(Part 2 of a series)
In the first installment in this series we looked at how, contrary to the rhetoric of Mayor Steve Adler and numerous others, Austin is a runaway national leader in issuing building permits. To illustrate the point, we noted that on a per capita basis Austin leads cities around Texas and around the nation by massive Secretariat style lengths in issuing building permits — and we included a Boomer Alert that explained who Secretariat was.
That article examined overall building permits issued, including both single family and all levels of multifamily. In this installment we will concentrate on permits for multifamily or apartment units.
On apartments, Austin continues to gallop ahead of the field. And, in Texas, Austin has an even bigger per capita lead than in the overall permit statistics.
Before diving into that, however, it might help to do a little more review of the first article. First, it’s important to note that this issue came up in part because the Mayor and an undetermined number of Council Members are seeking to rush through a series of final days changes to the Land Development Code (LDC), before Adler and at least one Council ally leave office in January.
The Mayor said in his last State of the City Address (SOCA), “We must fix the Land Development Code to unlock the needed housing supply.” Adler was repeating a widely voiced claim that Austin’s LDC drastically slows down the development and building process; and drives up housing prices.
Actually, there is fairly widespread agreement that the LDC is cumbersome at best, and probably does slow the development process and contribute to higher housing prices. Adler and his Council allies, however, have, for almost eight years now, refused to fix just that. Instead they insisted on packaging a LDC rewrite with a virtual Citywide upzoning, among other things. They also insisted on not notifying affected property owners and denying petition rights to property owners. Two courts have now ruled that the Council violated state law in those attempts.
A LDC-alone approach would have been less intrusive, within their power, and legal. Instead Adler and a series of Council majorities have squandered almost eight years trying to pass the entire package.
We’ll have more on that in a future installment, but here we will concentrate on the claim that the LDC is slowing down building permit approvals. As noted above, there may well be some truth to that, but not enough to prevent Austin from being the per capita national leader, among large cities, in issuing building permits.
For example, Austin led all other major US cities from 2017 to 2021 in the number of building permits issued per capita. Also during the same period, Austin issued more building permits — in raw numbers — than each of the three Texas cities with larger populations than Austin; including issuing more building permits than the City of Houston which is more than twice as large as the City of Austin.
Now, let’s talk about apartments.
An Apartment Ban?
A shortage of apartments and places to build them is a favorite whipping boy of local “urbanists.” Urbanists, a label people of that ideology proudly apply to themselves, ardently support the LDC rewrite. In Austin, urbanists like to label single family areas as being subject to an “apartment ban.” They apply that term to any areas not zoned to allow apartments, even if apartments are nearby.
Austin, however, has been building a lot of apartments for a city that has an “apartment ban.”
For example, the Kinder Institute for Urban Research at Rice University, in a study of the first year of the pandemic, reported, “Austin punched way above its weight on housing production. . . Measured on a per-capita basis — the number of housing permits issued divided by the total population — Austin’s housing production was way ahead of any other city in the nation.” They added, “Even more astonishing is Austin’s multifamily housing production. Last year, Austin produced more multifamily housing than either Houston or Dallas, despite being one-third the size. Overall, about 46% of all new housing in Austin last year was multi-family, compared to only 27% in Houston.”
Then a Redfin study declared Austin #1 in both single family and multifamily building permits per capita during the first quarter of 2022. As Austonia explained those findings, “the city is doing more than just building that quintessential single-family home: Austin also topped the list for new multifamily property permits, with 26.1 permits per 10,000 people in the same quarter.”
Municipal/City Limit Figures
As noted in the previous story, the Kinder and Redfin numbers are for the Austin metro area as opposed to just the Austin city limits. So, to most accurately assess the impact of the LDC, we must look at data for just the city limits. Comparative data of that type is difficult to find, but the Independent utilized the SOCDS Building Permits database (the Housing and Urban Development Department’s State of the Cities Data Systems).
Once again Austin out-distanced other major cities, except lagging behind Los Angeles and New York City in raw numbers. (The city limits population of Los Angeles is more than four times that of Austin and New York City more than nine times, according to 2020 census data.) Austin, however, pulled to an even more lopsided lead in per capita numbers.
Among large Texas cities, Austin’s lead becomes even more Secretariat-like. (If you would like to see Secretariat win the 1973 Belmont Stakes by 31 lengths click here.) According to SOCDS, from 2017 through 2021 Austin issued building permits for 54,249 multifamily units. Houston, whose city limits features more than twice as many people, was a not even close second with 41,274. Despite the population difference, Austin issued building permits for 31% more apartment units than Houston, during the five-year period. During that same period Austin issued more permits for apartments than Dallas and San Antonio combined.
Also putting the lie to urbanist claims that Austin has an “apartment ban,” 71% of Austin’s building permits during the five-year period were for apartments. Only Dallas had a higher percentage of its total, 72%, but in total numbers Austin issued more than double the amount of apartment permits that Dallas did; the City of Dallas has roughly 30% more residents than the City of Austin.
