Big cities, affordable homes: starter home production in U.S. urban areas

This Professional Report considers the current state of affordable starter home development in high-demand U.S. urban areas, seeking to better understand the current barriers in place, and questioning potential solutions to increase production. In this report, an assessment of previous existing literature identifies the barriers in not only affordable starter home development, but affordable single-family home development in an urban context. This report identifies the culprits in rising residential land prices, construction costs, delayed development approval, restrictive zoning policies, and protectionist homeowners. This report employs the use of two case study communities in the Austin-Round Rock-Georgetown MSA and San Antonio-New Braunfels MSA which offer affordable starter homes, in an attempt to discern potential lessons for local and state government. An additional analysis is conducted evaluating contributing factors to starter home affordability outside of home list price, including municipal service access, local amenities, transportation expense, and impact fee rates. This report finds that a reduced lot and home size, as well as cheap residential land, were the most significant contributing factors in producing affordable starter homes in both communities. Recommendations for local government to increase starter home production informed by both case studies and existing literature include reducing minimum lot size, reducing home square footage, promoting infill housing development, and implementing greater workforce training programs in the construction and skilled trade industries. This report also recommends increasing the role of state government in land-use planning and housing development.