New reports continue to spotlight the intensifying damage of high property taxes and poor local government decisions on citizens in Texas’ capital city.
By the end of this year, real estate company Zillow expects Austin will be a harder place to afford a home than Seattle, Miami, and even New York City. The report states by December, Austin will be the least affordable city in the United States (outside of California).
“The quick rise in home values compared to the relative stability of income is what’s causing a lot of that lack of affordability,” said Nicole Bachaud, an economic data analyst and the report’s author.
“If you’re not in the technology industry, and you’re not earning those wages, you’re probably going to be priced out,” another expert said.
The Austin Board of Realtors reported that in June, Austin metro’s median home price was more than $482,000.
Though the housing market is hot because of numerous factors (such as an influx of wealthy out-of-state homeowners and renters migrating to Austin), Bachaud explained the city should do their part to help struggling families by removing some of their burdensome building and zoning regulations.
“One way for places like Austin and California to ensure that current residents aren’t being priced out as housing burdens rise and remain high is to relax zoning restrictions and create paths that make building new inventory easier,” Bachaud wrote. “Increasing the supply of more affordable housing units – including high density housing such as townhomes and condos – can also help to ease some of the price pressures for many who find current values unreachable.”
Austin’s city officials have long been criticized for their encyclopedia of construction fees and regulations that have suffocated new affordable housing. Indeed, a 2016 report showed that if a developer wants to build a four-story apartment complex in Austin, they could pay more than $1 million for city hall’s fees and requirements—while in the City of Dallas, they’d only pay roughly $120,000.
All of city officials’ extra charges mean citizens have to pay that much more in rent or a mortgage.
“Every regulation the city does just adds another layer of cost to what would be an affordable house otherwise,” said Donovan Davis, president of Austin firm Danze and Davis Architects, in 2019. “What used to cost maybe $75 for us to do a site plan in Austin now costs over $2,000 because of the amount of time it takes to do all those regulations that we do.”
On top of city hall’s endless fees, Texas’ government officials also charge some of the highest property taxes in the United States. The Democrat-run Austin City Council, for example, has raised taxes by a startling 150 percent over the last 13 years; a 2008 annual city property tax bill for the median homeowner was $705, but today, it’s more than $1,740 and still rising.
The state Legislature could’ve given substantial property tax relief to struggling Texans during their regular legislative session earlier this year, but they chose not to. The state currently has a $7.85 billion budget surplus of taxpayer cash, which they could give back to citizens in the form of property tax relief, but their final decision remains to be seen as they are currently in the middle of a summer special legislative session.
Citizens concerned about rising taxes and cost of living may contact their state representatives, their state senators, or the governor.