If we’re going to manage growth in a way that makes Austin a more affordable place to live, we’re going to have to have a clear-eyed talk about housing and housing supply — where we build it, where we preserve it, where we keep it affordable, and how we make it easier to remodel and to build the housing stock we need. That’s why the Austin Strategic Housing Plan, which the City Council will get a chance to approve next week, is such an important opportunity to make sure there’s a place for anyone in Austin regardless of income.
Housing is what takes the greatest chunk out of most family budgets in Austin, and it’s a big reason why we are the most economically segregated metropolitan area in the country. The stakes could not be clearer: If we do nothing, Austin will become like San Francisco, a wonderful if incredibly expensive city with a median home price over $1 Million where only the wealthy and the subsidized can afford to live. We will lose our middle class to suburban sprawl, making traffic even worse and losing the spirit and soul of our city. If we do nothing except preserve our beloved two-bedroom bungalows, we’ll soon have a bunch of $1 Million two-bedroom bungalows.
That’s the track we’re on because for too long we’ve treated housing like a game of musical chairs. When the music stops, too many people are vying for too few houses and apartments. Some people lose their place, while others bid up prices. We cannot sit by while Austinites are priced out of Austin and when young people have to leave Austin to start their families. That’s not right, and it’s not sustainable.
Home prices have hit a record high in Austin. The median-priced home in Austin is now $284,000. We still have time. They say that our housing market is cooling off a little, but that only means prices will rise less quickly if we do nothing but maintain the status quo. Experts tell us that 95,000 people are going to move to the Austin area by 2020. The experts also tell us we will continue to grow by about 110 people every day, doubling the population of greater Austin to 4 million by 2040, the biggest growth of any large U.S. city.
We’ve got two big problems with housing:
First, there’s just not enough of it to go around. And we like to keep things weird here, but I’m here to tell you that the law of supply and demand, and its relationship to prices, applies even in Austin. We simply don’t have enough housing supply now to keep up with demand. To stabilize housing prices, the Austin Strategic Housing Plan says we need to build at least 135,000 new housing units over the next decade so supply more closely meets demand.
Second, Austin has a big — and growing — affordable housing gap. Right now, we need 48,000 so-called “deeply affordable” places to live for households making up to $25,000 a year, which is about 16% of all Austinites. And right now, we don’t have the money or the financial tools to get us there. Building that much affordable housing would cost us $6.58 billion now. If we waited until 2025, closing the gap would run us $11.18 billion.
We don’t have that kind of cash laying around, and we don’t have the financial tools to come up with it. And if we let the market alone drive housing supply, we’ll only end up with market-rate housing.
Building housing affordable at all income levels is mission-critical for Austin. As the Austin Strategic Housing Plan states, “an adequate supply of housing affordable to people working all types of jobs and integrated throughout the City is necessary to maintain a culturally rich, diverse, and livable city.”
How we get from here to an Austin where everyone can afford a place to live requires us to, as a first step, agree to the Austin Strategic Housing Plan that sets out various funding strategies and tools that will help us achieve our goals. These include federal and local funding, density bonus programs, the strike fund that we hope will launch this year, CodeNEXT, tax increment financing, homestead preservation districts, S.M.A.R.T. Housing, the Austin Housing Trust Fund, bonds, and everything else we can reasonably try.
If it takes a village to raise a child, it takes a lot of financing tools to build that village — but that doesn’t look as good on a bumper sticker. It’s a big job, and we’ve got a lot of support behind the Austin Strategic Housing Plan, including the Community Development Commission, Housing Works, the Austin Housing Coalition, and the Planning Commission. The housing plan is also aligned with our comprehensive plan, Imagine Austin and will become part of it if the Council approves it Thursday.
Managing growth to preserve the spirit and soul of this city is the overarching obligation we have to the next generation. We can’t count on things working out on their own. We tried not building infrastructure and housing supply in hopes of people not moving here. That’s part of how ended up with an affordable housing gap. Closing that gap starts with adopting the Austin Strategic Housing Plan.