Austin’s HOME Initiative: What Phase 1 and Phase 2 Actually Allow in 2026

The Home Options for Middle-Income Empowerment Initiative, known citywide as HOME, is the single biggest rewrite of Austin’s residential zoning in decades. It did not create a new incentive program in the traditional sense. It changed what is allowed by right on tens of thousands of single-family lots across the city.

HOME is a two-phase Austin Land Development Code amendment that raised the by-right unit count on single-family lots to three and cut the minimum lot size needed to build a home from 5,750 square feet to 1,800 square feet. Phase 1 addressed unit count. Phase 2 addressed lot size, setbacks, and the compatibility standards that govern how close new construction can sit to existing single-family homes.

HOME is one of three interlocking Austin policies covered in our pillar guide to HOME, ADU rules, and small-lot housing; this piece goes deep on HOME specifically.

Phase 1: Up to Three Units, By Right

Austin City Council approved HOME Phase 2 in May 2024, also on a 9-2 vote. Phase 2 went further than Phase 1 by changing the lot itself, not just what sits on it. Three changes matter most for a developer evaluating a site:

Minimum lot size dropped to 1,800 square feet. Phase 2 created a new land-use category, small lot single-family residential use, permitted in SF-1, SF-2, and SF-3 zoning districts. A lot as small as 1,800 square feet can now support one standalone unit under this category, a fraction of the previous 5,750-square-foot threshold.

Setbacks reduced to 10 feet, with a porch option at 5 feet. Smaller required setbacks mean more of a small or oddly shaped lot becomes buildable area, which matters directly for unit size and configuration on constrained parcels.

Compatibility buffer shrunk from 540 feet to 75 feet. Compatibility standards govern how tall and how close new multi-story construction can sit near existing single-family homes. Reducing that buffer from 540 feet to 75 feet opened a substantially larger footprint of land near single-family neighborhoods to taller, denser development that would previously have triggered compatibility restrictions.

Citywide applications under Phase 2 began August 2024, with full citywide acceptance, including properties in the Wildland-Urban Interface area and those designated in the city’s Uprooted Report, following by November 2024.

Rollout Timeline

How HOME Stacks with the Citywide Density Bonus Program

HOME Phase 1 and Phase 2 are by-right entitlements. They do not require an affordability commitment, a discretionary hearing, or a negotiated agreement with the city. The Citywide Density Bonus Program, approved in May 2026, is a different tool entirely: a discretionary program that trades additional height and density for affordable-unit commitments, aimed primarily at larger multifamily and mixed-use projects rather than single-lot infill.

The two are not competing paths for the same project type. A developer working a standard single-family lot for a two- or three-unit build will typically rely on HOME Phase 1 and Phase 2 alone, sometimes alongside an ADU addition on the same parcel or a small-lot subdivision if the lot is large enough to split. A developer assembling a larger site, or working near a transit corridor, may find the density bonus program layers additional height and unit count on top of what HOME already allows, in exchange for a defined share of affordable units.

Distinguishing which path, or combination of paths, applies to a given site is a feasibility question, not a paperwork question. Getting it wrong in either direction, either underbuilding a site that qualifies for more, or overcommitting to affordability terms a smaller project does not need, has a direct cost.

Constraints HOME Does Not Override

Private deed restrictions and HOA covenants. The city’s zoning code does not override private covenants. A lot that is fully eligible under HOME Phase 1 and Phase 2 can still be blocked, or limited in unit count, by a neighborhood’s own deed restrictions, which the city has no authority to waive.

Displacement-related scrutiny. HOME remains politically contested, particularly regarding its effect on Austin’s Eastern Crescent neighborhoods. That scrutiny has not changed the underlying by-right entitlement, but it has kept the program under active council review, which is part of why a “last updated” check before finalizing a project strategy matters.

Case Reference

JDJ’s Garland Avenue project illustrates how a density bonus and by-right unit-count strategy can be layered on a single site to maximize yield without sacrificing approval timeline, a similar analytical exercise to what a HOME Phase 1 and Phase 2 stack requires on Austin infill parcels.

Where This Leaves a Developer

HOME Phase 1 and Phase 2 answer the question of how many units a lot can support and how small that lot can be. They do not answer whether a specific parcel’s trees, floodplain status, easements, or private covenants will let a developer actually build to that ceiling, and they do not, on their own, tell a developer whether a small-lot subdivision or an ADU addition produces a better return on a given site.

Get a Site-Specific Read

A HOME Phase 1 and Phase 2 unit count is a starting number, not a guaranteed outcome. JDJ’s Feasibility & Entitlement Eligibility Report models your specific lot against current HOME thresholds, tree and floodplain constraints, and available density bonus stacking, delivered in 48 to 72 hours, flat fee. Order a Feasibility Report or book a free consultation with our entitlement team. For how HOME fits alongside ADU rules and small-lot subdivision on a single site.