Austin Housing Reforms Could Influence Michigan Legislation

Michigan housing advocates are pointing to Austin, Texas, as they try to build support for Gov. Gretchen Whitmer’s “grand bargain” housing affordability agenda in the state Legislature.

Advocates say a multi-year set of zoning, permitting and code reforms in Austin helped drive a surge in homebuilding – and that the resulting increase in supply coincided with a meaningful decline in rents. They argue Michigan could see similar benefits if lawmakers advance Whitmer’s proposed Housing Readiness plan and related measures to reduce regulatory barriers.

“Bipartisan housing legislation can help us address Michigan’s dire housing shortage,” Lauren Strickland, executive director of Abundant Housing Michigan, said in a statement. “Similar housing reforms in Austin proved successful, driving down rents, especially for apartments that serve lower-income households.”

Strickland pointed to a new study from The Pew Charitable Trusts detailing how Austin’s reforms helped enable a construction boom.

“Some municipal leaders are worried about change, which is understandable, but this data is a clear and objective reminder that adding more homes helps manage costs for those that need it most,” Strickland said.

Whitmer’s housing agenda heads toward Lansing negotiations

In her February State of the State address, Whitmer outlined a housing agenda that includes a new state tax credit and a broader push to cut permitting delays and regulatory hurdles. She also said the state should make it easier to redevelop vacant and brownfield sites.

Key elements of the plan have not yet been formally introduced, and the proposal remains in a negotiating phase as lawmakers weigh competing priorities.

Pew’s report gives advocates a data-focused argument as they anticipate opposition from local governments and other stakeholders wary of density and zoning changes.

“The law of supply and demand never fails,” Chris Nebenzahl, vice president for rental economics at John Burns Research and Consulting, wrote in a LinkedIn post about Austin’s experience.

By the numbers: Austin’s supply surge and rent pullback

Austin’s rent growth accelerated in 2021 during the COVID-19-era housing boom, similar to other Sun Belt metros. The region’s tech-sector job growth added demand, and Tesla opened a manufacturing plant in 2022 that now employs more than 20,000 workers.

Austin added about 120,000 homes from 2015 to 2024, with a large share delivered in the past three years, according to Pew. The metro’s housing stock increased by about 30% over that period – more than triple the national pace.

Median asking rent fell from $1,546 in December 2021 to $1,296 in January 2026. Austin shifted from about 15% above the U.S. median asking rent to roughly 4% below it, even as population continued to grow.

In inflation-adjusted terms, city rents fell 19% from 2021 to 2025, while national rents rose about 10%. Rents in other high-growth Texas markets increased about 6% over the same period, diverging from Austin’s decline.

What changed in Austin

Pew’s report outlines multiple reforms and policy shifts that helped increase the pace of development:

Zoning and land use: Vertical Mixed Use zoning (since 2007) reduced parking requirements by 60% and enabled more than 17,600 units. The city also pursued targeted rezonings, downtown density bonuses and height incentives tied to income-restricted units near the University of Texas.

Accessory dwelling units and infill: Reforms in 2015 — including smaller minimum lot sizes, reduced parking requirements and removal of a second-driveway mandate — expanded the ability to build ADUs on most single-family lots. From 2015 to 2024, Austin permitted 2,850 ADUs, about 7% of new single-family and townhouse units.

Parking and code changes: In 2023, Austin eliminated minimum parking requirements for most uses and expanded “missing middle” housing options through overlays and bonuses.

Affordability programs: Voters approved housing bonds totaling $600 million in 2018 and 2022. The city’s 2019 Affordability Unlocked program relaxed height, unit caps, parking and other rules for projects where at least half of units are income-restricted. Density bonuses produced hundreds of affordable units and supported towers as tall as roughly 300 to 400 feet in some areas.

HOME initiative: Adopted in 2023 and 2024, HOME allows more small multifamily development — including duplexes and triplexes — and lowers minimum lot sizes from 5,750 square feet to 1,800 square feet. It also provides incentives for projects that preserve parts of existing structures and street-facing facades.

Permitting and AI: Austin’s “Site Plan Lite” and an expedited review track cut site-plan timelines by more than half by 2024. A 2025 AI precheck pilot is intended to flag issues earlier in the process.

Single-stair rule: A 2025 code change allows apartment buildings up to five stories and 20 units above grade to use a single stairway, a change supporters say can reduce costs and make smaller infill projects easier to finance.

What it means for Michigan

Michigan has not experienced the same job and population growth as Austin, and statewide population growth has been relatively stagnant. But housing advocates say the state’s affordability challenges are rooted in years of underbuilding and restrictive local zoning – pressures compounded by higher construction costs and limited wage growth.

State officials have estimated a shortage of 119,000 homes. The National Low Income Housing Coalition has separately estimated that Michigan needs 195,000 additional homes for extremely low-income households.

Whitmer’s allies want lawmakers to view Austin’s experience as evidence that policy changes can materially increase supply and help cool rents – and as a model that could inform legislation aligned with Whitmer’s agenda.