City Hall Hustle: CURE-ing the Density Bonus Gridlock

Even at City Hall, where parenthetical policy permutations are task-force-tweaked and stakeholder-scrutinized, the Downtown Austin Plan's lag time is a little stunning: City Council called for a plan in late 2005. It selected ROMA Design Group nearly a year later. And ... cut to last Thursday, Jan. 14, where one of the plan's most important components came before council – a density-bonus program. And as we approach the fifth year of planning for a plan, we won't be moving on that soon, either.

The delay came from the Planning Commission, which Jan. 13 recommended a four-month moratorium on adopting rules for denser building Downtown. Planning Chair Dave Sullivan is cognizant of the Downtown Plan's snail's-pace progress – nevertheless, he and the commission subcommittee involved in the issue (Sullivan, Danette Chimenti, Mandy Dealey, and Jay Reddy) felt some things merited a closer look. "Mandy's main concern, which I think we all share, is that this process could've been done better had there been a citizens advisory committee." Dealey, the vice chair of Planning and chair of the Downtown Commission, said: "We may at the end of all this come to the conclusion that what's on the table is as good as we can get. But there are enough people who seem to think it's not. I would just like the opportunity to have everybody in the room and just air it out." And with no major construction projects expected until 2012, according to co-planners HR&A Advisors Inc., "a four-month delay on a plan that we think will be actuated over 50 years is a small thing," says Sullivan. "For 2010, we have time to plan."

While there's room for debate over whether process concerns merit delay, more concrete issues also persist – like affordable-housing contributions. As described at the Jan. 14 meeting by Jim Robertson, city point man for the Downtown Plan, density bonuses – contributions and concessions from developers when the value of additional, city-approved density is large enough to share – "must benefit both the developer and the community to be effective." They include broad "gatekeeper" requirements, like minimal green building standards and pedestrian-friendly streets, but also affordable housing, or a fee in lieu thereof. The fees suggested, applicable to at least 50% of the additional density, were $10 per square foot in highly desirable tracts, $5 in less-developable tracts, and zero dollars for commercial developments such as hotel and office space.

But while few argue that hotels don't provide public benefits in economic impacts both direct (taxes) and indirect (pumping money into the local economy), the question of whether they should be entirely exempt from other fees has long hovered on the edges of density discussions. And with mixed-use, the mantra of infill development – how to capture benefits from hybrids like the Hilton Austin, which holds hotel rooms and condos – must be resolved. Additionally, the $5 and $10 fees are a first; the city set similar fees for the University Neighborhood Overlay district, but at a much lower 50 cents. Personally, Sullivan wants to set it and see. "Rather than haggle over whether they are exactly correct, which we will never know beforehand ... I would like to implement them and see what kind of performance we get."

But the design commission has an ulterior, if non-nefarious, reason for getting density right: resolving the Central Urban Redevelopment, or CURE, conundrum. Downtown developments seeking additional density have options: zoning that hews to optional, "interim" density fees recommended by the Affordable Housing Task Force or more permissive CURE zoning. To date, Robertson noted, the interim density-bonus program has never been used.

This issue was exemplified in the split 4-4 decision at the Planning Commission in November, regarding Austin Hotel Holdings' proposed "eco-luxury" hotel on Fifth Street. The project couldn't earn a recommendation, partially because in seeking CURE zoning and bypassing the interim density fees, AHH skated on hundreds of thousands of dollars in affordable-housing contributions. (Council approved the zoning request in December.) "What's at issue here," says Sullivan, "is replacing the [interim] density bonuses with the consultant-developed density bonuses and removing the option in CURE for more height or floor-to-area ratio. ... We hope that nobody would come through without offering some public benefits. It would take the issue of CURE right off the table." Council acquiesced to Planning's postponement request; the issue will return Jan. 28, as council's action required the Planning Commission to form its working group.

"It's been more like going to a lecture in college, instead of the labs you have where you get to talk about things," Dealey says of previous outreach on the program. But amid the talk about "process" – which can be code for those still sore their individual issues weren't affirmatively resolved – hopefully, the added time will help craft an equitable and intelligent cure for the density dilemma.

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