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Amid affordability crisis, Austin will consider studying what it costs to build new housing

Monday, December 13, 2021 by Audrey McGlinchy, KUT

Austin City Council members on Thursday asked city staff to look into what it would cost to analyze how much it, well, costs to build new housing. The study, if given the green light early next year, would also focus on how this impacts the price of buying or renting a home and what the city can do to lower these costs.

Council supported the measure only after a postponement and hours of discussion about the breadth of the study. Some members, including Mayor Pro Tem Natasha Harper-Madison, who wrote the measure, were frustrated by the delays.

“I’d really, really like to just move forward,” she said at Thursday’s Council meeting. “We’re just asking for information. We’re not doing more than asking for information.”

In the past year, the price of housing in Austin has risen at a historic pace. Homes in the city, on median, now sell for $536,000, a price that reflects more than a 20% annual increase. The average monthly rent in the metro area has surpassed $1,500, an increase of about $300 in half a year.

“The clock is ticking on housing,” Council Member Paige Ellis, who represents Southwest Austin, said. “I want this information back as soon as staff is able to compile all of the information, because we are all trying to work together up here to make sure we are making housing more accessible and more affordable in our community.”

If the city can better understand what it costs to build new housing, it could presumably come up with ways to lower those costs. But some Council members pointed out that the city has only so much control over items like labor and supply costs, and that even the costs it can control, like permitting fees, are hindered by state law.

“I think it’s really important for us to center this conversation about housing around what is actually within the city of Austin policymakers’ and staff’s authorities,” said Council Member Leslie Pool, who represents parts of Northwest Austin.

For example, the city charges some developers a fee to build or maintain parks if they don’t provide greenspace themselves. At one point in Thursday’s meeting, Pool tried to add to the study an amendment that would require city staff to weigh the effect reducing some of these costs could have on things like parks.

“The reason why this is such a livable city is because you look out these doors and you can see we’ve got greenspace, we’ve got trees and we care about them,” she said.

As Council members brought up these concerns, they decided to hold up a vote on the study for a week. The discussion Thursday lasted for more than an hour as some members feared a study like this asked too much of staff and could result in a lengthy and costly analysis.

“I think this could get really expensive and detour us in a lot of different ways,” Council Member Alison Alter, who represents West Austin, said.

The study, which still hinges on Council seeing a cost estimate expected early next year, would look at what it costs to construct various types of homes in the city: single-family, duplexes, townhomes and apartment buildings. An amendment from Council Member Ann Kitchen also asks staff to look at how long it takes to permit construction, which has been an ongoing complaint from many working in the industry.

At a special called meeting last week, Council members heard from an economist about the root of Austin’s affordability crisis: Developers are not building enough homes to house the people who want to buy and rent them. Members brainstormed ideas to increase housing supply, like making it easier for property owners to build homes in their backyards and allowing developers to build housing in parts of town zoned for commercial buildings.

“Collectively, this body has agreed that we’re in a housing crisis,” Council Member Mackenzie Kelly, who represents Northwest Austin, said Thursday. “As more people move here, housing is a fundamental part of the supportive infrastructure that we need to work on.”

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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