AUSTIN (KXAN) — Median family income in the Austin metro area grew by 11.5% from 2021 to 2022, but that hasn’t been enough to keep up with housing affordability, according to researchers.
In their new housing affordability outlook report for the area, researchers at Texas A&M University’s Texas Real Estate Research Center said the rise in home prices has been outpacing the increase in income.
They said the year-over-year growth in median home sales price was 21.8%.
“What we’re seeing in the Austin-Round Rock MSA is that there’s this increased differential, right, between median home price and median family income and generally as that … differential grows, it becomes increasingly more challenging for a household earning the median family income to qualify for that median priced home,” explained assistant research economist Clare Losey.
According to the center, in 2021, the median home price was $431,000, with the median family income at $98,900. That’s a gap of $332,100.
In the first quarter of this year, the median home sales price for the Austin MSA was $525,000. The median family income is $110,300. That’s a gap of $414,700.
Researchers said only 6.5% homes sold in Q1 were affordable to the typical first-time and repeat homebuyer who earns the median family income. They’d have to earn $175,000 a year to be able to afford the median sales price.
“Even despite the rise in mortgage interest rates, which would generally prompt a decline in home prices … home price appreciation likely will not follow that same pattern just given, again, the very strong demand side fundamentals and continued limited inventory for sale in the Austin market,” Losey said.
Pushback to south Austin affordable housing for people experiencing homelessness
According to the center, the home price increase was even higher for the lowest-priced 25% of homes sold.
Those prices spiked 29.2% between 2021 and 2022, said the report — indicating the price-to-income gap is having an even greater impact on low-income families.
“Purchase affordability declined [year-over-year] for Texas’ first-time homebuyers, particularly among the
lowest-income cohorts,” the report stated.
For example, researchers said, the typical family earning between $33,100 and $88,250 (extremely low to low income) can only afford a home between $99,30 and $353,000.
One type of affordable housing is Permanent Supportive Housing or PSH.
According to the National Healthcare for the Homeless Council, PSH combines affordable housing with health care and other support services, usually targeting those experiencing homelessness, “or otherwise unstably housed, experience multiple barriers to housing, and are unable to maintain housing stability without supportive services.”
That was the idea behind Capital A Housing’s project at 7331 Menchaca Rd., but neighbors raised multiple concerns.
“We are, of course, concerned about safety and security, because there will be people there who’ve had issues with substance abuse and also mental issues,” said Doug Rigdon, director of Strickland Christian School next door to the proposed project. “Something needs to be done for the homeless in our community. But this … this is not the answer.”
Integral Care, the local mental health and intellectual and developmental disability authority, was going to run the facility, but Capital A spokesperson Conor Kenny said the group is now looking for a site that can accommodate more units.
“We are exploring other affordable housing options for this site, which could include supportive housing,” Kenny said.
“Others in the Southbridge Villas neighborhood said they’re not concerned about who would live in the facility, but that building, a large building on such a small piece of property would exacerbate drainage and parking problems,” said spokesperson Jennifer Kendall.
“The flooding and water quality facilities required here are far stricter than those for single-family homes,” Kenny said.
All those opposed to the project also agree the city and developers need to be more transparent.
“So far, no one in the city has really reached out to us, and it seems like they’re trying to sweep everything under the carpet rather than to get community input, which I think is necessary,” Rigdon said.
Kenny said because the property is already properly zoned as limited office use, which includes group and congregate homes, counseling centers and rehabilitation facilities, the city does not require special public hearings.
Losey said pushback is common for PSH and other low-income housing.
“We generally call this nimbyism, or just NIMBYs in general — not in my backyard, and it really just denotes people who are opposed to the construction of housing, but particularly what’s generally referred to as low-income housing,” she said.
She said some associate failures of public housing, i.e. the projects, of the 1960s and 70s with what can happen in their neighborhoods.
“Ultimately, low-income housing has been shown to be really beneficial and actually doesn’t generally cause a decline in property values,” Losey said.
“Solving Austin’s affordable homelessness crisis means building homelessness housing. We hope to work with all community stakeholders to address this crisis head-on instead of continuing to put it off to yet another location and yet another year,” Kenny said.