Density proponents encouraged by HOME six-month progress report

The city of Austin’s Development Services Department has released its six-month report on the early outcomes of the Home Options for Mobility and Equity (HOME) Phase 1 initiative.

A memo released last month by José G. Roig, director of DSD, analyzed the early results of the initiative, which took effect in February 2024 and was created to increase housing supply by allowing up to three units on single-family lots. City Council also adopted incentives for preserving older structures as part of the initiative.

According to the report, 159 residential development applications were submitted under the new rules, with 99 receiving approval. Two-unit developments accounted for the majority, with 72 of 103 applications approved. However, tiny homes – highlighted as a potential solution to housing shortages – received no applications during this period.

The report also noted limited use of the Preservation Bonus program, designed to encourage retention of structures over 20 years old. Only two applications utilized the program, both in District 1, preserving an average of 91 percent of the original structures. City staff have flagged the bonus program for review to boost participation and outcomes.

Demolition permit applications, a key indicator of redevelopment trends and one of the biggest concerns of opponents of the initiative, showed little variation compared to the six months prior to HOME’s implementation. Between February and August 2024, 214 demolition applications were submitted, slightly fewer than the 222 recorded during the previous period.

On housing size and density, the initiative saw approved projects averaging 1,719 square feet per unit and a mean floor area ratio (FAR) of 0.48 per site, indicating moderate use of allowable density under the new guidelines. Most units fell within the 0.15 to 0.25 FAR range, suggesting development is skewing toward medium-density housing rather than more compact designs.

Former City Council Member Leslie Pool, who helped to steer both phases of the HOME initiative beginning in late 2023, said the early data show signs that the city could add substantially more housing in the years to come.

“Six months is just a small sample, but the bottom line is it’s a very hopeful peek at what we may be able to expect in the future for these changes,” she said. “That was exactly what I was looking for, … gentle infill density to be permitted across the city.”

The memo noted an expanded set of data on HOME’s first phase will be released sometime after Feb. 5, with a close look at small-lot, single-family-use applications, which were made available as of Aug. 16 last year.

Austin Board of Realtors will work with the Housing Department to track cost data for home types relevant to HOME, with the city also working with Travis Central Appraisal District to track the values of existing housing stock.

Pool said the metrics she and others concerned about housing prices want to study are tied to rapid spikes or drops in housing prices.

“What’s most helpful just across the board for everybody, no matter which side of the property acquisition or sale line you happen to be on, is predictability and stability,” she said. “When the numbers start spiking – and they were spiking like mad all across the country during the pandemic – that sort of thing takes a while to settle down and for the course corrections that happen. From what I’m gathering, things are stabilizing, and it does feel hopeful.”

Council Member Chito Vela said the mean dwelling size of 1,700 square feet shows a move away from the “McMansion” approach to building that had been the norm for roughly two decades, even as the city moved in recent years to allow smaller accessory dwelling units on those lots.

“This is a very strong sign of the pent-up demand for just better-situated, better-oriented, single-family homes,” he said. “The geographic balance just kind of jumps out at me. We’re seeing HOME applications spread all over the city, whereas before because of the SF1, SF2 restrictions we only ever saw ADUs in SF3 parts of town.”

Previously, HOME-eligible projects were seen only in East Austin where there were larger numbers of SF3 parcels.

Vela also said he supports the likely revisions to the Preservation Bonus program, which Council is likely to discuss and take action on by next month.

“We had passed a preservation bonus but it wasn’t quite, I think, fully baked when it was passed,” he said, adding he thinks the bonus should be more substantial as a primary way to encourage enrollment.

“We’re going to be looking at … where you really do get a full-on bonus where if you’re preserving the existing home then you can add two or three units to the lot and you’re not losing basically kind of building capacity, you’re not losing overall square footage because of that,” he said. “No one likes to see an existing home torn down. They like the neighborhood, they like continuity, they like to see places they recognize. The added housing will be better if it’s sitting in with existing housing and not teardowns.”

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