Austin Business Journal writes, "Austin has a housing crisis with a lack of housing considered affordable to the majority of its residents. Professionals including teachers, EMS workers, firefighters and recent college graduates are being priced out of the communities they serve. Increasing mortgage rates, elevated home prices and limited inventory of affordable homes are some of the barriers to homeownership in Austin, particularly for would-be first-time buyers. To afford a $540,000 home, Austin’s median sales price in 2023, a household must make $180,000. This makes it extremely difficult for many to purchase a home here, driving them out of Austin and into the suburbs. The bottom line is that homeownership is unaffordable and unattainable to many Austinites.
To address persistent affordability challenges and expand housing options, it is imperative for elected officials, policymakers, and our community to review and revise existing land use regulations. Updating outdated regulations can help increase housing diversity and availability throughout Austin so working families can afford to live in the city. That’s exactly what the Austin City Council is doing by considering reducing the minimum lot size for single-family lots from the current 5,750 square feet to 2,000 square feet or less. Reducing the minimum lot size for single-family homes has the potential to greatly decrease the price of homes and increase the housing supply.
In a recent report released by the Austin Board of Realtors, ABoR Housing Economist Clare Losey, Ph.D., found that there are two possible ways reducing the minimum lot size can help improve housing affordability in Austin. On average, an estimated 15%-20% of the price of a new home can be attributed to the cost of purchasing the land and another 55%-60% to construction costs. Reducing the minimum lot size requirement — and therefore allowing for larger lots to be subdivided — would effectively lower the cost of the land for a new home sited on a subdivided lot, ultimately reducing the price of that new home and leading to more attainable housing options for buyers. Losey’s research estimates an 11.6% decline in home price if the home can be built on a 2,000-square-foot lot instead of the current minimum lot size of 5,750 square feet, due to just the cost of the land.
The second way that reducing the minimum lot size could help improve housing affordability is through its ability to increase our housing supply. By reducing the minimum lot size, more lots become available for building single-family homes, thereby increasing the overall supply of homes. Losey’s research estimates that between 87 and 871 new homes could be built annually as a result of reducing the minimum lot size by allowing two homes to be built instead of just one on the current 5,750-square-foot lots.
This May, Austin City Council is scheduled to vote on reducing the minimum lot size for single-family lots to allow for more housing options and for homeowners to generate additional income by allowing them to subdivide and sell a portion of their lot. It’s important for the council to approve these types of land use changes as they will help lay the foundation for a future that ensures Austin will be an open, vibrant and inviting community where everybody has the opportunity to establish a life.
From first-time homebuyers to existing homeowners, young people to older adults, and essential workers to professionals, these changes stand to benefit all. Young adults who grew up in Austin could afford to continue to live in the city. Professionals like nurses, firefighters, and teachers could live in the communities they serve. Austinites looking to downsize could find more affordable housing options in their community. Approving housing-related reforms that allow for more small homes and townhomes will support transit and foster more walkable and connected neighborhoods, which are vital to a thriving and vibrant city.
The change will not happen overnight but can help create a more attainable Austin, so we must act now. Together as a community we can advocate for the city to take the necessary steps that will allow for a future where everyone can afford to call Austin home. ABoR supports reducing the minimum lot size for single-family homes in Austin and we are asking our community to support these housing reforms to help increase the amount and variety of Austin’s housing stock. The biggest harm we can do to Austin is to do nothing. We urge you to engage with your city council members to advocate for this change. Let’s stand together to keep the talent and energy of all Austinites who have helped make our city what it is today."
Source: Austin Business Journal
Written by: Emily Chenevert
Published: May 13, 2024
Posted by Grossman & Jones Group on
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