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The escalating housing costs in Austin have created significant challenges for both renters and aspiring homeowners. As a result, many working individuals in Austin are finding it increasingly difficult to afford their own homes. Consequently, a prolonged debate regarding the types of housing that should be permitted in the city may be reaching a critical juncture.
During the pandemic era, Austin’s housing affordability crisis, which has been a longstanding issue, escalated to unprecedented levels due to significant population and job growth.
The recent crisis, coupled with the emergence of a new political faction advocating for change, has empowered Austin leaders to address the issue with renewed vigor. Following the failure of significant housing reform initiatives in the past, the Austin City Council is now embarking on a fresh endeavor to alleviate city constraints regarding housing development and location.
The prevailing belief is that the existing limitations hinder the city’s capacity to construct an adequate number of homes to address the overwhelming housing demand, consequently leading to elevated home prices and rents.
“The affordability crisis we face is of great magnitude and should be regarded as an urgent matter,” expressed Austin Mayor Kirk Watson to The Texas Tribune. “Our city is grappling with a challenge rooted in the imbalance between supply and demand, requiring us to explore innovative and unconventional solutions unlike those we have considered before.”
In order to encourage increased and compact housing, city officials have put forth several initiatives. These include permitting more single-family homes on smaller plots of land, constructing taller apartment buildings in close proximity to single-family residences, and eliminating requirements that developers allocate specific areas for tenant parking.
But these reforms will probably run into some familiar obstacles. For decades, efforts to loosen the city’s land-use regulations have run into opposition from homeowners fearful of neighborhood change, old-school environmentalists and anti-gentrification activists — even as policymakers increasingly backed the idea and the city’s housing woes mounted. A group of homeowners, deftly wielding state law to their advantage, persuaded a judge in 2020 to kill a major overhaul of the city’s land development code that would have allowed denser housing.
But as musicians, teachers, police officers and firefighters struggle to find affordable housing within city limits, Austin’s housing crisis is increasingly seen as an existential one.
Dianne Bangle, CEO of the Real Estate Council of Austin, questioned the future trajectory by asking, “If we resist change, where do you believe we will end up? What exactly are we safeguarding at that juncture?” She further pondered whether Austin aims to be inclusive for all or if it solely caters to those who wish to preserve their expansive homes and neighborhoods.
An unignorable crisis
City officials are being urged and supported by a well-coordinated and progressively expanding activist movement to increase the construction of housing.
Dozens of demonstrators gathered on the steps of the Travis County Civil and Family Courts Facility in downtown Austin one late August morning. They were protesting against a court challenge brought by a group of homeowners who aimed to terminate a well-liked affordable housing program and other housing initiatives. The demonstrators proudly displayed signs advocating for affordable housing and proclaiming that housing is a fundamental human right.
While employed at a nonprofit organization dedicated to assisting homeless single mothers, Anoosh Razian, a 34-year-old therapist from Austin, witnessed the detrimental consequences of the city’s housing shortage. She frequently observed these women facing difficulties in transitioning out of supportive housing due to the unavailability of affordable homes.
“If they had to, there would be no place for them to go,” Razian explained. “If they desire to leave the supportive housing, they would be required to relocate outside the city.”
Her husband, Edgar Handal, works as an engineer at a tech company and serves as a board member at AURA, a local organization in Austin that promotes the development of denser housing. According to him, they are fortunate enough to be able to afford a home in East Austin. However, they have observed that some of their friends have been compelled to relocate to distant areas outside the city due to housing affordability issues.
Handal expressed her reason for being present, stating, “My presence here is driven by my concern for the availability of housing for others, including my family and friends. It is unjust that in Austin, one should have to rely solely on the fortune of securing a high-paying job in order to afford a home.”
Housing costs in the Austin area rose dramatically in the past decade as the region transformed into a major tech hub and companies like Apple, Google and Oracle ramped up their presence in the city. The market kicked into overdrive during the COVID-19 pandemic as more than 120,000 people moved to the region and millennials sought to buy homes, sparking fierce bidding wars for limited housing supply.
