Six Months of HOME Permits Show Neighborhoods Aren’t Changing Much

Six months after City Council approved Phase 1 of the controversial Home Options for Mobility and Equity (HOME) ordinance, preliminary data shows that the new housing rules have not incentivized developers to bulldoze old homes and replace them with big, “McMansion”-style homes.

That was one of the most prominent concerns shared by critics of HOME, which the Council designed to help spur the construction of smaller homes on smaller lots within the core of the city. New data shared by Housing Department staff in a Dec. 18 memo shows that the ordinance appears to be working as expected – though, the data is limited to the 159 HOME applications submitted between Feb. 5 and Aug. 7. Of those, 99 of the applications were approved.

“I am encouraged by these results because they appear to show that HOME is working as we hoped,” Awais Azhar told the Chronicle. Azhar chaired the Planning Commission during the HOME creation process and has been credited by Council members and their aides as a key figure in helping to design and tweak the ordinance to achieve the desired results. “In some cases,” Azhar added, “we’re seeing better results than expected.”

“In some cases, we’re seeing better results than expected.”– Awais Azhar, one of the designers of the HOME amendments

The memo contains five data tables that break down the application numbers into types of projects (duplexes, three-units, tiny homes, or – the most common – detached two-unit homes) and the floor area ratio typically used for each project (that is, how much of the lot is taken up by a building). But there are two tables that, at this early stage, convey the most important takeaways from the first six months of HOME.

One, the number of demolition applications submitted since HOME was enacted has basically remained flat when compared to the number of demo applications submitted in the six months prior to the enactment of HOME (the number of approved applications is down slightly). That means developers have not rushed to tear down older homes, which are generally more affordable than newer builds.

Two, a plurality of applications (54) have been for units that are about half the size of what had been built under Austin’s McMansion ordinance. That means that the people planning to build homes under HOME are not, for the most part, intending to build giant, bulky houses. This had been a top concern among skeptics of HOME. So far, the memo only reports two applications for units that approach the size of the typical Austin McMansion.

The early data is encouraging, Azhar told us, but there are important caveats to be noted. For one, the memo can only report on a limited sample size – when staff reports on 12 months of data in February, the application data might not look as good. Two, “permitted does not mean built,” Azhar said – meaning that just because a property owner gets a building permit approved, it doesn’t mean they’re actually going to build the home. Financing can dry up or owners can simply have a change of heart – it happens all the time in the real estate world, Azhar said.

But, Azhar emphasized, the data shows that building under HOME is on the right track. It will be important for Council to continue monitoring development under the ordinance closely so that they can tweak it, or create new regulations, to help ensure the broader goal of smaller units on smaller lots is achieved.

In future reports, staff hopes to include more detailed data on how HOME development has affected housing prices in Austin, particularly by unit type, and how the ordinance is affecting the value of homes that are not on the market. Staff is expected to publish a 12-month report on HOME on Feb. 5.

This article originally appeared in The Austin Chronicle.