When I moved to Austiin, Texas in 2013, I was hit by sticker shock when looking for a house to buy. Prices in Austin were double to triple what my house in Fort Worth had been worth. I assumed there was a housing bubble and decided to wait. Big mistake.
Every year before I renewed my apartment lease, I checked housing prices again. They never came down. Meanwhile, my apartment rent went from $400 more than my mortgage had been, to now $700 more than my previous monthly mortgage. That's actually a pretty modest rise for Austin, Texas these days.
I presumed that COVID and, during that time, falling gas prices would lower housing prices. And that happened for a very short window of time in Austin. Certain neightborhoods lowered prices, but I wasn't ready financially to jump in. I saw it as a good sign though that the bubble might be bursting.
Gas prices recovered. Then came vaccines, thank goodness, and Elon Musk with his announcement of a plant to be build in the Del Valle neighborhood near the airport in Austin, Texas. The housing demand in Austin will only be igrowing, and with increasing demand comes increasing prices.
Austin's population has grown 45.6% since 2000. It's now the 11th largest city in the United States. It's also growing faster than 91% of U.S. cities of similar size. With those statistics, housing isn't being built fast enough to accomodate the growth. Hence the home ownership dream for many in the middle class in Austin, Texas is disappearing rapidly.
The City of Austin is scrambling to help obtain more affordable housing. Austin offers a Density Bonus program that gives developers more height and density approval if they agree to dedicate units in their buildings for afffordable rental or ownership. However, they can also pay a fee-in-lieu toward permanent housing support for the homeless. Almost all the residential developers have opted to pay the fee-in-lieu, instead of providing affordable housing units within their buildings and developments. Of the ones that have, 69% of the affordable housing being built are rental units, which helps with the housing crisis, but only offers 31% of units for ownership by those required to be at 80% of the median family income.
The Density Bonus program doesn't extend city-wide, which is another reason it addresses a very small percentage of the housing problem. Currently it only affects Downtown and Rainey Street, an historic formerly Hispanic neighborhood of modest houses which are now bars and restaurants. City Council member Greg Cesar wants to change that. He says, "I wish...we had density bonus programs all over the city. Every single week we are probably missing out on affordable housing and affordable housing fees that we should be picking up."
During the April 22, 2021 Austin City Council meeting, Cesar also stated, "I'm ready to do the work alongside y'all to find places where we may not be able to get it exactly perfect, but we just don't have a program at all right now, so we're getting zero affordable housing, zero market-rate housing, zero increased tax base and all the other things that we need. When I say we should be looking into these citywide, I don't mean let's continue to pour some of our limited time into just calibating or working on some of the existing density bonus programs. I really want to have maximum impact when we are working on some number of code amendments."
In the meantime, Realty Austin runs ads in Community Impact Newspaper and other places showing properties that have sold for anywhere from $80,000 to $200,000 over asking price. Those of us in the middle class who might not qualify for the affordable housing requirement of earning $80% of Austin's median income to qualify for affordable housing, also don't have an extra $100,000 lying around to bid higher than asking price for the houses that are on the market.