As Council Works to Improve Affordability With HOME, How Will Displacement Factor In?

HOME will allow two or three homes on single-family zoned lots (Photo by Getty Images)

As City Council prepares to pass the most substantive changes to Austin’s Land Development Code in more than a decade, tensions over who will benefit from changes to the rules governing housing development and who may be harmed are once again at issue.

Primarily authored by Council Member Leslie Pool, the Home Options for Middle-Income Empowerment (HOME) ordinance, which Council will amend and approve tomorrow, Dec. 7, was conceived for a specific population – those who can afford to live in Austin but who don’t earn enough income to afford homeownership, or those who already own a home in Austin but are struggling to hold on to it. The goal is to facilitate the building of smaller, less expensive homes by loosening development restrictions.

Phase one of the ordinance will allow property owners to build up to three houses on lots where only one house was previously allowed. In phase two, expected to come before Council in the spring of 2024, a new ordinance will reduce the minimum lot size for residential development in all parts of the city, and it will allow housing to be built on a higher percentage of a lot (i.e., increase the impervious cover allowance). In between, Council is also expected to approve measures that could help current homeowners finance new builds on their property.

“Austin used to be a place for young people who came for college or for work and wanted to stay,” Pool said of the initiative at a press conference Dec. 5. “They could find a starter home and make their way in Austin. That’s simply not possible anymore.”

What About Displacement?

Some in the community fear the proposed rule changes pose the same kind of risk for displacement in communities of color as prior efforts to revise the LDC. “We’ve always opposed this kind of zoning,” Austin NAACP President Nelson Linder told the Chronicle. “This kind of zoning has a disparate impact on African American communities,” he added, because it could place more development pressure on the remaining single-family homes in East Austin’s historically Black neighborhoods. Linder, who joined a ballot language lawsuit in 2018 seeking to constrain the city’s ability to change zoning rules, characterized HOME as “another attack on [single-family] dwellings” that would not help Black Austinities.

Recently, UT Austin researchers found similar code changes in Houston resulted in more housing affordability with little displacement of Black and Latino Houstonians. After Houston reduced their minimum lot size citywide in 2007, less than 20% of townhouse builds (three-unit homes) occurred on lots with single-family homes on them, and much of the redevelopment occurred in predominantly white neighborhoods where the median home value was higher than in other parts of the city. The researchers concluded that the policy changes resulted in a “significant increase in the availability of moderately priced family-sized homes in the city” and “enabled more middle- and high-income residents to find homes in high-demand neighborhoods without driving significant numbers of existing residents out of the city.” Nationwide, a broad body of research on relaxed development rules has found that making building easier creates more affordable homes.

But concerns about worsening gentrification remain a salient fear for some, often based on historical precedent. Prior city housing policies did accelerate gentrification – most notoriously the city’s 1928 master plan and development patterns in the Nineties that concentrated new, high density housing on the Eastside. Some Austinites fear HOME will do the same.

“We see people get displaced when an opportunity is identified to replace current residents with people who earn a lot more money,” Carmen Llanes, executive director of the nonprofit Go Austin Vamos Austin, told the Chronicle. Llanes, who opposes HOME and has opposed prior efforts by Council to relax the Land Development Code, said increasing the development potential of single-family lots in places where land has been devalued – like East Austin – would increase buyout offers presented to longtime homeowners in those communities. For those struggling to keep up with increasing property tax payments, these offers may be difficult to resist. That’s displacement risk, Llanes said.

“The problem is not that we need more units,” Llanes said, “the problem is we need to stabilize prices and add more affordable supply.” To do that, she and the small but passionate coalition opposing HOME are pushing Council to add an affordability requirement to the ordinance – i.e., to build three units on a single lot, the property owner would have to reserve one for people earning lower incomes. Doing so is a difficult prospect economically, especially when building a triplex rather than apartment complex, where only two units must offset the cost of subsidizing a third.

As a policy designed to create more housing for Austin’s middle-income residents, HOME isn’t intended to work as an anti-displacement tool for Austin’s lowest-income earners. But the city has other tools to address those needs. Last year, the city published a report specifically addressing anti-displacement measures which included a list of policy recommendations. Among them: building more multifamily affordable housing, converting existing affordable rentals into homes low-income Austinites can purchase, providing cash assistance, rent or mortgage relief, utility assistance, and property tax relief for low-income long-time homeowners. Some of these recommendations have already been implemented.

The Cost of Doing Nothing

Concerns around displacement are valid, CM Natasha Harper-Madison told us, Dec. 6. But gentrification has been happening in East Austin for generations. She is concerned about the cost of delay. “The cost of doing nothing is tangible,” Harper-Madison said, pointing out that some of the concerning scenarios offered by HOME opponents – the replacement of older, more affordable single-family homes with newer, more expensive builds, for example – are already happening on the Eastside. “Nothing we’ve done to this point has stopped it.”

The District 1 CM pointed to a new analysis of HOME by city staff that found the city’s current policy trajectory – restricting housing development in most parts of the city to one single home on large lots – would result in housing costs continuing to increase at rates out of reach for Austin’s working and middle classes. “If the [city] does nothing to enable cheaper development typologies,” the memo reads, “current trends will likely continue.” The memo found that changes to HOME crafted by the Planning Commission to restrict the size of new units and offer incentives to preserve older housing improved the ordinance’s impact on affordability.

HOME is just one of many solutions Austin will need to rally around to address what is a crisis for all people except those in the highest income brackets, Harper-Madison said. “Housing is not about altruism and benevolence,” Harper-Madison said. “It is a business. Whether or not we like that, we have to accept it.” An initiative like HOME will make some people richer – some, who may already enjoy financial stability or wealth – but it will also help people “who have been left out of the homeownership equation,” Harper-Madison said. “That includes old people, young people, and people in Black and Latino communities who have been most harmed by prior city policies.”

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