Austin went from a 'weird' oasis to one of the most expensive cities in the US. Now it's fighting runaway housing prices.

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Austin went from a 'weird' oasis to one of the most expensive cities in the US. Now it's fighting runaway housing prices.
In an aerial view, the downtown skyline is seen on April 11, 2023 in Austin, Texas.Brandon Bell/Getty Images
  • Austin, Texas has become one of the least affordable cities in the US in part due to steep housing costs.
  • This week, city lawmakers took a significant step toward helping boost housing supply.
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Until relatively recently, Austin was best known as Texas' quirky, liberal, and affordable haven for university students, musicians, and artists. A "weird" place that its residents hoped would stay that way.

But since the capital city was discovered by the world's biggest tech companies and their well-compensated employees, it has transformed into one of the least affordable cities in the country. Neighborhoods have gentrified and home prices and rents have skyrocketed as supply has struggled to keep up. In the process, the "keep Austin weird" slogan has been leveraged by anti-development advocates to protest new housing.

Demand for housing in Austin has surged over the last decade, fueled in large part by the movement of major tech companies, including Apple, Amazon, and Tesla, into the city. Median home prices in Austin more than doubled between 2011 and 2021 as the city's median household income rose from $55,744 to $80,954 in roughly the same time period, the Austin Chamber of Commerce reported.

City lawmakers are finally finding some success in their efforts to boost housing affordability. The city council on Thursday approved a resolution that would reduce the minimum lot size for a home by more than half and allow up to three units on each residential lot.

The upzoning measures, supported by nine of the council's 11 members, are designed to promote the construction of so-called "gentle density" — also known as infill housing or missing-middle housing. It would allow townhomes, duplexes, and triplexes to be built on lots that only single-family detached homes could previously sit on.

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The resolution also asks the city manager to review regulations on how tall homes can be, how far they need to be from the street, and how much of a lot can be covered by surfaces like rooftops and driveways that don't absorb rainfall.

Austin also recently ended its mandates requiring a certain amount of parking spots be built with every new home — a move that is also expected to reduce housing costs.

While the city has built new housing at a faster rate than most US cities in recent years, its restrictive zoning policies simply haven't allowed it to build as much as it needs. The Texas capital's 1980s land development code makes it illegal to build anything other one single-family home on a lot that's at least 5,750 square feet in most of the city.

Opponents of the rezoning efforts say more dense new housing would change the character of their neighborhoods, increase congestion, and displace longtime residents, among other concerns.

Research has found that increasing the market-rate housing supply makes housing more affordable for both middle- and low-income residents, despite widespread skepticism that the laws of supply and demand apply to housing.

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The lawmakers who've pushed the effort say it's designed to help middle-income homeowners.

"Together we will tackle the challenges middle-income families face and deliver true benefits to those looking to buy a home and stay in Austin, as well as those who continue to work to stay," City Council Member Leslie Pool said.

This comes after years of battles between so-called YIMBYs — "yes in my backyard" pro-housing advocates — and NIMBYs, "not in my backyard" activists. Last year, a Texas appeals court struck down a previous city council effort to increase housing density through upzoning.

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