City planning revision of density bonus programs

Members of the city’s Housing and Planning Department say they will be hiring a consultant with expertise in creating and using incentives known as density bonuses to help them untangle the city’s myriad, often competing, development programs. Most of those programs aim to increase affordable housing in the city but have had mixed results. The consultant’s job will be to help refine and eliminate redundant processes found in the department’s various programs, according to Rachel Tepper, principal planner with the Housing and Planning Department.

Tepper explained to the City Council Housing and Planning Committee on Tuesday that the city currently has 13 different density bonus programs. Each of these is designed to provide greater community benefits, such as affordable housing, in return for additional height or density. However, each program is different and applies to different parts of the city, so it is difficult to get an overall picture of those programs.

As Tepper explained, in 2017 the city adopted a Strategic Housing Blueprint to address its affordable housing crisis. The estimated cost for an additional 60,000 affordable units by 2027 was pegged at $11 billion.

While cities in Texas can provide incentives for builders, such as increased density and fee waivers, they are not allowed to use tools like rent control.

In 2007, the city established its oldest program aimed at providing an incentive for more affordable units, called SMART Housing. In this program, the city exchanges permit fee waivers for dedicated affordable housing units. This program has no specific mixed-use policies. Tepper indicated that the city could institute some administrative improvements such as how the SMART Housing units are tracked and reported.

SMART Housing units often overlap with other density bonus programs, Tepper said, so it’s hard to identify within the affordable housing inventory which units belong to which programs, so sometimes they’re double counted.

Another program that has received considerable attention is called Affordability Unlocked, considered to be one of the city’s most successful. According to Tepper, there are 5,343 units planned under this program, but only 481 completed. There are also 1,535 vertical mixed-use units planned and only 755 completed. Another 156 are pending approval.

Credit: City of Austin

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One program that increases housing only around the University of Texas area is the University Neighborhood Overlay, called UNO. It has also performed well. Tepper’s chart showed that there have been 572 new units with 911 bedrooms. Another 382 units are in the planning stage.

The Downtown and Rainey Street program shows 111 units planned and 81 units completed so far. The city has received about $6.5 million of fee-in-lieu payments and anticipates receiving an additional $23.8 million, according to Tepper’s numbers.

Tepper showed the committee details of complications with the current density bonus programs, including separate and redundant application processes leading to confusion on the part of applicants; inconsistency in the approval process for fee-in-lieu; inconsistency in requirements for community benefits and developer incentives; and lack of a tracking system.

Her chart showed the great complexity of the 13 different programs and made it easy to understand why the department needs to hire a consultant to try to minimize that complexity. That person is expected to begin work around Jan. 1.

Photo made available through a Creative Commons license.

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