City Council to weigh reviving CodeNext work on density bonus programs


A resolution coming before the council Thursday calls for hikes to the city’s fees for density bonus programs.

Larger-scale changes to the programs were proposed under CodeNext, but most died when CodeNext was killed.

When the Austin City Council voted to kill CodeNext earlier this month, council members put a stop to not only the comprehensive land-use rewrite but also a generally liked part of the project, one designed to encourage affordable housing.

At its regular meeting Thursday, though, the council might resuscitate parts of the proposed changes to the city’s density bonus program, through a resolution that orders an immediate restart to work that already had been underway.

Austin oversees about 10 density bonus programs, including one for developments downtown and one tied to West Campus. Under the programs, the city allows a developer to construct buildings taller or larger than what is generally allowed by zoning rules. In exchange, the developer must commit to building a certain number of low-income housing units as part of the development or to paying into the city’s affordable housing trust fund.

It varies by program, but most of the programs require the developer to construct housing that’s affordable to families earning less than 80 percent of the average Austinite’s annual income.

However, nearly all builders participating in the downtown density bonus program choose to pay the fee in lieu of building affordable housing. Those fees often total in excess of $100,000 for some projects.

According to a 2016 city report, density bonus programs had generated $4,831,364 in fees and 1,653 affordable units. Nearly half of the units were built in the University Neighborhood Overlay program, which encourages building affordable units mainly for students in West Campus. The downtown density program has generated $2,352,960 in fees, but produced zero affordable housing units.

It is those fees that the City Council will take up Thursday, considering a resolution that calls for bonus density fees to be recalibrated. Since 2015, when council members ordered city staffers to raise the downtown density bonus fee, it has been generally accepted in City Hall circles that density bonus fees remain too low.

In the past three years, the city has undertaken efforts to increase the fees as part of CodeNext. Plans also called for creating a new citywide density bonus program that would have quadrupled the amount of land eligible for the various programs.

“All this was going to be wrapped into CodeNext because there were a variety of changes,” said Erica Leak, the city’s policy manager for Neighborhood Housing and Community Development Department. “We wanted to be able to do them all at one time.”

For now, it appears that the citywide density bonus program will remain in the CodeNext coffin as City Manager Spencer Cronk picks up the pieces of the land-use code rewrite. With the collapse of CodeNext, Cronk has been tasked with revising Austin’s land-use rules.

During a work session of the council on Tuesday, though, council members appeared to support changing the existing bonus density fees even as other parts of CodeNext remain shelved.

“We have already lost money,” Council Member Ora Houston said during the meeting, encouraging staff members to come back to the council with new fee structures “as fast as that can be done.”

Beyond adjusting the fees, the proposed resolution asks staffers to study the feasibility of placing the city’s disparate density bonus programs under one umbrella and to possibly create a process to review affordability requirements and fees in lieu of affordable units each year. The resolution calls for recommendations to be delivered to the council by Feb. 15.

Council Member Alison Alter asked for even quicker action, but Leak, the policy manager, said she was concerned that approach might lead to arbitrarily set fees.

“My concern is just getting this done faster and sooner so we are getting the funds through fee in lieu to support affordable housing,” Alter said. “So I would like to get this done before February as an interim step because we know they are too low.”

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