“We knew it was coming,” Francisco Nuñez says. Housing is in such high demand in Austin right now that Nunez wonders if he can afford to stay in the city.
In 2020, Austin gained an average of 180 new residents a day, causing a shortage of homes and driving up home prices dramatically. This demand, combined with such short supply, has affected people like Nunez, who lived in the Cactus Rose Mobile Home Park until was sold to developers to build apartments–apartments that cost renters more than double what Nunez had been paying.
Over the last decade Austin has benefitted from an environment conducive to business growth. The University of Texas attracted young talent and several high-tech firms and startups made the Texas Capital their home.
It has reached crisis levels in the Lone Star State’s capital.
As more people come to Austin the supply of homes has been generally constrained through bureaucratic processes and strict land-use regulations pushed by local progressive politicians. The inability to allow supply to meet demand has, quite naturally, put upward pressure on home prices.
Last month, it was reported that the median home sale price in Austin was nearly $600,000, driven up by both the demand for housing and the inability of developers to keep up with it. Meanwhile, the average homeowner’s property tax bill is expected to be more than $9,200 this year, even while median household income is only around $80,000, according to the latest available data from the Census Bureau. There’s an obvious issue here involving the cost of housing, the cost of government, and the average family’s ability to afford it all.
But there may be at least a small glimmer of hope on the horizon.
Last week, the city of Austin passed a resolution directing the city manager to “propose amendments that reduce the minimum lot size in single-family zoning districts to 2,500 square feet or less, which would allow existing lots to be subdivided.”
The resolution sparked outrage among the NIMBY (“not in my backyard”) types who fantastically believe they ought to have control over other people’s property. But it passed by a margin of 9 to 2, signaling that even devoted Austin progressives understand the harsh environment they’ve created, and are working toward undoing some of it. The resolution also provides the opportunity for developers to build at least three units per lot. Such a change will enable a greater amount of housing supply to come online, which will hopefully help ease the affordability crisis somewhat.
Of course, Austinites should expect to hear a litany of complaints trotted out by the NIMBYs in the time between now and when the city manager finally comes forward with his official recommendations to dramatically reduce lot size requirements.
If history is any guide, these complaints will probably center on two themes. First, they’ll likely claim that lowering the city-mandated limit is unfair since it may lead to changes in the character of their neighborhood, which is not a quality that government should be regulating in the first place.
Second, they’ll probably claim that reducing the minimum lot size requirement could create issues involving gentrification and the pricing out of low-income families. But neither is this a reason to involve government—since over-reaching policy created this situation in the first place, and families like Nuñez’s are already being priced-out under the status quo.
If we look at this issue objectively, it’s clear that this will help, not hurt, the affordability crisis brewing in Texas’ capital city. And, in fact, it holds promise for other major urban centers too, if the political will exists to take it on in similar fashion. Assuming things stay on course, People like Francisco Nuñez who have struggled through inflation, recession, and high taxes may soon have a wider array of options to choose from when it comes to buying a home.
That’s something we should all celebrate.