Under state law, in order to designate Homestead Preservation Districts, a municipality must meet one of the following criteria:
A municipality must have a population of more than 750,000 and be located in a uniform state service region with fewer than 550,000 occupied housing units, or
A municipality must have a population of at least 1.18 million and be located predominantly in a county with a total area of less than 1,000 square miles with an adopted urban land bank demonstration program.
Currently, the city of Austin does not meet either of these criteria and is therefore unable to establish additional Homestead Preservation Districts at this time.
Once a municipality meets one of the above criteria, it may designate areas as Homestead Preservation Districts. To qualify as a Homestead Preservation District, an area must be composed of census tracts that form a spatially compact area. That area must meet all of the following criteria:
The area must have fewer than 75,000 residents;
The area must have an overall poverty rate at least two times the poverty rate for the entire municipality; and
Each census tract in the area must have a median family income less than 80 percent of the median family income for the entire municipality.
Once a Homestead Preservation District is established, it can continue to be valid even if its population, poverty rate, or median family income change.