- Editorial Board
CodeNext, which is undergoing its third revision since being rolled out in January 2017, remains controversial, confusing and complex. Given that it aims to overhaul Austin’s cumbersome land-use and zoning regulations, some of that was to be expected. But much of the confusion is self-inflicted.
The city marketed CodeNext as a strategic tool in meeting Austin’s ever-increasing demand for housing — particularly, affordable housing. Yet, city officials have not specified how that would be accomplished, even as the Austin City Council rushes to finish the job ahead of 2018 elections in which the mayor and five members are on the ballot.
The rush to pass something should be tempered by the magnitude of the challenge. The zoning-code revision is perhaps the single-most important task council members will tackle during their tenure, influencing what gets built and where, the affordability of homes and neighborhoods, and the city’s economic, social and racial diversity for decades
So much of the details are bogged down in arguments that pit density against neighborhood preservation, urbanists against new urbanists and low-income housing for working people against so-called “missing middle” housing for higher-income people.
We raised some of those issues with council members. Today’s excerpts — from Council Members Greg Casar (District 4), Jimmy Flannigan (District 6), Leslie Pool (District 7), and Alison Alter (District 10) — are the first in a three-part series.
How specifically would CodeNext generate more housing — in a meaningful way — for families who earn 80 percent or below the city’s median family income?
Casar: Under the current code, some new units are being built that are accessible to lower-income people through an affordable housing bonus program. Through CodeNext, the city’s experts project that we can increase the number of rent-restricted units created through the program by over 200 percent, and that we can ensure that those units are also available to lower-income people using Section 8 vouchers. This is an improvement to the status quo, but these improvements do not go far enough to address unaffordability and economic segregation.
Flannigan: One way to help families avoid displacement is to enable them to meet the needs of generations coming into home-buying age and maximize the use of their existing homes and property. One of the most detrimental effects of displacement is the loss of generational wealth. By allowing families to add additional units on their properties or to streamline the ability to renovate and expand their homes, families can stay and continue to build the communities they helped establish.
Pool: In Austin, we’re facing the dual problems of rising costs pricing families out of their existing homes while the market is failing to produce enough affordable housing where these families can live.
As for rising prices, I’d like to see us focus on stabilizing our communities through preserving existing affordable homes of all types and sizes. I do not believe the CodeNext proposal, as it stands right now, adequately addresses the issue of displacement.
The current CodeNext draft includes a Density Bonus Program that provides developers with greater entitlements in return for affordable units.
However, I would like to see improvements to the program. For instance, some regulations are proposed to be relaxed through CodeNext, such as parking requirements and compatibility standards. I believe we should leverage these relaxations to gain more community benefits like affordable housing. I am also concerned that the new housing we are creating does not serve families, and I will be pushing for changes that support family-friendly affordable housing.
Alter: I believe CodeNext would have a limited impact on reducing displacement and gentrification, and our consultants have said as much. For me the devil is in the details — and particularly in the assumptions we make about how the market will respond to the new code.
A few simple examples illustrate this. First, a simplified theory of supply and demand overlooks the fact that developers currently have far more (zoning) entitlements than they are using. Second, if we increase entitlements, we increase the value of the land, and some people will be priced out of their existing neighborhoods. Third, if we increase entitlements where our existing affordable housing stock lies, we accelerate displacement.
How do you define “affordable housing” in terms of median family income?
Casar: Housing is either affordable or unaffordable depending on your income. As a general rule, households should spend less than 45 percent of their income on rent, utilities and transportation. That means we should encourage production of housing for everyone: from the middle-class to the working-poor. We should change outdated city rules that incentivize luxury housing instead of housing accessible to those at 60 percent to 120 percent of the median family income.
And we need to commit ourselves to the increased public investment necessary to bring rents downward for those at 20 percent, 30 percent, and 50 percent of the median family income. That’s why I sponsored the city’s effort to generate affordable housing revenue through a new fee on commercial development, and that’s why I’m advocating for a major housing bond in 2018.
Flannigan: Affordable housing comes in a number of categories:
• Permanent supportive housing – usually owned and managed by an entity like a nonprofit or the city to stabilize the most vulnerable members of the community at the lowest end of the income scale.
• Subsidized housing – typically established with an initial public investment and owned or managed by nonprofits to help working families experiencing financial, physical or societal transition.
• Income restricted – established via density bonus or other land use agreements with the city that restricts the level of income allowed for both rental and ownership units involving involves no public dollars
• Low-cost market rate – built with no public dollars or agreements but still affordable to middle-income families because of streamlined development requirements process.
Pool: The U.S. Department of Housing and Urban Development defines affordable housing as that in which the occupants pay no more than 30 percent of their income for gross housing costs, including utilities.
This year, City Council adopted a Strategic Housing Blueprint that establishes a spectrum of housing unit goals at different median family income (MFI) levels, including units below 30 percent MFI and up to 60 percent and 80 percent MFI.
Alter: I am glad you are pointing out this confusion. We have multiple populations struggling to find housing they can afford, and the potential tools and solutions vary by income level. Our conversations about affordable housing must include those at 30 percent MFI or lower.
The city of Austin’s 2014 Comprehensive Housing Market Analysis identified a shortage of 48,000 units for families making less than $25,000. We must admit that the market on its own is not going to provide viable options for these families, and CodeNext alone won’t either.
Developers and others long have complained that the current land-use and zoning code is so burdensome and restrictive that it drives up the cost of construction — and in turn, increases the cost of housing in the city. How will CodeNext fix that problem?
Casar: One of the aims of CodeNext is to simplify the development process and to make it more user-friendly. The text has been restructured, and it includes clearer diagrams and charts, so that you don’t have to hire an expensive expert to guide you through the city’s rules when building your home.
