Homeowners Kill Prior City Council’s Modest Housing Reforms

AMLI 5350 on Burnet Road is a VMU building, meaning in exchange for affordable units the city allowed it to be built taller. The new ruling will block expansion of the VMU program. (Image by John Anderson / Maggie Q. Thompson)

In 2020, a group of homeowners successfully sued the city to block changes to housing development rules that were designed to increase affordability. The same group has now scored another legal victory, with a familiar argument: The city failed to notify property owners when nearby properties were rezoned in 2022.

The newer suit took aim at several changes to the Land Development Code made by former Mayor Steve Adler's Council. In an email to plaintiffs sent Nov. 8, staff for District Judge Jessica Mangrum told them that Mangrum would grant most of their requests. The challenged ordinances include vertical mixed-use 2 (VMU2), a bonus program that allows developers to build taller buildings in exchange for creating affordable units; an ordinance that would allow residential development in areas zoned commercial; and a code change that relaxed the city's compatibility rules, which restrict the size of multifamily buildings within a few hundred feet of single-family homes.

Mangrum did not grant the plaintiffs' request to also strike down Affordability Unlocked, a density bonus program designed to incentivize the production of deeply affordable housing, especially for people exiting homelessness.

Though the court's ruling will be a disappointment to housing advocates and current City Council members, who have swung the dais in a direction decidedly more supportive of increasing the housing supply, the ruling may not have a tangible effect on housing development in Austin. Staff is already working on new changes to the city's compatibility restrictions that will go much further than the modest reform Council approved last December. They're also working on more sweeping changes to the Land Development Code (the HOME amendments) and employing a supercharged notification process to protect new reforms from legal challenges.

Attorneys Fred Lewis and Doug Becker, behind the two successful lawsuits, are already accusing the city of violating the law again in relation to the latest development code changes. Lewis and Becker say 4,000 Austinites have filed protests against new code changes on fileyourprotest.com, but that the city is refusing them, adding that "state law recognizes the electronic age even if City Luddites do not."

Counsel for the plaintiffs and the city are working on the final wording for Mangrum's order, which they say should come out Friday. Becker says he will ask the city to pay attorney's fees and possible sanctions, and to rescind the ordinances. A city spokesperson told us they're seeking clarity about any process changes that the ruling will require in the future.