City of Austin Demographer Reported This Trend Back in 2020
If the Mayor and Council read this report, it will not be the first time they have been presented with such numbers. The Council received a similar report from closer to home during the fury of their early 2020 drive to push the LDC over the finish line. Then City Demographer Ryan Robinson wrote:
“The amount of multifamily housing under construction right now with the City of Austin is simply phenomenal – a phenomenon running orthogonal to the false narrative that housing production within the City is somehow severely constrained by the City’s land development code.
And even if the code were to be dramatically opened up with vast increases in entitlements, I’m just not sure we would see levels of production much above what we’re currently seeing – the pipeline of production must be nearing a maximum threshold of sorts.”
Robinson’s superior at the City pulled these comments from the report, saying the editorializing did not belong in a City report. The facts, however, remained the same.
Who Was That Austin Bargain Guy?
Of course Austin residents can see with their own eyes that a lot of apartments have been built, particularly on major corridors. Just visit North and South Lamar, South Congress, South First, Mueller, Burnet Road, West University, East Fourth and Fifth Street, Martin Luther King Blvd., and on and on.
Yes, thousands and thousands of apartments made it through the hated LDC.
The practice of building apartments on major corridors is a long standing approach in Austin, a compromise approach. That approach clearly has resulted in a lot of new apartments.
Although this major corridors compromise goes way, way back, there was a recently important person in Austin politics who supported it and he even gave it a name; I’m just having a hard time remembering his name right now. Maybe readers can help.
This guy called it, “The Austin Bargain,” and explained it like this:
“For starters, let’s agree we will not force density in the middle of neighborhoods. There’s no sense in shoving density where it would ruin the character of the city we’re trying to save in the first place, where it’s not wanted by its neighbors, and where we would never get enough of the additional housing supply we need anyway.
And in exchange, let’s also agree that we will adopt a code rewrite that will give us the housing supply we need by focusing along our major corridors like Lamar, Burnet, and Airport Boulevard and our major activity centers like the area around the Domain, Mueller, and downtown.”
Oh! I remember now. That was Steve Adler in his State of the City speech five years ago, as his reelection campaign neared. In fact he held that position during his first campaign and throughout his first term. Only after winning election did Adler abandon the “Austin Bargain.”
In his most recent, and final, State of the City Address the Mayor said, “We must fix the Land Development Code to unlock the needed housing supply. We must reinvent the development process, so that building in Austin no longer costs too much and takes too long.” Adler then specifically referred to ongoing efforts to pass at least some code amendments before he and at least one LDC ally leave office in early January: “Final ordinances should be passed before the end of the year,” promised the Mayor, who then added pointedly, “We didn’t give up.”
The Mayor’s talking point captures two key arguments of LDC rewrite backers: the code slows down the approval and building of housing; and it drives up the price of housing. The official figures cited above, and in the previous article, show that even if the LDC is slowing down development approvals, Austin is issuing far more permits than bigger, also booming, Texas cities. That leaves the claim that the LDC is driving up housing prices.
The sheer number of permits approved by Austin contradicts a key urbanist theme: that if enough housing is approved, prices will become more affordable. (By the way, isn’t it interesting that staunch “progressives” on the City Council would embrace such a free market philosophy?)
Perhaps though the LDC does drive up the cost of development to some extent. The Kinder Institute, however, floated another possibility.
Could Developers Possibly Have Anything To Do With The Lack of Affordable Housing?
Noting that despite the big building numbers Austin housing prices are “skyrocketing,” and that prices in Houston and Dallas “are creeping up as well,” the Kinder folks speculated:
“Part of the problem may be that most of the new housing is targeted at the high end of the market: Developers are building both single-family homes and apartments for luxury buyers and renters, which is one reason why first-time homebuyers as well as renters are having a harder time.”
Indeed that “may be” the case. In fact that “may be” a core reason why Austin has an affordable housing problem. There’s been nothing stopping developers during Austin’s four plus decades of booms from building more affordable housing. There has certainly always been a market, and a need, for affordable housing. It’s just that developers tend to build what makes them the biggest profit. That in and of itself is a major contributor to the crisis. Yet, the prevailing rhetoric among the City Council majority is that if we just turn developers loose on single family neighborhoods in central Austin then affordable housing will blossom.
In closing let’s return to the Mayor’s brag that he and his Council allies “didn’t give up.” Perseverance can be an admirable quality, but it depends on what someone is seeking with that perseverance. In Adler’s case he is trying to prove that he and his Council allies “didn’t give up” on the LDC, by passing a package of LDC changes during the final weeks of his eight years in office. This would be on an issue on which he and his allies have twice now been judged to have violated the law.
Maybe, just maybe, wanting to prove that you don’t “give up” is not the best rationale for making public policy affecting the homes, and home investments, of tens of thousands of people; especially when the numbers don’t back up your rationale for acting.
- If the Council wants a new Land Development Code why haven’t they just passed one, instead of also adding in upzoning of virtually the entire City, and against the will of tens of thousands of homeowners?
- How and when did voting lockstep with developers become part of being a “progressive?”
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This article was updated to correct a typo that said at least two Adler LDC allies will leave office in January. It is only one. Edits were also done to remove a pullquote box that did not have a pullquote. I apologize for the errors.