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Austin looks into plan that would give residents financial help to build backyard apartments

Jorge Sanhueza-Lyon
The Austin City Council is looking to create a financial assistance program for property owners who want to build a backyard apartment.

Austin is trying to make it easier for more families to be able to build additional homes in their backyards, or what are sometimes referred to as accessory dwelling units or ADUs. The prospect can be costly and daunting.

On Thursday, the Austin City Council took the first step in creating a financial assistance program to help low- and moderate-income residents with a down payment to build these homes.

Some residents have used backyard apartments for their parents or children. But the homes are also used to generate income for families as rentals.

Council Member José Velásquez told KUT that the need for more affordable housing is one of the city's most pressing issues. The hope is this program will help create more diverse and affordable options, therefore preventing displacement.

“I believe we as a dais can be pro-housing and anti-displacement and ensure that no one is left behind,” he said.

The move comes a week after the City Council voted to amend its land rules to create more middle-class housing. The changes have been coined HOME, or Home Options for Middle-Income Empowerment.

“I am very proud of the work this dais has accomplished and the sense of urgency we’ve moved to make Austin more affordable for all,” Velásquez said during the council meeting Thursday. “This is an ongoing effort and I will continue advocating for collaborative and innovative solutions to Austin's affordability crisis, because our city needs us.”

This is not the first time the city has looked at how it can reduce barriers for people who want to add another home on their property. In 2020, the city looked into giving families low-interest loans and tax breaks. It also called for streamlining the permit process.

Critics of the proposed financial assistance program say low-interest rates and tax breaks are really the key. Carmen Llanes, the executive director for Go Austin/Vamos Austin, said these incentives would help make sure the program truly creates affordable housing and prevents displacement.

“People who are property-tax burdened, they’re not in a position to incur a bunch of debt that they have to pay back right away,” she said, “and that certainly doesn't incentivize them to rent anything out for cheap.”

She said the program should also include a component that requires some type of affordable housing.

“Without that [affordability component] we shouldn’t even be talking about how this would create affordable housing,” Llanes said.

Thursday’s vote directs the city manager to come back in March with a plan for the program, including looking at the city’s previous efforts to offer low-interest loans and tax breaks, and streamline the permit process. A second vote is needed to make the program final.

Luz Moreno-Lozano is the Austin City Hall reporter at KUT. Got a tip? Email her at Follow her on X @LuzMorenoLozano.
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