Last year, the average home in the Austin-Round Rock area was selling for over $500,000, causing a significant number of potential first-time homebuyers to be unable to afford a home. A large portion of the region’s renters allocate such a substantial portion of their income towards housing that they face difficulties in meeting other essential expenses such as childcare, groceries, and transportation.
Housing unaffordability dominated Austin’s most recent citywide election, which brought new faces to the Austin City Council and solidified its pro-housing bloc. Observers say the City Council and Watson, who also took office this year, got a clear signal from voters to do something about the city’s housing crisis. Over the summer, council members gave their first stamp of approval to a slew of housing reforms.
“One of the new members, Austin City Council Member Zohaib “Zo” Qadri, expressed that he believes individuals are now witnessing the hurt, pain, and frustration, and it is regrettable that it took such a considerable amount of time to reach this juncture.”
Housing advocates place much of the blame for the crisis on the city’s land development code, which governs how land is used. The code hasn’t had a substantial overhaul since 1984, when Austin’s population was less than half its current size. Each time the city has tried to give it a significant makeover, homeowner groups have successfully killed those efforts.
One of the biggest criticisms targets the limits on the kind of housing that can be built. Much of the city’s residential land can only be used to build single-family homes. On top of that, Austin requires most single-family homes to sit on at least 5,750 square feet of land — a restriction known as a minimum lot size that research has linked to higher home prices. Those kinds of restrictions, real estate and housing experts say, lead to fewer homes and apartments being built — and higher housing costs as a result.
Adam Perdue, a research economist at the Texas Real Estate Research Center at Texas A&M University, explained that if densification is not permitted, it leads to a reduced availability of housing units. Consequently, this scarcity tends to drive up the prices of all housing units in the vicinity.
According to critics, the limitations have posed difficulties for Austin builders in fulfilling the housing needs.
The Austin-Round Rock region routinely ranked among the country’s busiest markets for housing construction during the pandemic years, according to A&M data. Even so, construction hasn’t kept pace with the growth in the number of households, data from the U.S. Census Bureau shows.
Awais Azhar, a member of the advocacy group HousingWorks Austin, expressed concerns about the escalating rents faced by our tenants, individuals aspiring to be first-time homeowners unable to access the market, and those who desire to age in place but cannot relocate to a more suitable housing option.
The city is short nearly 152,000 homes considered affordable enough for two-person middle-income households, a recent report from the Austin Board of Realtors shows — a shortage that’s even more drastic for families of four at that income level.
According to Emily Chenevert, CEO of the Austin Board of Realtors, individuals such as EMS workers, teachers, and firefighters have a strong desire to reside within the communities they serve, but unfortunately, this is often difficult for them to achieve.
In 2019, Claudia Cadena, a medic with Austin-Travis County EMS, and her husband purchased a two-story house on the Far West Side of San Antonio for approximately $180,000. The location of their new home is convenient as it is near Cadena’s parents who reside in nearby Lytle and frequently assist with childcare. However, the primary reason for choosing to buy a house in San Antonio was the couple’s inability to afford a home in the Austin region, according to Cadena.
Cadena, who commutes at least twice a week from San Antonio to her post near Austin-Bergstrom International Airport, expressed, “I had to choose between being able to afford child care or being able to afford a house.”
Many Austin-Travis County EMS employees have to commute long distances, with some residing as far as Killeen, approximately 70 miles north of Austin. Chief Robert Luckritz stated that nearly one in five employees live outside the immediate Austin-Round Rock area, mainly due to the difficulty of finding affordable housing nearby for medics and other EMS staff.
According to Luckritz, the distance poses challenges in promptly contacting individuals during emergencies. Additionally, it hinders the establishment of camaraderie and connection between workers and the community they serve. Luckritz further highlighted that the high housing expenses in the Austin region impede the recruitment of new employees and filling of vacant positions.
Cadena has been greatly affected by the distance she has had to endure. Years of enduring long drives, frequently accompanied by sleepless 24-hour shifts, have left her utterly drained. Despite the toll it has taken on her, Cadena has remained committed to her job due to the perks it offers and her genuine desire to assist others.
