room nights in 64 hotels and brought in about $325.3 million for the city—about $8 million more than in 2015.

The phenomenon that transforms Austin for 10 days every March continues to metastasize, expanding into different neighborhoods, influencing city policy, and seemingly infiltrating every barbecue joint in the region. The festival may be temporary, but for three decades it’s been shaping the future of Austin.

When I first attended SXSW in 2006, I kept marveling that I had flown from California to report on tech companies converging upon a mid-sized Texas city. Over the years, I watched demos for then-tiny startups named Twitter and Foursquare and Airbnb flit across screens at the convention center, which had been specifically expanded to lure additional interactive programming. It worked: SXSW quickly became an essential event for people across a wide range of industries, from digital music to digital marketing. And brands’ efforts to capture their attention became an industry in itself.

While SXSW coordinates its own official events—panel discussions, movie screenings, live music showcases—there are hundreds more events happening in Austin at the same time, which coincide, but are not directly affiliated with, the festival itself. Projecting logos on distressed brick walls at parties is no longer enough to entice social media influencers. A few years ago, entertainment, media, and tech companies began to set up camp in what Austinites call "houses" and PR people call "activations"—branded environments that take over existing bars, restaurants, and clubs with a tequila-fueled, queso-flowing, 10-day party (with free Wi-Fi).

The addition of the branded activations is surreal, as if one has stumbled into an alternate, corporate-sponsored future.

With the University of Texas up the street, Austin’s main drag, Sixth Street, already has that college-town vibe; it’s a place where one might find herself wading ankle-deep in regurgitated Shiner Bock at 3 a.m. But the addition of the branded activations is surreal, as if one has stumbled into an alternate, corporate-sponsored future. When I found myself walking past Max’s Wine Dive on San Jacinto as its facade was being covered by a sign rechristening it the "CNN Grill," it reminded me of the dystopian film Idiocracy, where gargantuan, three-dimensional logos atop every building have subsumed all architectural character. (The film’s prescient director, Mike Judge, is actually from Austin, and some of the film was shot here, years before the activations began.)

In recent years, these activations have moved even further into the Idiocracy realm. If a 62-foot-tall Doritos vending machine hosting a Lady Gaga concert didn’t provide enough of a carnival-like atmosphere, consider that the activation for the USA show Mr. Robot was an actual carnival, complete with Ferris wheel.

Most of these interventions on Austin’s landscape are fleeting, urban-scale stage dressings that haul money into the city in exchange for that intangible return known as engagement. (Often, attendees have no idea whether they're experiencing an activation or everyday Austin: Imagine my surprise a few years after my first SXSW, when I learned that one of my favorite "bars" was really just a well-curated parking lot heaped with food trucks, picnic tables, and cafe lights.)

The host businesses benefit in financial, and sometimes physical, ways. A handful of brands return to the same venues every year, cementing their reciprocal relationships by building new bathrooms, better sound systems, and larger patios for their hosts. "Each year, we ask what they need or would like to see in the venue and we try to leave behind at least one thing that improves the space," says Eladio Correa, North American director of global brand marketing for Vans, which has a longstanding relationship producing its House of Vans at the Austin bar the Mohawk.

"Infrastructure improvements are a common thing," says Johnny Sarkis, a club owner and event producer who has worked on activations for many brands, including Vans, and now produces Sound on Sound Fest. "These can even be simple things like wanting upgraded power or better water pressure. But we definitely work with them to make the improvements collaboratively, and they’re looking to bring in things that we are going to be reusing and keeping."

The evolution of the SXSW activation can be best seen through the history of the Spotify House. Since 2012, when it painted an East Austin coffee shop in radioactive Spotify green and had bands play in the garden, the music service has raised the branding bar. But in 2016, Spotify took a different approach, enlisting local nonprofits to design and build a SXSW house that could be completely reclaimed; the materials were eventually repurposed into three recording studios for the music department of nearby Kealing Middle School. Additionally, Spotify donated all the space’s furniture, lamps, fixtures, and artwork.

Rebuilding Together Austin founder Cindy Spackman, who worked with Mindpop and DPR Construction on this year’s Spotify House, says she hopes the success of the project becomes a model for SXSW activations, not only when it comes to reclaiming materials, but also in how brands might partner with local schools and nonprofits. "I have noticed people are being more thoughtful about how they get involved, especially with local businesses. Instead of a one-day build, they want to know how they can have a long and lasting impact," she says. "I would love to see more corporations coming in and having the same consideration: What do we leave behind as we walk away?"

