- Austin is on pace to have the least affordable housing in the country outside of California.
- As a result, developers keep building housing communities farther and farther from the city center.
- The Austin City Council seems to want to start to fix the issue – but its unclear if they know how or have the votes to do so.
This week we are coming back to a popular topic in this blog – the rising costs of Austin’s residential housing market. I know we have talked about it a lot – but it’s a very important issue. Indeed, its hard to walk anywhere around Austin without discussing the increased housing costs.
There were a couple new developments this week that affect the market. And, as a result, I thought it was a good time to briefly discuss it again. In this week’s entry, therefore, we talk about the current residential market, what the City Council wants to do about the rising costs, and what they should do.
Current Housing Environment
This week Zillow released a new housing affordability study. And the news out of Austin is not great – unless, of course, you are planning to sell your house and leave the area. According to the report, the typical new homebuyer in Austin will spend 30.1% of their income on their mortgage by December. This would make Austin metro’s housing market the least affordable in the country outside of California.
I obviously do not have to explain that this is not great news. The obvious and predictable result of this is that people are moving farther and farther from the city center – where many jobs are. For example, Townbridge Capital and Dream Finders Homes announced that it has been approved for and will soon start construction of 131 residential lots in Taylor. And it has plans to build up to 316 more homes in a second phase of construction.
The developer specifically stated that Round Rock and Pflugerville were becoming “oversaturated” for folks looking to build homes outside of Austin. Again, this is all a direct result of the unaffordability of Austin housing.
Can it be Controlled?
But what can be done? We have talked about this so many times before in this blog that I am sure you know what my answer will be. But what I think does not really matter. Fortunately the Austin Business Journal recently asked City Council members what they would like to see change in the future.
As we have also discussed many times before, Austin attempted to completely revamp its building code to provide more opportunities for higher density housing. But local neighborhood groups sued the city and won. As a result, any changes to the outdated code are on the backburner for the foreseeable future.
But those difficulties do not seem to have changed the City Council members’ goals. According to the ABJ article, most of the members want to change the code to enable more density along transit corridors, alter parking requirements to require fewer spots, and streamline the development process. The problem, of course, is this currently cannot be done with one big revamp of the building code. So it has to be done on a more piecemeal basis – at least until the final result of the lawsuit is determined. The Council seems to be split on whether this is worthwhile to do in pieces. It will likely require a 9 vote supermajority – and its not clear if that can be attained.
I am sure you are tired of reading me write how increased density will help solve Ausitn’s affordability problem. Therefore, I will not rehash the reasons for this – but building more livable/workable areas with higher density will help foster a better overall city. But to get that done will take some strong, civic minded council members to make the right vote. We will see in the coming year if Austin currently has those members on the dais.