Politics
Austin Voters Decide on Half-Cent Sales Tax for Housing in November
Voters will decide in November on a half-cent sales tax increase that would apply to most retail transactions inside city limits and direct revenue to new affordable housing construction and related services.
How we reported this
The City of Austin placed a sales tax referendum on the November 2026 ballot that would raise the local rate from 8.25 percent to 8.75 percent on taxable purchases, with all new revenue restricted to affordable housing development and homelessness support programs within Travis County.
City budget documents from fiscal year 2025 show Austin spent $62 million on housing assistance programs last year while reporting a waiting list of more than 12,000 households for existing rental vouchers. The referendum arrives after the council approved the measure in June following three public hearings attended by residents from East Austin, South Congress and Rundberg neighborhoods.
Daily Costs and Service Access for Residents
A household spending $600 a month on groceries, clothing and household goods would pay an additional $36 annually under the proposed rate, according to calculations prepared by the city finance department. Local advocates note that the same revenue is projected to support construction of 1,200 new income-restricted units over five years and expand shelter bed capacity by 300 spaces at existing facilities on East Riverside Drive and in North Austin.
Policy analysts at the University of Texas Lyndon B. Johnson School of Public Affairs have examined similar dedicated taxes in other Texas cities and found that earmarked funds reached construction sites within 18 months when oversight committees included both city staff and appointed residents. The Austin measure would create such a committee with nine members, three appointed by neighborhood associations and six by the council.
City planning staff estimate the new units would be sited in districts already served by CapMetro routes 1, 3 and 20, reducing the average distance between new housing and existing transit stops to under half a mile. Residents without cars would gain access to those locations through existing bus service rather than new routes.
Next Steps Before Election Day
Ballots will be finalized by the Travis County elections office in September, after which the city will mail a voter information pamphlet to every registered household inside the city limits. Early voting begins October 19 and runs through November 1 at 18 locations, including the central library on Cesar Chavez Street and the North Village library on West Rundberg Lane.