The 2026 Alpha: Why “Site Plan Lite” Is the New Market King
Happy New Year.
While the headlines are obsessed with 90-foot towers (DB90), the smartest money I’m tracking in the Austin pipeline right now is focused on a much smaller number:
16 units.
Under Ordinance No. 20250306-037, Austin officially right-sized the rules for small-scale residential infill. We’ve spent the last month digging through filings and early approvals, and the conclusion is clear:
If you aren’t building a 100-unit podium, you shouldn’t be waiting in the 100-unit permit line.
This is where Site Plan Lite — Austin’s expedited review path for small projects — becomes the dominant development strategy for 2026.
1. The “Drainage Cheat Code” (8,000 sq ft)
For years, anything denser than a duplex meant sacrificing serious money just to manage water. Small projects routinely lost $150k+ in land value and engineering costs to carve out on-site detention ponds.
That constraint is effectively gone for infill.
The Rule:
Projects with under 8,000 sq ft of total impervious cover are exempt from full drainage studies and on-site detention, subject to applicable overlays and water-quality constraints.
The Trigger:
If a project exceeds 4,000 sq ft of new impervious cover, a simplified drainage plan is still required showing discharge to the right-of-way or storm system — but the on-site “micro-pond” requirement is bypassed.
The Impact:
You can now build 5–16 units on infill sites (typically up to ~1 acre), with Small Project status extending to sites up to 1.5 acres, without losing 20% of your buildable footprint to a hole in the ground.
This is a structural shift in small-lot economics — not a marginal tweak.
2. Velocity vs. Volume (The 90-Day Requirement)
In a “higher for longer” interest-rate environment, time = risk.
The ordinance doesn’t just encourage faster reviews — it establishes a 90-day approval requirement for qualifying residential infill site plans that meet the standards.
Compare that to the 12–18 month timeline still common for traditional consolidated site plans.
Here’s what that delay actually costs on a typical deal:
Land loan: $2,000,000
Interest rate: 8.5%
Monthly carry: ≈ $14,166
A 9-month delay equals:
9 × $14,166 = $127,494
Pure carry. No upside.
Site Plan Lite isn’t just cheaper engineering — it’s six figures of margin protection.
3. The Infill Stack: HOME Phase 2 + Lite
A clear pattern is emerging in East Austin (District 3).
Developers are stacking two policy tools:
HOME Phase 2 to subdivide larger single-family lots into ~1,800 sq ft mini-lots
Site Plan Lite “Small Project” status to eliminate standard notification requirements that historically triggered neighborhood friction
The result is speed, certainty, and liquidity in one stack.
These projects move faster, carry less entitlement risk, and exit cleanly into a for-sale market segment that’s holding up better than large-format multifamily.
The Watch List (Exclusive Data)
Our internal analysis identifies approximately 7,800 Austin lots that fall squarely into the Site Plan Lite sweet spot.
This week, we’re highlighting three blocks in 78702 and 78721 where the topography supports the 8,000 sq ft impervious-cover exemption with no engineered grading required.
Want the case numbers behind the first “Lite” approvals?
Premium subscribers can log in to view:
Specific filings and simplified drainage plans
Approved unit mixes from the December approval wave
Stay tuned.
2026 isn’t the year of the mega-tower.
It’s the year of the infill specialist.
— J. Williams
Lead Analyst, ATX Zoning Watch