Cadena’s days of enduring long drives may soon come to an end. Her husband recently acquired his electrician license, giving Cadena the opportunity to quit her job in Austin and fully dedicate herself to establishing her budding tattoo practice.
Cadena expressed disappointment about Austin-Travis County EMS, saying, “I had hoped to retire from this place. However, the commute is too lengthy, and although I would love to stay, I can’t envision spending another 30 years here.”
More density, more homes
The housing crisis is not unique to Austin. By various estimates, the country needs to build millions more homes to meet the nation’s housing demand and slow the steep rise in housing costs.
A growing body of research has tied strict land-use rules to high housing costs — a conclusion embraced by the Biden administration as well as state and local policymakers across the country who have loosened zoning rules to try to juice their housing supply.
In recent years, cities like Minneapolis and Portland found some success in slowing down the rampant rise of housing costs. In 2018, Minneapolis officials enacted a series of zoning reforms — like allowing duplexes and triplexes to be built in areas previously reserved for single-family homes and getting rid of minimum parking requirements for new developments — that helped the city keep a tight lid on rental cost growth during the pandemic era, according to a recent study by The Pew Charitable Trusts. According to a recent Bloomberg report, the changes have even helped the city beat back inflation.
In the meantime, California, Oregon, Washington, and Montana have implemented comprehensive reforms at the state level to modify local zoning laws. These reforms aim to boost housing production and bypass resistance from elected officials and neighborhood groups.
Republicans in the Texas Legislature this year flirted with relaxing cities’ housing restrictions, to allow more homes to be built amid the state’s housing crunch, though those efforts ultimately failed. As GOP state lawmakers increasingly sap authority from the state’s bluer urban areas, some Austin leaders fear if they don’t loosen restrictions on how much housing can be built and where, state lawmakers will finish the job when they return to the Capitol in two years.
Now, the year after Austin became the 10th-largest city in the nation, city officials are pushing for similar solutions.
The most extensive proposals, which are expected to face strong opposition, involve permitting a wider variety of housing units in areas that are currently designated for single-family homes. Additionally, these proposals aim to significantly reduce the minimum land requirement for constructing housing on those lots.
The idea, pitched by Council Member Leslie Pool, would allow up to three housing units to be built almost anywhere single-family homes are currently allowed. It would also reduce Austin’s minimum lot size in the city’s three most common single-family zoning categories to 2,500 square feet. More than half of the cost of a single-family home in Austin comes from the land, according to a recent city-commissioned study. If would-be homeowners don’t have to buy as much land, the ultimate cost of the home won’t be as high, advocates argue.
According to homebuilders, Austin’s zoning restrictions not only impose limitations on the type and location of housing that can be constructed, but they also hinder the swift construction process, leading to increased home costs.
According to Austin homebuilder Scott Turner, it took him a total of three years to construct four homes on approximately a quarter-acre of land in the South Manchaca neighborhood. Despite the relatively large size of the plot, the zoning regulations restricted the number of units to only two. Consequently, Turner decided to subdivide the land, a procedure that required two years for approval from the city.
Had Pool’s proposal been in place, Turner said he would have built three homes instead of four — but they wouldn’t have taken him as long to build, which would have reduced the total cost of the project. The longer local governments take to approve housing projects, the more money homebuyers and renters also have to ultimately pay for that housing, studies show.
Turner, the former president of the Home Builders Association of Greater Austin, advised, “If you want someone to purchase a house, ensure it is affordable.”
Austin officials are eyeing other ideas to allow for more housing construction. A proposal pitched by Qadri would get rid of city rules that require new developments have a set amount of parking, which studies show lead to fewer housing units and drive up housing costs.
Another idea would ease the city’s “compatibility” requirements that limit how tall apartment buildings can be depending on how close they are to single-family homes. Austin has the strictest compatibility rules among peer cities, which “significantly restrict the development capacity for high-density residential housing throughout Austin,” a recent city analysis found.
