Austin Mayor Says the Key To Keeping the City ‘Weird’ Is Ensuring a Robust Supply of Housing—or People ‘Will Go Elsewhere’

Austin Mayor Kirk Watson has said that the key to living up to the city’s famous motto to stay “weird” will be to ensure that the city’s housing supply keeps pace with demand. 

“The greatest challenges in Austin right now are a result of success,” Watson said on Monday during a panel discussion at the Realtor.com® SXSW showcase in Texas’ capital city.

“People want to be here. People want to move here. They want to stay here,” he added. “If we don’t have the housing supply, they will go elsewhere, or they won’t come here in the first place, because they know they’re not going to be able to stay.”

Watson said that the challenges in Austin mirror national trends revealed in a new report on the housing supply gap from the Realtor.com economic research team. It revealed a national housing shortfall of nearly 4 million units.

“We are 3.8 million homes short in this country, and that means over roughly the last decade, we’ve seen more households formed than homes that have been built,” said Realtor.com Chief Economist Danielle Hale, who also joined the panel discussion.

That housing supply gap also takes into account the 1.6 million new Gen Z and millennial households that would have been expected to form last year but didn’t, due in part to the lack of affordable housing options.

“High home prices, high rental prices, a shortage of homes on the market for sale means that people decide not to strike out on their own, so they continue to live with their parents, or they take on roommates instead of going out on their own,” said Hale.

In Austin, surging demand from a population boom has led to soaring housing prices. Although home prices and rents in the area have fallen from the peaks they reached in 2022, they remain well above pre-pandemic levels, putting a financial strain on residents.

Agar, a professional caregiver who moved to Austin two years ago, told Realtor.com that she struggles to afford the $2,500 rent on the small apartment she shares with her two teenage sons.

“People come from California, and they pay in cash from selling their old home, and it drives the prices of everything up,” said Agar, who drives for Uber on the side to earn extra money.

What Austin is doing to boost housing supply

At the panel, Watson said Austin has made strides in addressing the housing shortage in the past two years, but he acknowledged there was more work to be done.

He said that the initial review process for new building projects had been slashed from an average of 100 days to 33, reducing costly waiting periods for developers.

The city council also passed two phases of the HOME Initiative, which allow for a greater density of residential construction in Austin.

HOME 1, passed in December 2023, allows up to three units on single-family-zoned lots and simplifies the regulations for multiple units on single-family lots.

HOME 2, passed last May, lowers the minimum lot size for one unit to 2,000 square feet, down from the 5,750 that had been required by an ordinance dating to 1947.

Watson also said that the city’s efforts to expand public transit, including through building a rail system, were key to expanding the affordable housing base by expanding the supply of homes that are practical to live in without owning a car.

The mayor, a Democrat, said the push to expand the housing supply was crucial for living up to the city’s motto to “keep Austin weird.”

“What that means to me is, Austin is a place that is open. It’s open to new ideas, change, things that will be coming along,” he said. “Because, you know, let’s face it, lots of times we hear an idea for the first time, we say, that’s weird, and it really becomes something.”