Opinion: Minimum Lot Size Reform Is Gaining Traction in Texas Cities. That’s a Good Thing.
Austin should follow Houston’s lead and embrace this solution to address our housing affordability problem
By Jake Wegmann
Austin Chronicle
Would you like to build your own family-sized house in the 78757 ZIP code in Austin? It'll cost you, of course. In addition to hiring an architect and builder, did you know that the city government has a law that requires you to pay hundreds of thousands of dollars for the land the house will sit on? In fact, the city will force you to pay more just for the dirt under and around your new house than you would have paid for the median house (dirt included) in the 78757 as recently as 2010.
If that sounds odd, let me explain. Certainly it is true that the city of Austin doesn't actually have a municipal ordinance that dictates a dollar amount you must pay to buy land for your new house. But it might as well have such a law. Right now, buildable land parcels in the 78757 are selling for roughly $2 million to $3 million per acre. Since most of the privately owned land in the 78757 is zoned SF-3, and since SF-3 requires a minimum lot size of 5,750 square feet, that means that at the lower end of the price range you're looking at paying $264,000 for the smallest possible parcel you could build on.
Zoning and other laws that regulate what you can build and where are intended to safeguard, in the words of Texas law, "public health, safety, morals, or general welfare." Which of those are being protected by a 5,750-square-foot minimum lot size – or by making someone buy $264,000 worth of land to build a house? Certainly not public health and safety. Houston reduced its minimum lot size from 5,000 to 1,400 square feet starting in the late 1990s, and unless I am missing something, there is no crisis in public health or safety afflicting the tens of thousands of people who now live in small-lot modern townhouses in the Bayou City.
I don't mean to pick on Austin – I just happen to know the 78757 because I live there. Even in more middle-income suburbs, like Round Rock and Pflugerville near Austin and Frisco near Dallas, George Mason University researchers Nolan Gray and Salim Furth found strong evidence that minimum lot sizes are leading homebuilders to build on bigger lots than their customers would otherwise choose. Minimum lot sizes are driving up housing costs throughout Texas, at a time when our state's longstanding housing affordability advantage over other booming states is in serious jeopardy.
And unfortunately a proposal to allow more moderately sized lots in Texas cities was ultimately unsuccessful in the Texas Legislature. This bill – Senate Bill 1787 – was based on Houston's successful minimum lot size reform, which jump-started housing growth in existing neighborhoods rather than in far-flung suburbs. And also like Houston, SB 1787 provided neighborhoods the ability to opt out should they not like the changes.
But it isn't all bad news. In recent weeks, momentum is building toward lowering the minimum lot size requirement in both the city of Austin and the city of Dallas. In Austin, the City Council passed a preliminary resolution recommending reducing lot sizes from 5,750 square feet to 2,500 square feet. Then, within two weeks of the city of Austin's resolution, a member of the Dallas City Council proposed lowering Dallas' minimum lot size standard for residential lots to 1,500 square feet.
Cities can and do and should regulate all sorts of important things on privately owned land for real reasons, such as preserving mature trees, protecting historic buildings, and keeping housing away from polluting industrial facilities. But stopping people who can afford a less expensive place from living near people who can afford more is not a legitimate reason for regulation, and cities should stop doing it.
Jake Wegmann is an associate professor in the UT School of Architecture. His areas of expertise are in housing affordability and development, land use regulation, and urban form housing.