Austin’s HOME Initiative Changes ADU Regulations

Austin’s housing landscape is evolving—and for homeowners, the opportunities have never been better.

With the passage of Austin’s HOME Initiative, new building code changes now allow up to three housing units on a single residential lot. This shift is a game-changer for homeowners, investors, and developers alike, opening the door to increased housing availability, smarter land use, and powerful income opportunities through Accessory Dwelling Units (ADUs).

As Austin continues to grow, these updates couldn’t come at a better time. The city needs more housing—and homeowners now have a clear path to add value to their property while helping meet that demand.

What Is an ADU?

An Accessory Dwelling Unit (ADU) is a smaller, independent residential structure located on the same property as a primary single-family home. Under Austin’s Land Development Code, an ADU must include:

• A habitable living space

• A full bathroom

• A kitchenette with a sink or dishwasher (separate from the bathroom)

In the past, strict regulations made it difficult—or impossible—for many homeowners to build ADUs. The HOME Initiative has changed that.

What Is Austin’s HOME Initiative?

HOME stands for Home Options for Middle-Income Empowerment. It’s a series of amendments to Austin’s Land Development Code designed to increase housing flexibility, density, and affordability across the city.

By removing long-standing restrictions, HOME allows homeowners and developers to build more units on existing lots—without changing neighborhood character—while addressing Austin’s ongoing housing shortage.

Key 2024 ADU Regulation Changes

The updated rules apply to SF-1, SF-2, and SF-3 zoning districts and include several major improvements:

• Minimum lot size reduced from 5,750 sq ft to 2,500 sq ft

• Up to three units allowed on a single residential lot

• Increased building coverage:

  • From 40% to 55% for two units

  • Up to 60% for three units

These changes significantly expand what homeowners can build—and where.

Why This Is a Win for Austin Homeowners

Austin continues to attract new residents at a rapid pace—nearly 90 people per day—while land remains limited and home prices continue to climb. With the average home price exceeding $500,000, many buyers are priced out of the market.

The HOME Initiative offers a solution.

Homeowners can now:

• Add rentable units to generate income

• Create housing for family members or students

• Increase long-term property value

• Maximize land use without selling or relocating

Developers, too, benefit by being able to responsibly build multiple units on a single lot, increasing housing supply citywide.

Benefits of Building an ADU

ADUs offer flexibility, financial upside, and lifestyle benefits, including:

• Long-term rental income

• Short-term rental opportunities

• Space for multi-generational living

• Private guest accommodations

• Dedicated work-from-home or studio space

• Housing for students or essential workers

• Increased property value and resale appeal

The Opportunity Is Here

Austin’s HOME Initiative has unlocked new potential for homeowners who want to do more with their property—without compromising quality or neighborhood integrity.

Whether you’re considering a guest house, rental unit, or long-term investment, ADUs are now more accessible, flexible, and valuable than ever before.

If you’ve been waiting for the right time to build, this is it.