New Lot Size Would Allow Middle-Class Homeowners to Sell Their Backyards

A cat in a North Loop backyard, potentially considering whether this yard could be transformed into another small home (photo by Maggie Q. Thompson)

The most expensive part of a home in Austin is usually the land underneath it. One study found that land acquisition can account for more than half of development costs for single-family homes in Austin. One way to reduce those costs is to allow homes to be built on smaller pieces of land.

That’s the theory behind City Council’s push to reduce Austin’s minimum lot size. Smaller lots mean smaller homes, which mean lower price tags. Recent research out of Houston showed that their minimum lot size of 1,400 square feet played a role in reducing the median sale price for homes in more affluent neighborhoods.

Austin isn’t proposing to set the city’s minimum lot size that low, but it’s getting close. The staff proposal is to go from 5,750 square feet to 2,000 square feet for single-family homes (while keeping the lot size for two- and three-unit developments at 5,750 square feet, so you couldn’t squeeze a triplex on a 2,000-square-foot lot).

New development rules approved in December already make it possible for homeowners with cash to spare to build second homes on their lots with less red tape, or for developers to buy a lot and put three units there – the catch was that the added units needed to share an owner. Ultimately, it was an attractive deal for a very small number of homeowners who could afford to build an additional home, with only five projects proposed three weeks after applications opened up.

This new change would be accessible to folks with no extra money to spend, enabling homeowners to slice off a portion of their land and sell it, while keeping their own home. This was a much-touted aspect of the HOME initiative (which stands for Home Options for Mobility and Equity, formerly Home Options for Middle-Income Empowerment). Reducing the city’s minimum lot size makes that feasible, though the actual bureaucratic process around lot subdivision is a huge mess. Luckily, Council is also working to address that problem in the near future.