Austin City Council Approves Density Bonus Program, Reviews HOME Initiative Changes

In May 2026 Austin City Council approved the DB90 density bonus program. The measure permits buildings up to 90 feet in exchange for affordable housing commitments. Officials are also seeking changes to the HOME housing rules in 2026 because Phase 2 has produced less activity than Phase 1 even though it allows up to three units on most residential lots.

Policy Changes and State Laws

New state laws passed in 2025, including HB 21 and SB 15, are reshaping Austin's affordability requirements. These laws impose stricter thresholds for tax exemptions and give the state broader authority to override local housing decisions. The DB90 program and the review of HOME rules operate alongside these state measures.

The city's housing stock grew by 120,000 units between 2015 and 2024. That increase represented a 30 percent rise and exceeded the national growth rate of 9 percent. Regulatory reforms such as the HOME Initiative and reduced parking requirements contributed to a surge in new construction that produced a decline of more than 16 percent in median rents from 2021 to 2026.

Local Housing Stock and Rent Trends

Residents have already experienced the results of earlier construction growth through lower median rents. Additional units permitted under the HOME rules and the new DB90 program are expected to add further supply over time. State laws from 2025 continue to influence how local affordability requirements are applied.

Officials have indicated they will pursue modifications to HOME Phase 2 provisions during 2026. The DB90 program is in place following its May approval. Residents will observe the combined effects of these local actions and the 2025 state laws as new projects move forward and as rule changes are considered.