Johnson City, Texas, is grappling with a water supply crisis and a short-term rental boom that is reshaping its neighborhoods, according to Mayor Stephanie Fisher. In an episode of The Building Texas Show published May 27, 2026, Fisher discussed the challenges facing the city of roughly 540 residential single-family water connections, including a groundwater permitting standoff and the conversion of homes into Airbnbs.
The city relies solely on the Ellenberger Aquifer for drinking water, a minor aquifer off the Llano Uplift. Despite sitting on the Pedernales River, Johnson City cannot use the river for drinking water without significant infrastructure investment. The city holds an LCRA permit for 200 acre-feet of Pedernales River water but lacks the millions needed to harvest it. Meanwhile, the capital improvement plan and a pending pumpage permit increase before the Blanco Pedernales Groundwater Conservation District are at the center of current negotiations.
Fisher acknowledged that previous administrative decisions complicated the city's position. "There was some previous administrations that made some decisions. I think they put the cart before the horse, and that's causing us to have some questions asked," she told host Justin McKenzie. She expressed support for the groundwater district's due diligence, stating, "I'm glad that our groundwater district is doing what they need to do to make sure that we all have water forever."
Another pressing issue is the proliferation of short-term rentals. According to Fisher, 67 of the city's 540 residential connections are now Airbnbs, reducing housing availability for residents. The mayor is seeking a boutique or resort-style hotel to anchor tourism and alleviate pressure on the housing market. She views a hotel on the river as the single biggest unlock for both housing and the tax base.
Johnson City is a gateway to the Texas Hill Country, located on Highway 290 as the last stop before Fredericksburg and a common cut-through to Lake LBJ. However, visitors rarely stay overnight. The city has assets such as the Science Mill, the LBJ National Historic Park (including the Texas White House in Stonewall and LBJ's boyhood home), the Old Settlement, the Exotic Resort Zoo, and the annual fair and rodeo weekend. McKenzie contrasted Johnson City's situation with 100-year water planning efforts in Midland and Lubbock, highlighting the vulnerability of Hill Country communities dependent on aquifer recharge in 15-year rainfall cycles.
The episode underscores the broader Hill Country affordability crisis and the need for sustainable growth. For business and technology leaders, the story illustrates the critical intersection of water infrastructure, housing policy, and tourism development in small but rapidly changing communities.
