Central Austin is unaffordable in part because it has too few apartments. The lack of space for multi-family props up their rents, either by directly restricting supply or encouraging older units to "filter" up to a more expensive market.
There are too few apartments in central Austin because too much land is set aside for single family. Here is what I wrote a year ago in opposing the Zilker neighborhood's VMU opt-out request:
According to the City's residential acreage data a paltry 11% of the Zilker neighborhood's residential property is zoned multi-family. Only 2.6% is zoned at the reasonably dense MF4 or MF5 levels.
These multi-family parcels are nearly maxed out. According to data collected by the city demographer, ZNA had 933 occupied multi-faily units in 2005, or roughly 1,000 total units (assuming a reasonable vacancy rate). Using the residential acreage data above, the City's minimum site area standards, and a reasonable assumption about the mix of one-room and two-room apartments, I've calculated that the current zoning permits fewer than 1,200 multi-family units. While some of ZNA's 1,000 existing units are non-conforming (i.e., not built on MF-zoned property), there is clearly little room for more housing under current zoning entitlements. And we all know what happens when a developer asks for greater entitlements in the Zilker neighborhood.
Austin's affordable housing consultant, BBC Research & Consulting, apparently agrees. From its report:
It is unclear, based on a review of the city’s recent update to its existing Comprehensive Plan and future land use map, how much land is dedicated to high density single family development and multifamily development (e.g., single family detached homes on 3,500 sq. feet lots and multifamily density of 20 units/acre). These uses appear minimal compared to the amount of land dedicated to standard single family residential.
Note BBC did not conclude merely that we have a "minimial" amount of the land set aside for multi-family today. It concluded that even our long-range plans allocate too little land to multi-family.
Perhaps the city should establish baselines for neighborhoods -- e.g., neighborhoods' comprehensive plans should set aside a minimum of __% for multi-family. If they don't, Council won't approve their plans.