Is The City's Plan For 135,000 New Housing Units In 10 Years Overly Ambitious?

Apr 4, 2017

Socar Chatmon-Thomas pointed at an apartment building under construction along the south shore of Lady Bird Lake, near East Riverside Drive.

“This whole thing used to just be nothing,” said Chatmon-Thomas, who has worked in Austin real estate since 1994. “Just fields and that’s it, and nobody lived over here.”

Those who did paid next to nothing for an apartment. Nearly three years ago, she said, a friend paid $500 a month for an apartment.

Now they start at around $1,000 a month for a one-bedroom, she said.

Chatmon-Thomas testified last week before the city’s Planning Commission in support of the city's first-ever housing plan. The public will have a chance to weigh in on the plan Thursday. For the first time, the city has set a numerical goal for new housing units: 135,000 units over the next decade.

"I think it's an ambitious goal," Chatmon-Thomas said. But, she said, she believes it can be done if the city offers incentives for developers to include affordable housing in new projects.

Calculating 135,000

To get that 135,000 number, city staff multiplied the units of housing Austin had in 2015 (397,637) by the growth rate for the Austin-Round Rock region, which includes parts of Bastrop, Caldwell, Hays and Williamson counties, for the next decade (34 percent).

If this housing goal is only for the City of Austin, though, why include the growth rate of the larger metropolitan area?

“We had heard through our housing market study that there are people who would like to live in the city of Austin if they could, but because they can’t afford to, they have to live in surrounding areas,” said Erica Leak, who works for the city’s Neighborhood Housing and Community Development Department.

An earlier version of the housing plan set the goal at 75,000 new housing units over the next 10 years. But Leak said public feedback forced the city to reconsider that number.

According to a 2014 analysis of the city’s housing market, 60 percent of people who work in Austin commute from outside city limits.

Within the 135,000 target, the city has set a goal of building 60,000 affordable units for households making roughly $62,000 a year or less. According to Leak, the city currently has the tools to build only about 10,000 affordable units over the next decade. To get the remaining 50,000 will require policy changes – including, for example, a tweaking of the city’s density bonus program, which asks developers to build a certain number of affordable units in exchange for looser zoning regulations.

Is 135,000 The Right Number?

Jake Wegmann, a real estate professor at the University of Texas, tends to the hyperbolic when asked about the feasibility of the city building 135,000 units over the next decade.

“To even achieve what the plan lays out would be an incredible, Herculean undertaking that no other large American city’s been able to pull off,” he said.

"To even achieve what the plan lays out would be an incredible, Herculean undertaking that no other large American city’s been able to pull off."

He pointed to the city’s estimated funding – $11.8 billion – needed to fill the gap of affordable housing for those making $25,000 a year or less. The plan recommends that this housing be spread throughout the city.  

Wegmann said building that many units wouldn't just require buy-in from city council, but also from residents citywide.

In Mayor Steve Adler’s State of the City address this year, he emphasized that only certain parts of the city would need to bear the burden of the housing growth. He called this his “Austin Bargain.”

“For starters, let’s agree we will not force density in the middle of neighborhoods,” he said. “There’s no sense in shoving density where it would ruin the character of the city we’re trying to save in the first place, where it’s not wanted by its neighbors, and where we would never get enough of the additional housing supply we need anyway.”

But Wegmann said asking most, if not all, of Austin’s neighborhoods to accept new housing would be necessary to meet this goal.

“If we care as much about affordability as we claim that we do, then this is something that we should be doing,” he said. “But we’re not doing it.”

Others feel the goal of building 135,000 new housing units over the next decade is not ambitious enough.

“Over the last few years, we’ve been building 10,000 to 12,000 units a year,” said Planning Commissioner Chito Vela. According to city data, in 2014 the city permitted 11,004 new housing units. In 2013, that number was closer to 12,000. City staff, though, argue that each decade the city's housing suffers a downturn – for example, in 2010, the city permitted fewer than 3,000 units.

“Just based on our current new home, new apartment construction, combined with population growth over the next 10 years, I think it’s very likely that we will build 135,000 units over the next decade,” Vela said. “I feel like we’re just legislating the status quo.”