What we know about Austin's HOME initiative and how it could alter your neighborhood

A Persimmon Point site is under construction in Southeast Austin in October. The HOME ordinance allows for up to three housing units on single-family lots.
Ricardo B. Brazziell/American-Statesman

Austin American-Statesman
Ella McCarthy, Shonda Novak, Austin American-Statesman
December 18, 2023

The Austin City Council in early December approved a major change to the land development code in hopes of promoting housing density by making it easier to build additional living units.

Known as HOME phase one, the changes allow up to three housing units, such as tiny homes, on many single-family lots. With this change, the council also tweaked land use rules and how they pertain to different kinds of new developments under the ordinance.

Here's what we know about the implementation of HOME phase one and what experts think it will look like.

When does HOME go into effect?

The HOME phase one ordinance will go into effect Monday. However, an amendment passed during last week's vote gave the city staff 60 days (until Feb. 5) to make preparations for applications.

Does HOME reduce single-family lot sizes?

Not yet.

The HOME initiative is split into two phases, and phase one allows three units per lot.

Phase two, which is expected to be taken up by the City Council in the spring, proposes a reduction in the minimum lot size from the current 5,750 square feet to 2,500 square feet.

What about HOAs and deed restrictions?

Homeowners association rules and deed restrictions supersede city zoning, and that will continue to be the case under HOME, District 7 Council Member Leslie Pool, who spearheaded the initiative, told the American-Statesman before the vote.

Experts weigh in on HOME changes

The American-Statesman asked two people who work in development and real estate — Charles Heimsath, president of Capitol Market Research, an Austin-based real estate consulting firm, and Rob Kellogg, a Realtor with Realty Austin — about HOME phase one and what it will look like in Austin.

These are their written responses to those questions:

What do you think the net effect will be?

Kellogg: It is clear that more housing options are needed and the goal of city leaders. Certain lots are better suited for accommodating additional structures practically if they are larger and on corner for ingress/egress, but not all lots will be good candidates for a third structure.

Heimsath: Initially very little impact, but eventually it will accelerate the pace of home sales and “tear-downs” in desirable neighborhoods.

How many homeowners do you think will end up building another unit or two on their property?

Kellogg: I think it depends on the lot characteristics of size, shape and whether it is on a corner. It won’t make practical sense for all owners or lots.

Heimsath: Very few due to the high cost of design, permitting and construction.

Do you think it will increase affordability, and why or why not?

Kellogg: In theory the homes would be smaller structures and cost less on comparison. If the allowable impervious coverage isn’t changed, a lot may be allowed 3 structures, but each limited (to) 1,000 square feet each. In central Austin where land is very pricey, those 1,000 square foot homes would need to (sell for) $800,000+ to make the lot+construction costs make sense to a builder.

Heimsath: This will move the needle a little, but not enough to have a meaningful impact on affordability.

What will it mean for property taxes?

Kellogg: Like any development, the additional square footage and structure will increase the tax assessment and tax base.

Heimsath: Land values will increase in areas that experience a high volume of tear-downs or new construction of ADU’s (additional dwelling units). This will be particularly impactful on subdivisions without Deed Restrictions.