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Austin readies to greatly reduce the amount of land needed to build a home

Pavel Mezihorak for KUT
The Austin City Council could change the minimum lot size needed to build homes across the city.

In an attempt to encourage the building of smaller and cheaper homes, Austin leaders are angling to lower the amount of land required to build a house.

On Thursday, the City Council will vote on a resolution to start the process, although it could still be years before changes go into effect.

“This is a simple and elegant way to make it possible for homeowners who are being priced out to be able to stay in their homes,” Council Member Leslie Pool, who is spearheading the resolution, told KUT. “We have programs for people who have low salaries, but we don’t have a lot of options for those who earn enough to be OK (but can’t purchase a home).”

Throughout cities, land codes dictate not only what you can build and where, but how tall and wide offices or homes can be. Among these rules is what is called the minimum lot size, which sets a floor for how much land an owner needs in order to build.

The majority of Austin is zoned so that you need at least 5,750 square feet to build one home. The resolution would drop that minimum to 2,500 square feet and allow owners to build up to three homes on each lot.

The land could also be subdivided. If someone owns a 10,000-square-foot lot, they could divide that into four lots and, theoretically, build three homes on each, totaling 12 houses.

These changes, Pool said, come in response to the incredible rise in housing costs in Austin.

“The status quo of limited options is not sustainable, in which middle-income earners choose between one type of single-family home on a large, expensive lot or a luxury condo on a corridor,” she said. “We can do so much better for teachers, first responders, small business employees, government workers and nurses, who all have great jobs but can’t afford to invest in our city.”

Since 2018, the cost of buying a home in Austin has risen more than 50%. Despite the damper rising mortgage interest rates has put on the housing market, prices in Austin are still out of reach for many middle-income earners. Last month, homes in the city sold for a median price of nearly $600,000.

Many housing experts argue that the driving force of rising housing costs is a lack of homes for the people who want them. In addition, bigger homes and bigger plots of land cost more. Elected officials in Austin tried to amend the code to allow for more housing to be built on smaller lots, but that effort failed in 2022 when the city lost a legal battle over the process.

Now, council members are attempting to make changes piecemeal.

In May, the City Council nixed the rules on minimum parking mandates citywide, incentivizing builders to use that space for housing instead. A month later, the council approved a plan that would allow taller buildings within at least 100 feet of a single-family home.

Several other cities like Houston, San Antonio and San Diego have already made changes like this to help families of all incomes obtain homeownership. Reducing the size of home lots allows builders to produce smaller homes — townhomes, triplexes, fourplexes and cottages — that are more attainable for those earning in the middle-income bracket.

A study of similar changes in Portland, Oregon, found that for every 10% reduction in lot size, new homes sold for about 2% less and existing homes for about 3% less. Researchers found that the size of the home, more than the lot size, more greatly reduced the cost.

Pool said the proposed changes to minimum lot size will allow “organic, gentle, densifying” of single-family neighborhoods at a slower pace than if a major developer bought a bunch of lots and built apartments on them.

But it will likely take years before this is actually something that will show up in neighborhoods.

Scott Turner, owner of Riverside Homes and an urban homebuilder, said there are still some barriers the city will have to overcome in regards to building rules.

He said there will have to be discussions about drainage, height restrictions and parking requirements, and how these all fit together.

“Without these discussions and changes, this is more style than substance in terms of impact,” Turner told KUT. “But I do think this is a step in the right direction. … We have to figure out how to get more housing because this is about homeownership, and homeownership helps build wealth.”

Pool appears to have the votes to pass the changes to minimum lot size Thursday, with support from Mayor Kirk Watson and at least three other council members. Only Council Member Alison Alter, who represents much of West Austin, has spoken against these changes.

“I don’t think we fully understand the consequences,” she said at a public meeting Tuesday. “I want to be clear that I am open to offering a range of smaller lot sizes but to offer that option is very different than unilaterally doing what this resolution initiates."

Alter almost certainly will not be the only dissenting voice at the council meeting Thursday. These land code changes, as those that have come before, will likely face significant backlash from residents.

In 2019, a group of nearly two dozen property owners sued the city over the process it used — or rather, failed to use — when revising the land code. Ultimately, a Houston appeals court upheld a ruling against the city and the land code revision died.

These same homeowners have since asked a judge to enforce this ruling and overturn several rule changes from the City Council that allow developers to build taller, including a program that requires builders to make 50% of the housing they build affordable to low-income people.

If the city adopts lower minimum lot sizes, it's possible not all neighborhoods would be affected equally. Many neighborhoods, particularly in West Austin, have deed restrictions, or restrictive covenants. These private contracts, which run with the land, lay out rules each owner has to follow when they buy a home.

It’s common for these documents to designate a minimum lot size, often 5,750 square feet. Neighbors can enforce these rules through lawsuits.

Pool said this is just the beginning of the conversation, and there will be multiple opportunities for public input over the coming months.

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Luz Moreno-Lozano is the Austin City Hall reporter at KUT. Got a tip? Email her at Follow her on X @LuzMorenoLozano.
Audrey McGlinchy is KUT's housing reporter. She focuses on affordable housing solutions, renters’ rights and the battles over zoning. Got a tip? Email her at Follow her on Twitter @AKMcGlinchy.
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