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City plan would target Austin ‘stealth dorms’

Mike Wong has watched over the last decade as his neighborhood north of the University of Texas has morphed from small, single-family homes into large homes rented out to several unrelated people — often college students.

These so-called stealth dorms bring a plethora of problems, he said: noise, garbage, cars parked on the street. More significantly, homeowners who don’t want to live next-door to rowdy college students sell to developers who create more dorm-style housing, he said.

“We’ve lost six to 10 homes a month to this in recent months,” said Wong, president of the Northfield Neighborhood Association. “There is a domino effect.”

The Austin City Council is tentatively scheduled Nov. 21 to consider a measure that would target stealth dorms — roughly defined as single-family homes or duplexes that house more people than city rules allow.

The proposal from City Council members Mike Martinez and Chris Riley would ask city staffers to start drafting rules that would reduce Austin’s occupancy limit — the number of unrelated people who can live in a single-family home or duplex — from six to four.

It also would pull together a stakeholder group made up of real estate professionals and neighborhood activists to discuss the issue further and suggest ways to address it.

The city has no tally of the number of stealth dorms, nor does it have any tally of the complaints lodged with the Code Compliance Department about such properties.

Neighborhood advocates estimate there are at least 400 stealth dorms in neighborhoods near UT, and say they are starting to pop up in other parts of Austin. Wong has counted nearly 100 in Northfield, which is bounded by 51st Street, North Lamar Boulevard, Koenig Lane and Airport Boulevard.

Austin allows six unrelated adults to live in homes and duplexes in most single-family neighborhoods. Most cities allow no more than four, Austin city officials say.

The fact that Austin allows duplexes — three people per unit — in many single-family areas is also unusual, neighborhood advocates say.

“Austin is an outlier,” said Mary Sanger, a resident of the Hancock neighborhood near UT, who has researched occupancy limits in other cities.

Neighborhood advocates say developers are taking advantage of Austin’s leniency and turning small homes into large homes or duplexes, then renting out the rooms to several people — often more than six.

Sometimes the developers get city permits, build and pass inspections, then divide up homes later into more rooms to rent. In some cases, the rental rate for each bedroom is more than $1,000 a month, neighborhood advocates say.

Affordable, convenient

Real estate professionals say such housing can be the most affordable, convenient option for students who want to live close to campus.

They also say the city needs to be cautious about how it tackles the issue.

“Are occupancy limits the only way to regulate bad tenant behavior and parking on the streets? What is the problem we are trying to solve? I don’t think occupancy alone defines the problem,” said Mike McHone, a real estate broker who specializes in student housing and student housing development.

“We also need to look at what the unintended consequences would be” of an occupancy limit, McHone said. “Will you create more opportunities for housing stock to be utilized or fewer opportunities? … Austin is growing and we have to create more housing in the inner city.”

Neighborhood leaders say “stealth dorms” function like apartments but don’t have safety features and other features that would be required of an apartment complex, such as multiple parking spaces and fire sprinklers. Homes used as dorms also can cause parking, garbage and noise to spill into nearby streets and homes, they say.

Neighborhoods near UT have gathered more than 700 petition signatures in the past six months, asking the City Council to reduce the occupancy limit to four.

“Homeowners are finding themselves sandwiched between these monsters, with inadequate space for parking, loud parties at all hours and sometimes rude behavior,” said Mike Hebert, a resident of the Hancock neighborhood and a member of the Stop Stealth Dorms Coalition. “Families nearby are forced to sell because they don’t want to live that way.”

Enforcement difficult

Even if the city toughened the occupancy limit, it’s not clear how the city would enforce it.

City code inspectors currently can’t enter the inside of a home and count the occupants without a warrant or a resident’s permission, said Paul Tomasovic, a division manager for field operations at Code Compliance.

Inspectors can build a case by counting cars parked outside the home or monitoring the home’s utility usage. Tomasovic did not know how many complaints against stealth dorms, if any, have resulted in citations or penalties.

“We need to take a careful look at all sides of this, instead of assuming that reducing the occupancy limit is the right tool,” said Emily Chenevert, director of public affairs at the Austin Board of Realtors. “You also have to have the right enforcement in place because enforcement can be really challenging.”

Nearly a decade ago, Austin passed new land-use rules for West Campus to encourage the construction of large apartment projects and meet the demand for student housing near UT — and to reduce the development pressure on single-family neighborhoods nearby.

High-rise apartment projects have proliferated in West Campus but have not reduced the demand for more student housing in areas near campus, said Riley, the City Council member.

Riley, a former Planning Commission member, said Austin needs to find ways to accommodate more densely packed housing in the urban core. But, he said, “I think neighborhoods have raised a legitimate concern: that creating dorms in single-family neighborhoods isn’t consistent with the spirit of our code” for land development.

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