How Austin HBA Engaged in Transformative City Code Reform

In the pursuit of housing affordability, urban planners and policymakers are increasingly turning their attention to innovative solutions that challenge traditional land use policy and zoning norms. The nexus between increased housing density and reducing the upward pressure on housing costs caused by limited supply has led to strategies such as the HOME Initiative in Austin, Texas.

Austin is the fastest-growing metro area in the country and is struggling to keep up with the demand for housing. With a median home price of $639,000 (up from $240,000 just 10 years ago), a population of 1 million people, and years of city council resistance to more flexible zoning regulations, the lack of affordability has dramatically impacted the livability of the Live Music Capital of the World over the last decade.

In response to these challenges, the Austin City Council passed updates, entitled the Home Options for Middle-Income Empowerment (HOME) Initiative, to the city’s Land Development Code in December 2023.

HOME was broken into two parts to be considered in separate council meetings over the course of a few months. Phase 1 allows for three units by-right on any single-family lot, while Phase 2 reduces the minimum lot size and allows for additional flexibility with setbacks, height and other design standards.

Other major changes to the city’s code include:

• Allowing Up to Three Units: Increasing the number of homes allowed on single-family lots to three units gives home owners the ability to provide on-site housing options to family members and/or a caregiver, or earn additional income.
• Including Tiny Homes: By making it easier to install a tiny home, the city provides home owners with an accessible and affordable way to add a small house to a property.
• Creating Preservation and Sustainability Bonuses: The city is saving existing homes that conserve neighborhood character and helping to keep materials out of area landfills by providing incentives.
• Encouraging the Creation of Smaller Homes: The city regulates of the size and scale of houses while promoting smaller “starter homes” for home buyers.

Throughout the process, the Home Builders Association (HBA) of Greater Austin helped organize a diverse coalition made up of not only housing advocates such as the Austin Board of Realtors and the Real Estate Council of Austin, but also organizations such as AARP, the Austin EMS Association, CapMetro (Austin’s local transit authority), and many others. NAHB’s State and Local Issues Fund was utilized to develop and execute a public awareness digital campaign targeting renters and young voters.

The coalition has reorganized in anticipation of HOME Phase 2, which will reduce lot size and adjust design standards. It is currently under consideration by the city council, with a final vote expected in May.

Recently, Austin has made news headlines for stagnating and even declining rental costs — not solely because of housing construction but it does underscore the impact of initiatives between the city and the HBA of Greater Austin. By leveraging strategic land use policy adjustments, this partnership serves as a blueprint for other rapidly expanding cities across the United States, offering valuable insights into managing growth while addressing housing affordability.

To learn more about land development, visit NAHB’s Land Use 101 toolkit.

To learn more about how zoning reform and other key policies can help solve the housing affordability crisis, visit nahb.org/plan.