The first multiunit housing projects under Austin's Home Ownership for Middle-income Empowerment, or HOME, rules are coming on the market around town nearly a year after City Council's first vote for the initiative.

The new policy's effects on affordability and other housing trends remain unclear for now, though, as city reporting on the new regulations as well as information on homeowner assistance options have yet to be released.

The setup

Council approved HOME Phase 1, allowing up to three housing units on single-family lots, on Dec. 7, 2023. That was followed by officials' May 16 vote for HOME Phase 2, slashing Austin's minimum lot size requirement for residential construction by about two-thirds to 1,800 square feet.

The updates represented some of the most notable and wide-ranging changes to Austin's residential land-use rules in years, and were controversial. Hundreds of Austinites turned out to public meetings to voice support and opposition to the policies.

Many in the community and a majority of council members backed the changes, saying they expect HOME to create more accessible homeownership opportunities for lower- and middle-income residents while granting flexibility to property owners for the use of their land.

On the other side, scores of residents raised concerns over the potential for the policies to spur speculation in the real estate market and further displacement in lower-income areas. Many also worried about disruption to existing neighborhoods brought with denser development like increasing traffic and negative environmental effects from the added construction.

A closer look

After council's formal votes, HOME rolled out in pieces. The city started taking HOME Phase 1 applications in February, and more than 240 have been submitted to the Development Services Department all around Austin with 180 approved as of late November. Altogether, they include nearly 450 proposed new units.

Homebuilder Carr Residential has billed a three-unit South Austin project as the first under HOME Phase 1 to hit the market. Permitted this spring, it includes three approximately 1,700-square-foot homes on a more than 15,000-square-foot lot with each selling for $599,000.

Partner Cody Carr said the new housing represents "gentle density" that still includes space for parking and yards while costing less than a single, larger home might in the same neighborhood. He said plans for a two-unit project there expanded to three after HOME's passage, and that he believes it's a good example of the regulation's potential.

"It’s a more family-friendly product, and it gives you room for, say, a baby, a grandma when they’re visiting. Versus under the old code, we probably would’ve had a smaller two-bedroom, one- or two-bath with a tight format," Carr told Community Impact. "What we’re proud of here is actually being able to bring that middle size and still keep the price range relatively lower."

Next up, the new minimum lot size allowances under Phase 2 were split between different parts of town. Some applications were allowed in August, while the remainder of the city was added as of Nov. 16. Those changes have drawn less interest, however, with only three applications—one for subdivision and two for buildings—submitted as of late November.

"It is early in the process for HOME Phase 2 for comparisons, and different factors will be involved in reviews, depending on the application. Given the length of time since implementation, DSD has processed far more HOME Phase 1 applications," DSD spokesperson Robbie Searcy said in an email.

The Phase 2 rules were delayed for outer areas of Austin at higher wildfire risk—known as the wildland-urban interface, or WUI. The city's WUI code is undergoing revisions to be adopted in May, and Austin Fire Department spokesperson Tara Long said staff are accounting for HOME in that process.

"AFD is in communication with city management and council about this stopgap to ensure that the goals of HOME 2 remain a priority while maintaining the highest possible levels of safety for our community," she said.

The conditions

HOME came with several mandates for city analysis of the policies, and council requests for more information and assistance for residents interested in the program. To date, most of those materials have yet to be released.

With passage of the first phase, city officials required a six-month report on HOME data, including:

• The total number of permits filed for various housing types, and the size of those units
• A review of housing prices for HOME units
• The number of permits using HOME's Preservation Bonus to encourage less demolition of older homes
• The number of demolitions processed in relation to HOME

The six-month report was due to be released in August. However, Searcy said DSD staff "do not currently have an update" on the report. In response to a public information request, the city said no draft or final documents were available.

Wider-ranging annual reporting on many other aspects of HOME's impacts will also be required going forward. Searcy said work on the first of those yearly reviews will start in February.

In response to one of the top community concerns over HOME, a study into a potential "equity/anti-displacement overlay" to limit the regulations in vulnerable areas of town is also taking place. The city has brought in a consultant to evaluate the "feasibility, merits, and risks" of that overlay, Planning Department spokesperson Caleb Pritchard said, with work starting this fall and recommendations set to be released by next summer.

Following up on HOME Phase 2's passage, council member José Velásquez had also requested analysis of financial aid that could be available to low- and moderate-income homeowners under the new rules. In a May statement, he called the measure "absolutely necessary" as part of the process.

"Access to financial supports is critical in keeping people in their homes, and I think this is a step forward in empowering them to leverage their property while building the housing we desperately need," he said.

That information and related proposals was initially meant to be available by late October. However, staff pushed that deadline to Nov. 22 earlier this fall and have yet to release the reporting.

Another Velásquez request for options like civic downpayment assistance was originally due in March and also delayed several months. Housing Department spokesperson Kasi Jackson said a response will be completed late this fall.

Coordination around those HOME directives has involved several city departments, prompting the creation of a new staff task force to meet the council-outlined goals. Searcy said that work is in progress.

"The Task Force is currently developing a work plan to identify and recommend solutions to help low- and moderate-income homeowners (in this case, households that earn less than 80 percent of the area median income)," she said "The recommendations will seek to enable those homeowners to maintain their homes and expand or modify their properties under these new regulations."

Get involved

The city is taking input on HOME's rollout this fall. Residents, business owners, developers and other community representatives can weigh in at a Dec. 14 feedback session at the Conley-Guerrero Senior Activity Center, 808 Nile St., Austin. Comments can also be submitted through an online questionnaire.