Austin HOME Initiative Developer Guide

What HOME Is

HOME stands for Home Options for Middle-income Empowerment. It is a two-phase Austin land development code reform passed by City Council in 2023 and 2024 that allows higher-density residential development on parcels previously restricted to single-family use. The intent: address Austin's housing supply shortage by enabling small-scale infill builders to produce more units per parent lot without changing the visual character of established neighborhoods.

Phase 1 went into effect late 2023. It allows up to 3 units on what were single-family parcels across most of Austin's residential zoning districts.

Phase 2 went into effect in 2024. It reduced minimum lot size to 1,800 sqft (down from 5,750 sqft in most SF zones), introduced Site Plan Lite for 4-16 unit projects, and Infill Plat for streamlined small-lot subdivision.

Together, the two phases changed the Austin development math on thousands of central parcels. Parcels that did not pencil as single-family teardown-and-rebuild often pencil as 3-6 unit small-lot product. Parcels that did not pencil as 4-unit infill often pencil under Site Plan Lite. The data is showing up in Q1 2026 permit numbers: ~870 HOME-eligible new permits in central Austin in a single quarter, against zero in the equivalent quarter pre-HOME.

This guide is the working reference for builders and developers evaluating HOME projects. It is not legal advice and it does not replace zoning verification with the City of Austin Development Services Department. Final eligibility determination always runs through DSD pre-development review.

Phase 2 Mechanics

Phase 2 is the bigger structural change. It enables small-lot subdivision through the Infill Plat process and unlocks 4-16 unit infill projects through Site Plan Lite. The core change: minimum lot size dropped from 5,750 sqft (typical SF-3) to 1,800 sqft. This is the rule that makes 78704 small-lot product economically viable.

Phase 2 small-lot subdivision math

A standard 7,500 sqft 78704 parent lot under Phase 2 can be subdivided into 3-4 small lots, each with its own structure, each sold separately. The math example:

• Original parent lot: 7,500 sqft, single-family product with $1.4M list price typical
• Phase 2 subdivision into 4 small lots of 1,875 sqft each
• Each small lot supports a 1,200-1,500 sqft 2-story structure
• Each unit lists at $675K-$795K typical, total project gross $2.7M-$3.18M
• Net to developer typically 40-60% higher than single-family teardown-and-rebuild on the same parcel

The math holds when the parent lot is in a submarket where the small-lot product price band intersects qualified buyer demand. 78704, 78745, 78702, and 78722 are the strongest current submarkets. Outer SF-3 and SF-4 zones (78745 south of Stassney, parts of 78753) often do not pencil because the small-lot product price ceiling is too low against per-unit construction cost.

Phase 2 frontage and access

Each subdivided small lot must have legal access to a public right-of-way. This is the binding constraint on many parent lots: a 7,500 sqft parent with only 50 ft of frontage can only support 2-3 small lots accessible from the front street, even though the area math allows 4. The remaining lots require a flag-lot configuration or a private access easement, both of which add cost and complexity. Pre-vet frontage as part of acquisition due diligence.

Site Plan Lite

Site Plan Lite is the streamlined site plan review process for HOME-Phase-2 projects of 4-16 units. It is the mechanism that makes mid-scale infill economically viable on Austin timelines.

Site Plan Lite vs traditional commercial site plan

The 6-9 month timeline compression is often the difference between a viable project and a project that does not pencil under construction loan interest assumptions. A 16-unit infill project that takes 6 months less to entitle saves the developer 6 months of land carry plus accelerated revenue recognition by 6 months on the back end.

Site Plan Lite eligibility

• 4-16 residential units total
• HOME-Phase-2-eligible parent parcel (passes the 5-gate eligibility filter above)
• Project meets simplified drainage, parking, and access standards
• No mixed-use or commercial component (residential-only)
• Total impervious cover within underlying zoning maximum

Pricing Data Q1 2026

Closed sales data on HOME-Phase-2 small-lot product across central Austin submarkets in Q1 2026:

The submarket pricing band is the conservative anchor for new HOME pro formas. Individual projects can run higher with strong product design, optimal lot positioning, and aggressive MLS launch strategy. They can also run lower with weak product, poor positioning, or self-marketed slow absorption that triggers price drops.

For the full new construction submarket dataset including DOM, closings, and absorption months across the entire MSA, see the Austin new construction market report.

Common Builder Mistakes

Patterns observed across the first 18 months of HOME-Phase-2 closings that cost builders money:

1. Skipping pre-development eligibility verification

Builders who submit Site Plan Lite or Infill Plat applications without first verifying parent lot eligibility through DSD pre-development review hit a 30-40% rejection rate. Each rejection adds 60-90 days plus resubmittal cost. The pre-development inquiry is $1,500-$3,000 and 30-45 days. It pays for itself.

2. Underwriting parking incorrectly

Reduced parking requirements vary by submarket, transit corridor proximity, and individual zoning interpretation. Underwriting a project at 1 space per unit when the actual requirement runs at 1.5 typical can force a unit count reduction or a redesign mid-project. Verify per parcel, not by general HOME rule.

3. Designing units that miss the buyer pool

The 78704 small-lot buyer pool wants 2-bed/2.5-bath, 1,200-1,500 sqft, 2-story, with at least one outdoor space. Builders who design 1-bed/1-bath 800 sqft units to maximize per-parcel unit count discover the price ceiling is not where they assumed. Smaller is not always better - the buyer pool has minimum-viable-product preferences and pricing reflects them.

4. Self-marketing slow absorption

Self-marketing HOME product extends DOM by 30-60% versus MLS-listed. The carry cost on extended DOM typically exceeds the saved commission. Run the math on the specific project before committing to self-marketing as a savings strategy.

5. Late condo regime setup

HOME projects that close as condo regimes need the regime structure (CCRs, HOA, declaration of condominium) finalized before MLS launch. Builders who scramble on regime setup mid-listing lose 30-60 days and create transaction-certainty problems with represented buyers. Set up the regime during entitlement, not during marketing.