Proponents argue relaxing the land-use restrictions will at least help slow the growth of the city’s housing costs and give more middle-class families a better shot at homeownership. Nearly three-quarters of households in the Austin region can’t afford a home going for the median sales price, according to the National Association of Home Builders.
According to Pool, if this proposal succeeds in retaining families in Austin and enticing younger families to settle down in Austin to raise their own families, it would be a positive outcome overall.
Pool’s proposal and the parking and compatibility initiatives were endorsed by council members during the summer, but their implementation is still pending. City staff needs to work out the details and logistics of each idea before presenting the finalized plans for council approval. The first vote is anticipated to take place in December.
A staunch opposition
There is a group of Austin homeowners who vehemently oppose any measures that would permit more compact housing, arguing that it would significantly and negatively impact the unique essence of their neighborhood.
They have successfully blocked every recent attempt to change the city’s land development code to allow denser housing, including a proposed zoning overhaul in 2018. When the Austin City Council tried again to make changes the next year, a group of homeowners won a court battle to stop them.
Frances Acuña, the homeowner at the center of the legal dispute surrounding the modifications, is determined to protect herself and her neighbors from being forced out of their homes due to the proposed zoning reforms. Acuña has resided in her house in Dove Springs, a primarily Latino community in Southeast Austin, for over ten years, and it is where she raised her three sons.
Home prices in the area have accelerated sharply during that time: The typical home went from less than $126,000 in the early 2010s to almost $400,000 in January, according to Zillow data. A 2018 report from the University of Texas at Austin deemed her neighborhood “more vulnerable” to gentrification and displacement because of its higher proportions of people of color, residents without higher education and renters, among other factors.
Acuña, a climate advocate and organizer with Go Austin/Vamos Austin, a community health coalition, expressed concerns about their future. At 52 years old, they pondered how much longer they would be able to work and the possibility of not having a home. An uncertain future left Acuña wondering where they would go and how they would manage to survive.
Acuña teamed up with 18 other Austin homeowners in 2019, who have owned their homes for a long time, and some of whom have experienced a significant increase in their home values, surpassing $1 million due to the booming housing market in the area. Together, they filed a lawsuit against the city of Austin.
The homeowners claimed that Austin officials violated state law as they did not provide formal notification to homeowners regarding the citywide zoning overhaul, as they would have to if a neighboring property owner sought to rezone their land. They also asserted that the city disregarded a state law that mandates a supermajority approval from the City Council for rezoning, in case enough neighbors protest against the change. However, the city’s lawyers argued that neither law is applicable when a city undertakes a land development code overhaul.
A Travis County judge, whose decision was later upheld by an appeals court, sided with the homeowners in a ruling that is likely to complicate zoning code reforms in other Texas cities. Despite subsequent attempts by the Texas Legislature to repeal the laws referenced in the neighborhood groups’ lawsuit, these efforts were unsuccessful.
Afterward, Austin authorities gradually implemented smaller zoning reforms aimed at boosting housing availability. Recently, the council approved new regulations that permit developers to construct housing in commercial zones and denser housing along transit corridors.
Nevertheless, the very landowners who hindered previous attempts at citywide rezoning have now targeted these proposed changes, including a city affordable housing program implemented by the council in 2019, which has successfully generated numerous affordable housing units.
Dubbed Affordability Unlocked, the program eases rules like height restrictions, minimum lot sizes, parking requirements and density limits if builders set aside half of a development’s units for households making less than the city’s median family income. The program has proved to be an effective driver of affordable housing and is already helping produce more units than other local affordable housing programs, according to a recent report from the Urban Institute. Of the nearly 7,700 ownership and rental units approved under the program since it began in 2019, the report found, more than two-thirds are affordable for households making 80% of the median family income and below.
According to Austin ethics lawyer Fred Lewis, who is among the landowners suing the city, the intention behind blocking the program and other initiatives is to ensure that the city does not infringe upon homeowners’ rights, despite the positive aspects of the program.
Lewis expressed that the home holds immense value for the majority of working-class and middle-class individuals. It serves as their most significant asset, representing not only financial worth but also their connection to the community and neighborhood. Therefore, it deserves utmost respect.
