Austin Business Journal writes, "Off a quiet road in South Austin, a homebuilder is trying something new to bring more and less expensive housing to the city.
Ash Creek Homes is using the city's Home Options for Mobility and Equity ordinance — known as the HOME ordinance — to build 28 detached homes on a 2.4-acre property with 10 residential lots. The location is on Drew Lane near the intersection of Slaughter Lane and Menchaca Road.
The goal of the project is to see if building a mid-sized housing development under Austin’s HOME ordinance will result in more homes at cheaper prices, said Jenna Edge, president of Ash Creek Homes. She said the company bought the property before the HOME ordinance was approved, with the hope of using the ordinance to build more homes at the site.
“I'm very proud to say that this project is under the HOME ordinance, and that it can be like a showcase project for the city,” Edge said. “For the city to say, ‘Look, this works. Since this builder was going to be building duplexes in the ($600,000 to $700,000 range), and now they're building detached houses in the four hundreds."
Ash Creek plans to sell the 28 homes, all of which will have two bedrooms and two and a half bathrooms, in the $400,000 price range. Edge said the HOME ordinance is probably cutting $200,000 off the prices of the homes on the property. That's because Ash Creek still would have built about 20 homes on it if the HOME ordinance hadn't been approved — but they likely would have been in the $600,000 range.
What is the HOME ordinance?
The HOME ordinance updated the city's building regulations to encourage construction of more and smaller homes, thus making them less expensive and helping to alleviate Austin's housing affordability crisis. The ordinance was passed by the City Council in two phases.
The first phase was approved in December 2023 and enabled builders to build three units on a single residential lot, while the second phase was approved in May 2024 and allowed for a reduction in minimum lot sizes to 1,800 square feet and a single residential unit to be built on them.
The city has reviewed 571 building applications proposing to build a total of 892 units under the first phase of the HOME Ordinance. Of those applications, 448 have been approved, according to the city. Under the second phase of ordinance, 25 applications proposing 25 units have been filed, with 21 of the applications approved so far.
Ash Creek is using the first phase of the HOME ordinance to build its 28 homes on Drew Lane.
Where do the savings come from?
The main savings that the HOME ordinance has provided Ash Creek has come in the form of land costs, Edge said.
“The value of one lot, instead of dividing it across two homes, you're dividing it across three,” she said. “So there's huge savings there.”
Other builders agree. Carr Residential, which focuses mainly on building projects on single lots, also said the HOME ordinance has made it easier to sell homes at lower prices.
“We've been able to bring homes to market on sites where we're able to fit three homes at a cheaper price than where we would only be able to build one or two homes,” said Cody Carr, a partner at Carr Residential.
He estimates that his undertaken six to seven projects using the HOME ordinance, but only on single lots or infill sites that can accommodate three homes. Both Carr and Edge said the bulk of new houses added to Austin as a result of the ordinance probably will be built on single lots and in-fill rather than on large undeveloped properties, since navigating the city’s subdivision process remains a costly endeavor.
Carr, who is a board member of the Austin Infill Coalition, said building under the HOME ordinance also makes sense on larger in-fill lots since fitting three homes on standard-sized lots can be a difficult.
“So the 9,000- to 10,000-square-foot lots, that's where it starts to feel more comfortable and make sense,” Carr said.
But Edge said a sweet spot for doing larger projects under the HOME ordinance could come with properties that range from half an acre to three acres in size and have already been subdivided.
She noted that the homes being built at Drew Lane are still a bit more expensive than her company initially hoped because it wanted to offer them in the $300,000 range. But due to prices in the construction market and city fees, that wasn’t feasible, she said.
“The fees are just really, really high — the impact fees, the park fees, you name it, subdivision review fees — they really stack up,” Edge said.
Could improvements be made to the HOME ordinance?
Both Carr and Edge said that, so far, developers appear to be embracing the HOME ordinance. Still, Carr said it could use some tweaking to make it more popular. He pointed to a letter sent by the Austin Planning Commission at its Sept. 2 meeting to the City Council, which outlined changes that could improve the process, such as eliminating contradictions in city code, updating how Austin Energy and Austin Water treats such projects and reducing approval times.
Edge said Ash Creek ran into some challenges in planning and building under the HOME ordinance on Drew Lane. But they were resolved without too much difficulty after the company sought help from the office of City Council Member Ryan Alter, whose district encompasses the Drew Lane project.
Will Ash Creek do another HOME project?
Demand for the Drew Lane homes will soon become clear with sales set to open in a few weeks, Edge said. Ash Creek started construction for in January and is close to opening the first three homes, with all 28 expected to b finished by the end of 2026 or early 2027, she said.
How sales go ultimately will help determine if Ash Creek continues to pursuing projects under the HOME Ordinance. The company typically focuses on projects that add 20 to 50 homes, and it works on one to three projects at a time.
“We certainly could have built one house on each lot and price those each at a million dollars,” Edge said. “But I really hope that builders see the value and like the spirit behind the ordinance, like the idea, (which) was to provide more affordable housing in the city of Austin.”"
Source: Austin Business Journal
Written by: Sean Hemmersmeier
Published: October 6, 2025
Posted by Grossman & Jones Group on
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