AUSTIN, Texas — The Austin Board of Realtors (ABoR) has released a report showing how a proposed zoning change could impact the housing market.
The Austin City Council is considering whether to approve Phase 2 of the HOME Initiative, which would reduce the minimum size of single-family lots from 5,750 to 2,000 square feet or less.
The ABoR found that the change could lower home sale prices. For example, a home that sold for Austin's median sales price in 2023, $540,000, could have an estimated $477,313 sales price if the home is allowed to be built on a 2,000-square-foot lot instead of a 5,750-square-foot lot.
If both the lot size and the size of the home are reduced, homeowners could save even more. ABoR said given a 50% decline in lot size, if the square footage of the home also declined by 25%, the price of a new home would decline by around 24.1%.
Broadly, reducing the minimum lot size for a single-family home has the potential to increase the housing supply by allowing more homes on existing lots, ABoR said. The board's analysis estimated that between 87 and 871 new homes could be built annually as a result of reducing the minimum lot size by allowing two homes to built instead of one on current lots.
"While the full potential impact of this initiative may take several years, it represents a crucial step towards enhancing housing affordability," Emily Chenevert, CEO of ABoR, said. "It’s not just about addressing the current housing crisis; it's about laying the groundwork for a future where Austin remains an inclusive, vibrant community where everyone has the opportunity to thrive. From first-time homebuyers to existing homeowners, young people to older adults and essential workers to professionals, these changes stand to benefit us all."
Last week, the Austin City Council heard feedback from the public about Phase 2 of the HOME Initiative. Phase 1 was passed back in December.
Supporters of the initiative say it's necessary for affordability, while opponents are concerned about developers taking advantage of the policy and how it could affect neighborhoods.
Residents who wish to weigh in can attend an open house Wednesday, April 17, from 6 to 8 p.m. at the Austin Central Library on West Cesar Chavez Street. Other open houses will be held between now and when the council votes on the changes, which could happen in May.
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