What’s left behind is important, as SXSW is kind of a pain in the ass for locals, who must temporarily surrender their coffee shops and taquerias to YouTube personalities. But the success of SXSW has lured so many other events to Austin that it’s not just 10 days in March anymore, says Michael Hall, the executive editor at Texas Monthly who has lived in Austin since 1979. "There is a period of time in the spring when it starts, where there’s something going on every weekend, and they’re always blocking off the streets," he says. "The city has become such a destination that just to go down to Zilker Park, you have to figure out what festival is going on there."

Hall, who is also a musician, says a city-nurtured festival culture doesn’t bother him, but he does see his neighbors worry that the growth it’s enabling might permanently damage Austin’s authenticity. "There are so many hard feelings in this city about growth," says Hall. "They’re really bitter about SXSW, which they see as this thing that has brought a lot of this modern big city hell to Austin."

At 2009’s SXSW, I found myself on the streets of Austin early in the morning, hungry, hungover, and desperately searching for a tiny diner where I swore—had I dreamed it?—I’d eaten a transcendent platter of migas, an Austin breakfast speciality, just a year before. After walking a few blocks along Congress, crossing and re-crossing the street, then finally consulting Yelp, I realized I was, in fact, standing in the right place. I couldn’t find it because it had been demolished to make way for what would become a 34-story J.W. Marriott, which would be the largest hotel in the city when it was completed in 2015.

"We have to respect and improve access to the infrastructure and amenities that our residents want. It’s a learning curve for each given event and the conversations are ongoing." —Sly Majid, chief service officer for the city of Austin

The restaurant, Las Manitas, was eulogized in a Texas Monthly story by Hall, who offered its demise as a potential moment when "Old Austin died and New Austin was born." It was physical evidence of the glass curtain wall of tourism-fueled empire-building imperiously crushing the quirky local businesses that lured people to the city in the first place. That’s not an unfamiliar narrative to anyone in a changing city, of course. But it represents a dark side of this type of event-based urbanism.

In 2015, an East Austin piñata store was razed overnight without any warning to the business owners, whose tissue-paper creations were still inside. While the neighborhood had already been experiencing its own brand of hyper-gentrification, it was discovered that the property owner had filed permits and was actively soliciting food trucks for an event during SXSW, with plans to develop the site into a full-time event space. The sponsor subsequently pulled out of the event due to the controversy and the property was left vacant for the festival. (Later that year, the space became a parking lot for a cat cafe, which was protested on its first day.)

While it’s an isolated incident, it illustrates the lucrative opportunity for Austin developers to focus on purpose-built event spaces. These are really nothing more than empty warehouses—they pulse with activity during SXSW, and might host a handful of other festival events, corporate parties, or weddings throughout the year. But even then, this is real estate only accessible to those on a guest list.

Since these event spaces are best delivered raw, awaiting their Samsung or Sony makeovers, they also may be creating a specific type of blight. After Antone’s, a legendary blues club, moved to a new location earlier this year, HBO converted its former space into a Game of Thrones outpost. Months later, it’s still vacant at busy Fifth and Lavaca, but "available for events." Some buildings are more valuable if they’re kept as dilapidated shells that can be easily customized by the whims of a wealthy corporation. Complicating matters is the fact that several more large festivals now have their own brand activations, like the Formula 1 race and Austin City Limits.

Contributing positively to the streetscape is a goal for the new, 5,800 square-foot space 800 Congress, which hosted an official SXSW music showcase as its first-ever event. Even though the space was only open for 50 days over nine months (the goal for 2017 is 150), developers at Austin’s Parkside Projects felt the responsibility to be a good neighbor. "800 Congress is part of this revitalization of North Congress," says event director Allison Gueli. "It’s important to make sure the space looks nice whether it has people inside it or not." In addition to a landscaped, permeable facade, she points to a "pocket patio" and coffee shop adjacent to the space, which brings foot traffic to the sidewalk. Additionally, many of the non-SXSW events 800 Congress hosts are local—fundraisers for schools and nonprofits, for example—and do benefit the community at large.

If a 62-foot-tall Doritos vending machine hosting a Lady Gaga concert didn’t provide enough of a carnival-like atmosphere, consider that the activation for the USA show Mr. Robot was an actual carnival, complete with ferris wheel.

Still, it’s not unlike Airbnb, where short-term rentals limit housing stock and force residents out of popular neighborhoods. Just opening for the big festivals is enough to make these types of blank spaces financially successful, says Whitington. "People can manage their costs and don’t have year-round operating requirements," he says, but he does recognize the unfortunate side effect. "You don’t have that member of the community being a year-round tenant." Could Austin become a place where small businesses are destroyed so a car company can have a rave-ready faux-industrial space to occupy a few days per year?

As chief service officer for the city of Austin, talking about SXSW is a big part of Sly Majid’s role to improve quality of life for citizens. "When you look at these event cities that have turned this element of who they are into something profitable, they are rolling out the red carpet and welcoming people to their community," Majid says. "We have to respect and improve access to the infrastructure and amenities that our residents want. It’s a learning curve for each given event and the conversations are ongoing."

