Density? Bonus! (Programs.)

As the September release of CodeNEXT version 2.0 draws near, city commissioners (and residents) continue sorting out how the land use code rewrite might address the city’s affordability issues. On Thursday, the Planning Commission held a special-called meeting to receive a briefing on a newly proposed density bonus program.

CodeNEXT consultant John Miki and the city's Neighborhood Housing and Community Development manager Erica Leak were responsible for Thursday's presentation on the developer affordability incentives, released last month with the goal of providing additional density in exchange for community benefits. The new program will cover 14,300 acres in addition to the current 6,200 – land covered under six existing plans, like the Downtown Density Bonus. Leak stressed that these incentives represent just one hammer in a toolbox (that includes federal grants and nonprofit developers) that must be fully utilized to successfully address Austin’s housing shortage for low-income residents.

Under this proposal, developers can choose to accept a density bonus in order to build beyond zoning limitations. Take, for example, medium density residential zones, where 12 dwelling units per acre is the maximum number of units allowed. Through a bonus, developers could build up to 30 units per acre, so long as 5-10% of those bonus units are affordable (60% median family income for rentals, 80% for owners). Leak and Miki both noted that the goal remains keeping the affordable units on-site, but developers can request city approval for three alternative options: 1) to provide an equal or greater number of affordable units within a mile of the subject development; 2) pay a fee-in-lieu to the affordable housing trust; or 3) dedicate land suitable for an affordable housing development. (Commercial developers will pay a fee-in-lieu.) Leak said there are “pros and cons” to all options.

The off-site options gave several commissioners cause for concern. For some, it was hard to not associate “off-site” with “segregation.” Commissioner Trinity White said she was concerned about where those units would be built. She asked about “the checks and balances” of those options. Leak admitted the criteria hasn’t been created yet, but in theory a board would evaluate the claims and site preferences. Miki added, “These options are for when [on-site] doesn’t work for some reason, or maybe the money you spend can go further on an off-site unit.”

Another concern was the 60% MFI (roughly $34,000 per one-person studio, or $48,900 for four-person/three bedroom). According to Miki, dropping from 60% to 30% MFI becomes “much more expensive to subsidize.” This could mean fewer affordable units and/or less adoption by developers. Still, commissioners, including Chair Stephen Oliver, emphasized the need to identify more strategies to serve those at 30% MFI.

The Thursday discussion echoed one held the night before at the Community Development Commission's meeting in East Austin, where residents and commissioners alike worried that they and their neighbors ultimately will be pushed out of Austin as new development and high-end condos continue to drive up property taxes – even with the proposed bonuses in place. Commissioners at both meetings expressed unease that bonuses didn’t cover enough zones – there are currently no bonus areas identified in T3 neighborhoods due to zone limitations on building size – and were not spread equitably throughout the city.

Leak, Miki, and CodeNEXT executive project lead Greg Guernsey promised to continue these discussions between now and the final draft. The Planning Commission will hold their joint monthly meeting with the Zoning and Platting Commission Tuesday night, but only CodeNEXT staff will speak. The consultants will return for the meeting scheduled for Aug. 8. Miki and Guernsey will also provide commissioners with additional insight into version 2.0 prior to the fall release so they “know what to expect,” said Miki – likely to keep CodeNEXT on track for its April 2018 adoption by City Council.