As of June 20th, 2019, the Austin Board of Realtors (ABoR) reports that the median price for single-family homes in Austin has hit an all time high of $400,000.
We often hear from City Council that we need to save the “affordable” old housing stock in the urban core from demolition and redevelopment. Typically, they are referring to single family homes. Given this perspective, it’s worth asking how many affordable single homes are there in Central Austin?
For the purposes of this analysis, we will define the urban core as the area bound by MoPac to the West, 290 to the south, and 183 to the north and east. The year defining “old” housing is homes which were built in or prior to 1970. Affordability is based on the 2018 Austin median income for a family of four of $86k per year. Data is compiled using the Austin Board of Realtors Multiple Listing Service.
For starters, below is a broad overview showing the median and average prices for homes in the urban core built before 1970 as of May 1, 2019.
|120 homes in urban core||Minimum||Maximum||Average||Median|
|Current home prices||$229,900||$8,500,000||$825,318||$546,500|
Using the rule of thumb that no more than 30% of gross monthly income should be used on housing, a family of four earning the median family income can afford to buy a $360K house (according to the mortgage affordability calculator) or rent one at $2150/month.
Let’s take a look at homeownership first.
As of May 1st, 2019, there were a total of 35 single-family homes built before 1970 available for sale for $360K or less and only two of those were west of I-35. The map below shows the distribution of available single-family homes at this price point. Notably, none of these homes have been updated for today’s energy efficiency and the status of the wiring, plumbing, and foundation is unknown. See Fig. 1
If we consider that a family of four would likely need at least three bedrooms, the number of available homes drops to 22, all of which are concentrated on the fringes of the urban core mostly east of I-35.
Of these houses, only 13 are outside the identified FEMA flood zone…
and only 15 have Central A/C.
The situation for single-family house rentals is very similar. Given a family of four earning the median income, the maximum suggested monthly rent should be no more than $2150/month. As of May 1st, 2019, there are 36 single family homes with at least two bedrooms available for rent in Austin’s urban core.
However, there are only 14 three-bedroom houses available at the rent level affordable for the median family income.
Finally, the multi-family affordable housing is becoming less and less available to families of 4 at the median income level. As of May 1st, 2019 45 apartments with at least two bedrooms are available across the urban core of Austin.
And only four of these have a minimum of 3 bedrooms.
Given that the Austin metro area is adding 105 people a day, preserving older single-family homes will not meet our housing needs in a way that is accessible or affordable for even the median income Austin family. A far more sustainable strategy for enhancing affordability in the urban core would be to add new homes with more units, like fourplexes, townhomes, and other missing middle housing types.