The Housing Department is pushing City Council to continue to provide funding for land acquisition and development subsidies to preserve long-term housing affordability. In a recent memo responding to a Council resolution from last year, housing officials describe land banking as “the bedrock” of future affordability. The memo acknowledges that expanding the city’s community land trust program will require significantly more investment, with current developments requiring between $182,000 and $230,000 in subsidy per unit.
The recommendations were submitted in response to Resolution No. 20240404-067, which called for a formal review of the city’s land banking and land trust strategies and sought recommendations for how to enhance their reach, particularly in areas at risk of displacement. The memo outlines an assortment of financial, administrative and legal steps, with an emphasis on maintaining long-term affordability in the markets for rental and ownership housing.
According to Housing Department data, only about 3 percent of Austin’s estimated 506,000 housing units are currently income-restricted for households earning at or below 80 percent of the area median family income. Most of those restrictions are temporary and apply to rental properties.
Staff noted that the speculative housing market continues to erode affordability, particularly in high-opportunity areas, and that community land trusts and land banking programs offer more stable protections than traditional subsidy models.
Community land trusts, which allow homeowners to purchase a structure while the underlying land remains in a nonprofit trust, are designed to keep homes affordable across multiple generations. Austin’s primary such program is administered by the Austin Housing Finance Corporation, which acquires land and facilitates long-term ownership and stewardship models.
The memo recommends continued funding for land acquisition, especially in corridors slated for new transit infrastructure, as well as deeper subsidies to expand land trust housing stock and ongoing support for the city’s Community Land Trust Accelerator program, which trains nonprofit organizations to become developers and long-term managers of community land trust homes.
The memo also identifies barriers that limit the city’s ability to expand land banking and land trusts more broadly. Urban land bank programs authorized under Texas law are described as overly restrictive and poorly suited to Austin’s current real estate market. State statutes limit such programs to acquiring tax-delinquent, unimproved properties that have been in arrears for at least five years and are valued below the total amount of outstanding taxes and fees.
A city analysis found that virtually no properties in Austin currently meet those criteria. Staff cautioned that the risk of promoting displacement or gentrification through such programs must be carefully managed if legal restrictions are ever loosened.
Staff also noted that acquiring property in some of Austin’s higher-opportunity western neighborhoods remains difficult due to high land costs and restrictive development standards. To address this, the memo recommends exploring interlocal partnerships with public landholders such as the University of Texas, the State of Texas, or nonprofits that control land in areas with strong economic and educational opportunities.
Despite these constraints, AHFC has acquired more than 100 acres of land for affordable housing development since 2018, with many parcels located near future Project Connect light rail stations. Some projects are already under construction or entering the development pipeline, including sites on Grove Boulevard and Jackie Robinson Street.
The city’s program is also progressing, with multiple townhome and duplex developments underway. Three nonprofit developers that participated in last year’s accelerator plan to break ground on new community land trust projects this year, targeting households earning below 60 and 80 percent of the median family income.
Housing officials are coordinating a presentation of their findings and recommendations for the Council’s Housing and Planning Committee.
When the land trust resolution was approved last year, Council Member Natasha Harper-Madison said the practice plays an important role in the city’s attempts to enable the creation of affordable homes.
“We need to continue to explore and utilize all possible tools that we as a city have to address our critical housing shortage and produce more affordable and attainable housing, that means it’s affordable and attainable by you,” she said. “We need that at every income level and sustainable housing options in all areas of Austin. Using these tools with an equity emphasis will empower Austin residents with the most important benefit of all, and that’s access.”
Photo made available through a Creative Commons license.
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