That conversation now includes pointed efforts to limit the scale of all special events, especially in light of a recent tragedy that shook Austin’s festival culture to its core. During 2014’s SXSW a drunk driver plowed into a crowd, killing four people and injuring two dozen more. "I know all the SXSW guys, and they were genuinely horrified by it," says Hall, who has attended nearly every SXSW for the past 30 years. "I do think that they knew that things had gone too far and they needed to do something about it."

A public safety ordinance was put into place, with a two-year moratorium that prevented any new events from being planned downtown. Earlier this year, that moratorium was extended to 2018. Activations were significantly scaled back in 2015, as the brands grappled with producing a more restrained event. The city commissioned a long-term analysis of festivals like SXSW, as part of a dedicated special events department. It also forced Austin to contemplate whether SXSW had outgrown its home. One report on overcrowding and alcohol consumption issues led a San Antonio city councilman to suggest that SXSW would be warmly welcomed to Austin's rival to the south. This idea didn’t go over well with Austinites, who remain fiercely proud of SXSW, despite its many challenges.

In 2016, I landed in an Austin I barely recognized. By most measures Austin was now the fastest growing city in the country, nestled inside some of the fastest growing counties in the country. In late 2015, the population of the Austin metropolitan area edged past two million.

Despite the opening of the 1,012 new rooms at the J.W. Marriott—with several thousand more on the way—downtown hotels had sold out within a matter of days. I found a place to stay 12 miles away, a one-hour bus ride my only transit option for getting downtown. One day, thanks to congestion and surge pricing, I spent $70 on Lyfts just to get to the conference and back. (This was, of course, before Uber and Lyft left the city earlier this year.)

I was experiencing firsthand the most unfortunate slice of contemporary Austin life. Despite investment in a commuter rail line that threads to the convention center (but not to the airport), and the city’s bike sharing system, which was deployed in 2013, a lack of dense, affordable housing in the city center means about 140,000 people must drive into Austin’s downtown every day to work. The sprawl, and the lack of transit alternatives, is by far the worst possible problem facing the city. Now it’s a familiar part of SXSW, too, as twice as many attendees are attempting to move around the city, traveling to venues that used to be walkable, but are now located farther and farther apart, using mostly cars. It’s instant gridlock.

That’s why, on the day of President Obama’s SXSW visit in 2016, Mayor Steve Adler declared a citywide work-from-home day. It was an incredible success—people remarked they had not seen roads so empty since the 1990s—and somewhat of an epiphany for many Austinites. "You realized that if we were just smarter and worked together better to use the space we have more efficiently, we would all be in a better place," says Joe Deshotel, director of community engagement for Ride Austin, a local nonprofit e-hailing company. "It was proof that with some cooperation, we could do it."

SXSW offers Austin a unique gift—a temporary prototyping lab for future growth. Designing for a downtown that swells by 230,000 people for 10 days every spring allows the city to test extreme cases for logistics, housing, and, most critically, mobility solutions. "SXSW inadvertently acts like an accelerator for different types of transportation ideas that are new and allows us to test potentially innovative solutions," says Deshotel. "For almost two weeks we get to experience what it’s like in Manhattan in Austin."

"I wish we had that kind of vibrant pedestrian life and activity year-round," laments Whitington, who notes that those who come to Austin in August will be dismayed by the 100-degree temperatures and lack of outdoor dining options. But Whitington notes that it’s not just about the sheer numbers of people, it’s about ensuring they mix. "There’s no other event that’s like SXSW in that we really focus on convergence," says Whitington. SXSW isn’t just about films and apps and bands and barbecue—it’s jostling them together in a cocktail shaker like the city’s signature Mexican Martini and pouring them out onto various Austin corners. The size of the conference, and its urban-scale interaction, is important.

That’s also why dozens of U.S. mayors came to Austin during SXSW this year. The leaders were ostensibly there to solicit the tech community to tackle civic challenges—with their own brand activations to boot; you could visit city-themed houses like WeDC or ChooseATL—but also to see how SXSW makes Austin a hotbed of urban innovation. The city is functioning much the way the festival was originally meant to by bringing together creatives to collaborate. But now it’s about using the festival itself as an incubator to solve city problems.

Development vs. displacement. Public assets vs. private space. Smart density vs. sprawl. Planning for SXSW’s future might hold the answers to Austin’s greatest concerns. As I rode the B-cycle bike share north over the Congress Bridge last spring, on my way from one activation to another, I saw a skyline that has been shaped by 30 years of welcoming new ideas to the city—and plenty of room for more.

Editor: Sara Polsky