Accessory Dwelling Unit “Condo Regimes” on Austin’s East Side

Here at Loan Ranger Capital, we call the East Side home. It’s the market we know best, and it’s where we spend the majority of our days. It also has a zoning capability that not many other sections of Austin have: the ability to split a lot into condo units.

     The accessory dwelling unit (ADU) condo regime works like this. Older properties throughout Austin (though mostly on the East Side), traditionally had long skinny lots. These lots would include a fair-sized house and a decent yard. As time has gone on, more and people looked to live closer to downtown. The various amenities and fast paced lifestyle became a more attractive option for people with no children or smaller families. After much of the available housing was taken, the City of Austin adjusted regulations decreasing the minimum size of the lots. That meant that most of the lots in East Austin were perfect for this type of housing.

     When the East Side’s housing market started to heat up, the pent-up demand for more housing made these “ADUs” the go-to for builders here. Soon lots all around the East Side began to have two structures built on them. One being a larger “A” unit that was around 1500 sq. ft. The smaller “B” unit was at a maximum of 1100 sq. ft., depending on the lot. This meant that both properties were sacrificing much of their yards. The buyers going after these properties don’t seem to mind, which improved demand for these units.

     Accessory dwelling units will continue to see more demand, as people continue to move to Austin’s urban core. With supply still near all time lows, having these additional properties shore up some of that extra demand is great. They should do wonders with helping address Austin’s housing shortage. It’s our belief that additional ADUs will help temper demand somewhat.

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