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Phase II of the HOME Initiative could bring minimum lot sizes down to 2,000 sqft

Austin City Council will vote on the the next phase as early as May — here’s what you need to know.

An overhead view of dozens of Manor homes and driveways.

Phase II of the HOME Initiative builds upon the first phase by changing zoning practices to allow smaller lots.

Photo courtesy of Whisper Valley

Austin City Council will vote on Phase II of the HOME Initiative — a move that would reduce the minimum size of a single-family lot — as early as May.

The council passed the first phase of the HOME Initiative, which stands for Home Options for Middle-income Empowerment, in December 2023. In part, the decision increased the maximum number of units from one to three on certain single-family lots.

This new phase would change single-family lot minimums from 5,750 sqft to 2,000 sqft, something the Austin Board of Realtors said could improve home affordability moving forward.

Why is this under consideration?

Proponents say passage of the new phase could alleviate the housing shortage by allowing construction of 87 to 871 new homes annually, and promoting housing accessibility.

A graphic showing the price decline of a new home depending on decrease in lot size and decrease in square footage.

On its own, a 50% lot size decrease is expected to decrease new home prices by 8.9%.

Graphic courtesy Austin Board of Realtors

According to a report from ABoR, reducing lot minimums could slash new home prices, since land makes up an average of 17.8% of new home prices.

Analysis found that building a $540,000 home on a 2,000-sqft lot could reduce the price to $477,313 — a $62,687 difference. Cutting down on square footage in conjunction with smaller lots could shrink prices even further: a 50% lot size decrease plus a 25% home size decrease could bring the price of a new home down by 24.1%.

It’s important to note that approval of HOME Phase II would not require any changes from current homeowners. Learn more about what neighborhoods could look like under the passage of Phase II.

How can I get involved?

Austin City Council is looking for community feedback on the proposal. The next Planning Commission meeting will take place at 4 p.m. on Tuesday, April 23 at Austin City Hall, 301 W. 2nd St.

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