Some individuals view the implementation of restrictive regulations on housing development as a means to safeguard their communities against gentrification and displacement.
After witnessing the gentrification of East Austin over the past decade, some fear that clearing the way for more housing construction will accelerate that process in the city’s low-income neighborhoods and oust Black and Latino residents who live there. There remains deep skepticism that allowing the market to produce more housing will moderate housing costs — despite a growing body of evidence to the contrary.
During a July meeting, a concerned resident addressed the Austin City Council, describing Pool’s proposal as a provision that facilitates gentrification. The resident emphasized that the proposal would only result in an increase in luxury condominiums, without addressing the pressing issue of affordable housing.
Whether allowing more market-rate construction leads to displacement of low-income homeowners and renters has been difficult for researchers to prove. Recent research shows that allowing more market-rate housing eases housing costs around that development and across the broader region. Allowing more construction means the crushing demand for housing in the region won’t fall just on existing homes; more housing units mean more places for demand to go, thus moderating prices, research shows.
Jake Wegmann, an associate professor at UT-Austin’s School of Architecture who specializes in housing affordability, suggests that when individuals become upset at the construction of a luxurious condominium, they should consider the positive aspect of it. He highlights that such buildings attract affluent buyers who would otherwise invest their substantial financial resources in existing homes or the current housing market.
According to experts, constructing market-rate housing in gentrifying neighborhoods in cities such as Austin, where there is a high demand for housing, a shortage of available units, and stringent regulations on housing development, can potentially lead to displacement. To mitigate this risk, Claudia Aiken, the director of new research partnerships at the NYU Furman Center and Housing Solutions Lab, suggests allowing increased density throughout the city, including in single-family neighborhoods that are less susceptible to gentrification, and constructing more affordable options like townhouses and duplexes.
Aiken emphasized the significance of having adequate housing in order to avoid displacement, stating that building housing is essential. The only matter to address is determining the suitable locations and methods for construction.
What’s more, loosening citywide zoning restrictions could shield low-income neighborhoods from gentrification and displacement. A recent Furman Center paper found that in the decades after Houston relaxed land-use restrictions to allow more housing units on smaller lots, the places where townhouses replaced traditional single-family homes mostly took place in wealthier neighborhoods or in parts of town that already had gentrified, though some of that development has taken place in poorer neighborhoods like the Fifth Ward.
“The process doesn’t involve transforming the entire city into townhouses overnight just by changing the zoning,” explained Wegmann, the author of the paper. “That’s simply not the way it operates. It progresses gradually, over a prolonged period of time.”
Those in favor of the Austin proposals are eager to highlight the fact that the displacement experienced by East Austin occurred under the existing code.
The housing affordability advocates expressed their outrage during the August protest, as they strongly opposed the decision to terminate the Affordability Unlocked program.
“Opponents of affordable housing couldn’t win this fight in the court of public opinion,” said U.S. Rep. Greg Casar, an Austin Democrat who authored the Affordability Unlocked proposal when he served on the Austin City Council, noting that the program passed unanimously. “So now they’re trying to use the courts to try to block the overwhelming majority of Austinites who want to see housing prices come down in the city.”
The program’s opposition was hurtful, according to Nicholette Lindsay, a 41-year-old Army veteran residing in one of the affordable units provided by Affordability Unlocked.
In 2015, Lindsay was evicted by her landlord due to her inability to pay rent after being laid off by a Microsoft supplier. This unfortunate situation left her and her son with no choice but to seek refuge at a Salvation Army shelter. However, their circumstances improved the following year when they were able to secure a new apartment through a city program designed to provide housing for homeless veterans.
She mentioned that the affordability of the housing complex, established under the Affordability Unlocked program, has enabled her to remain in the city as she manages her private security firm. This year, she and her son relocated to the complex.
Lindsay emphasized that affordable housing is not just a lifeline, but a life-saving measure, and wished that program opponents could comprehend its significance for individuals.
Disclosure: Apple, Google, HousingWorks Austin, Microsoft, Texas A&M University and University of Texas at Austin have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.
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