Flannigan: Homeowners, community leaders, affordable housing advocates and developers alike know that the code we have today is overly complicated and often requires lengthy zoning and permit changes or torturous building requirements driving up the complexity and cost.
It is essential for us to simplify and streamline the zoning and development rules to offer clear and understandable policies for everyone. Doing this right in CodeNext means we can help maintain affordability for existing homeowners, enable a vibrant rental market, and allow seniors to age in place, or at least stay in their neighborhoods.
Pool: We have lo ng heard that the city’s permitting and inspections processes have a lot of room for improvement. If the CodeNext process can succeed in reorganizing our land-development code in a way that is more user-friendly, that could help make permitting and inspections a bit easier.
In general, however, I think that big improvements to these processes will mainly come from reimagining them to reduce inefficiency and improve service, and looking to peer cities for effective permitting and inspections strategies.
Alter: I do not believe that Draft 2 addresses these concerns, so at this point the jury is out. In Draft 3, I know staff are working hard to make the code predictable, easy to understand, and well-organized while maintaining essential environmental protections, compatibility measures and affordability programs.
Aside from density bonuses, what incentives would CodeNext offer to developers to build affordable housing for lower-income residents?
Casar: I am further exploring affordable housing tax abatements, expedited site plans, new Tax Increment Finance zones, and a revamped SMART housing-fee waiver program to incentivize the housing that Austin most desperately needs — deeply affordable units in high opportunity areas.
Flannigan: One important change is to equalize how incentives are offered across the city. The current code only incentivizes developers in certain areas while overlooking the potential to create affordable market-rate and income-restricted housing in all parts of town.
Ultimately, the main barriers for developers committed to building affordable units are the complicated code and process.
Pool: The CodeNext proposals offer density bonuses – such as allowing additional height, units, or floor-to-area ratio entitlements – in exchange for affordable housing.
Incentives are one of the few tools the city has to provide affordable housing. By reducing parking requirements across the city without asking for community benefits in return, I believe we are not maximizing our ability to obtain affordable housing.
Alter: We should require developers to include affordable housing in order to obtain waivers on things like parking, compatibility, height, or unit caps.
In several instances, the current draft relaxes many of those requirements “by-right” without securing any affordable housing. The limited options provided us by state law to incentivize affordable housing mean that we should be extremely cautious in relaxing requirements “by-right” without requiring a community benefit in exchange.
Specifically, how would CodeNext help Austin’s traffic congestion crisis?
Casar: Our current land development code incentivizes sprawl, which exacerbates traffic problems by increasing the number of cars on the roads and forcing people into driving longer distances. If more housing is getting built, we need that housing closer to jobs and services. That way, people can more conveniently walk, bike or ride the bus.
A good rewrite of our land-development code should put us on the path toward being stuck in traffic less, not driving more.
Flannigan: We live with this problem every day in District 6. Sprawl developments built in surrounding communities like Cedar Park and Round Rock become a family’s only option after being priced out of our city’s market. Seeing increasing traffic on U.S. 183 (despite U.S. 183 being expanded and lengthened) and on surrounding city roads shows the traffic impact of spread-out development.
This added influx of traffic is increasingly populated by citizens who do not contribute to city of Austin taxes, representing a loss of tax revenue that could otherwise fund projects to mitigate the very same traffic congestion these cars create.
Pool: The CodeNext draft proposes new mixed-use zones that could support greater transit use on our corridors and new rules that could improve the city’s ability to require transportation improvements, strategies and connectivity on developments.
However, I also believe that there are key areas that need to be improved. Some parts of our city have very different transportation needs than other parts and we should apply zoning and parking requirements that reflect those different needs.
Alter: Right now, Austin has a very high concentration of jobs downtown, and recently has switched to emphasize transit along our corridors. If Draft 3 of CodeNext were to support Imagine Austin’s vision of growth along the corridors and the creation of new job centers, we could do a lot to address traffic congestion.
In contrast, if we grant entitlements based on greatest potential profits then we risk making our congestion worse.
Do you favor putting CodeNext on the ballot?
Casar: Currently, I am concentrating on crafting the best land-development code for the city of Austin. I am not in favor of putting something on the ballot that remains unfinished, particularly if the final product is a carefully negotiated policy that the majority of Council believes to be a good code.
Flannigan: In 2012, the community very clearly mandated that decisions should be made via council members elected by districts. The shift has afforded the ability to represent a broader set of community values and communities that lack equal ballot access. Policy-making by referendum is a recipe to silence disenfranchised communities and parts of town like District 6 with complicated multicounty voting.
Pool: I believe that Austin residents will decide the matter either by signing or not signing the petition, and the council’s subsequent action will be guided by the outcome of that petition drive.
Alter: I know that the petition organizers hope the ballot measure will ensure the council is responsive to the community, and broadly I am glad that more and more Austinites are learning about this issue and becoming involved. Whether CodeNext is on the ballot will depend on the will of the voters.
The council is set to vote on approving CodeNext sometime in April. Does the timeline need to be extended, given that many residents say they have not had enough time to study new drafts or fully understand the impact of new zoning on their neighborhoods?
Casar: This process began five years ago and is already behind schedule. We should aim to pass CodeNext in a timely fashion, but more importantly, we should pass CodeNext when we have a good product that is ready to be passed.
Flannigan: Did not respond to this question.
Pool: Yes. I have been very vocal about my concern that the April deadline was undermining our ability to get this right. I pushed for more “breathing room” that would help our residents catch up and help our city staff finish the draft proposals and incorporate feedback from our community and our commissions.
I believe that we should take the time we need to make this successful.
Alter: Prior to the release of Draft 3 and receipt of our land use commissions’ comments on it, I think it is premature to say whether we need more time. I believe the details matter, and that we should take whatever time is needed to get them right.
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