NEWS BRIEFS Builders say Austin’s permitting process remains slow, expensive
2022 REAL ESTATE EDITION
INCREASING RESOURCES
Since 2018, Austin’s Development Services Department, DSD, has grown from 414 sta with a $57.97 million budget to 475 sta and a $73.92 million budget.
ADDRESSING VACANCIES DSD is seeking to reduce its vacancy rate to address the workload. Vacancy rate Budgeted employees
PERMITTING WORKLOAD
BY BEN THOMPSON
worst they had ever seen nationwide. Since then, the department has seen numerous operational changes in addition to more funds and sta . Department spokesperson Tara Long said the department has been undergoing improvements, includ- ing expanding digital services and consolidating its o ces. Still, the most recent survey of the department’s customers each showed less than half of were satis ed with their service. “The fact that it takes anywhere from 12-18 months to get a site plan or permit through the city of Austin really makes it di cult to do any- thing in a timely manner,” said Josh Delk of ArenaMan Development Co. Bringing new single-family housing to Austin is also uniquely expensive due to some of the costs the city imposes on developers here, accord- ing to a study from Austin Board
FY 2020-21
Austin’s Development Services Department, responsible for moni- toring safety and code compliance during all construction in the city, continues to face high demand in the expanding Central Texas market. From a minor home renovation to a new apartment complex or o ce tower, the department is involved to ensure all new construction ts within Austin’s often-complex processes and regulations. As of late June, department sta — about 430 strong with dozens of vacancies—had processed more than 12,200 development applications, issued more than 52,100 permits— more than 40,000 of which were for residential projects—and completed about 260,000 building inspections this scal year alone. Previously, an outside consultant labeled Austin’s system as among the
87,640 permits issued
402,442 building inspections
413
2020
12.59% vacant
425
2021
FY 2021-22*
7.53% vacant
52,177 permits issued
261,782 building inspections
475
2022
8.84% vacant
*AS OF JUNE 27
SOURCE: CITY OF AUSTIN COMMUNITY IMPACT NEWSPAPER
of Realtors and the Home Builders Association of Greater Austin. For a project containing 200 homes, devel- opers in Austin can expect to pay more than $18,000 per unit, while homebuilders in Dallas, Houston, San Antonio and Fort Worth pay between $4,841-$11,830. District 4 Council Member Chito Vela, who pointed to an improved permitting process as a priority for
his rst term at City Hall, said the “cumbersome” system is rife with frustrations and headaches for those seeking to navigate it, especially compared to other large cities. “It seems to me that people are kind of confronting the reality of the Austin permitting process more directly than they have just a few years ago, and they’re, generally speaking, not happy with it,” he said.
No relief in rental rate for greater Austin
RENTS ON THE RISE
BY SUMAIYA MALIK
com. The highest increase was in Class A going up by about $500 a month with modern, top-of-the-line construction and amenities less than 10 years old. Zach Shoaib, a software developer at General Motors, and his roommate felt the sharp increase in rent when they started looking to move from West Campus by The University of Texas at Austin, where they paid $1,700 a month for a two-bed, two- bath apartment to Northwest Austin, to be closer to Apple and GM. “The Domain was a lot more expensive in the $2,100-$2,300 range,” Shoaib said. They found a Class A two-bed, two-bath apartment on Parmer Lane close to Apple for $1,900, which they thought was a great compromise. “If you’re exible on location and you’re open to the northwestern suburbs or even Cedar Park or slightly outside of Austin city limits, you’ll de nitely have more options that will be a little bit less of a sticker shock,” Conrado said.
While the occupancy rate has not uctuated too much, monthly rent prices in the greater Austin area have been on the rise for the past ve years.
Rent prices have been continu- ously increasing since the begin- ning of 2021 with little change in occupancy rates, which have only dropped by about 1 percent. According to Courtney Conrado, a Realtor with Apartment Hunters, there is a shortage in inventory. “And there’s a lot of new apart- ments being built, but they can’t be built fast enough for how many people are moving to Austin,” Conrado said. The average price for a one-bed- room apartment in Austin is more than $1,500 for the smallest oor plan, around 600 square feet or less, Conrado said. In Greater Austin, the price escalation began in March 2021 and has gradually increased through May 2022. The occupancy rate also followed that same trend. Apartments across all classes saw rent increases of $400-$500 per month, according to multiple sub- market reports on Apartmentdata.
$2,000
$1,648
$1,750
$1,315
$1,302
$1,250
$1,250 $1,500
$1,183
$1,000
$0
MAR. 2018
MAR. 2022 MAR. 2021 MAR. 2020 MAR. 2019
100%
91.8%
96% 92% 88% 84% 80%
89.9% 90.8% 90.1%
88.9%
0%
SOURCE: APARTMENTDATA.COM COMMUNITY IMPACT NEWSPAPER
17
NORTH CENTRAL AUSTIN EDITION • JULY 2022
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