Landlords are raking in profits: The citywide average monthly apartment rental rate of $1.10 a square foot is the highest in the state, and downtown apartment rents are more than twice the city average, according to Charles H. Heimsath, president of Capitol Market Research.

“Downtown has developed such a charisma that people just really want to be downtown and are willing to pay, particularly young people in the 25-34 age group,” Mr. Heimsath said.

Lenders are still cautious about condominiums, but have backed several hundred rental apartment units now under construction. Riverside Resources, a developer here, is midway through construction of Third and Brazos, a 277-unit apartment project just a block east of Congress Avenue, which runs north-south through the center of downtown.

Gables Residential is digging the foundation for Gables Park Plaza II, which is planned as a 222-unit, 18-story apartment building eight blocks west of Congress and overlooking Lady Bird Lake, a center of activity for runners and boaters.

Several other developers are prepared to begin multifamily construction in the heart of downtown, which is bound by the lake on its southern edge and the Capitol building to the north. Its general boundary on the east is Interstate 35 and on the west is MoPac Boulevard.

Hotel development is heating up as well. White Lodging Services, a corporation in Indiana, is building a 1,012-room JW Marriott convention hotel, scheduled to open in 2015. Closer to the Austin Convention Center, Manchester Texas Financial Group plans to break ground next year on a 1,000-room Fairmont Austin hotel. The 300-room Hyatt Place Hotel is under construction one block west of the convention center.

Annual events like the Austin City Limits music festival and South by Southwest, the popular music, film and interactive gathering, can bring 200,000 to 300,000 visitors to the metropolitan area at a time, far more than will fit in the city’s 30,000 hotel rooms. The central business district has about 6,000 hotel rooms and desperately needs the more than 2,000 rooms now in the pipeline, said Steve Alberts, communications manager at the Austin Convention and Visitors Bureau. “For a long time, there has been a strong demand for more hotel rooms,” he said.