PUD changes planned

Proposed changes to the city’s Planned Unit Development ordinance that are intended to increase on-site affordable housing are moving forward with the full support of City Council.

Council members voted 7-0 to approve a resolution whose objective is to close the “fee-in-lieu” option for affordable housing at PUDs.

The changes were brought forward by Council Member Laura Morrison, who recently noticed that the current version of the PUD ordinance has been unsuccessful at establishing on-site affordable units for approved developments. Rather, developers have opted to exercise the fee-in-lieu option, which allows them to contribute to the city’s Housing Trust Fund instead.

The sole exception is the South Shore PUD, since the PUD ordinance was established in 2000. Those units had been approved under more stringent terms that calculated affordability requirements based on total square footage. The current practice, which was established last year, calculates the requirements by using only the “bonus” square footage, or the area that is gained through the change to PUD zoning.

The resolution passed with changes from Council Member Bill Spelman, who wanted to provide more flexibility for those drafting the ordinance.

“I think it would be a good idea for at least some affordable housing to be provided on-site for PUDs,” said Spelman. “Whether or not it needs to be all of it, or it should be some of it, or it should be all of it and an escape valve, I think these are questions that should be worked out by our staff, at least on a provisional basis, to give us some options.”

To that end, Spelman suggested three options for staff to consider. The first would remove the fee-in-lieu option entirely. The second would require a portion of the affordable housing requirement be on-site. And the third would require on-site affordable housing with an “escape valve” that would allow developers to pay a fee-in-lieu if there were “exigent circumstances that made it necessary to provide some or all of it off-site.”

Council Member Kathie Tovo said that she objected to the second option, which she felt was unnecessary. Tovo reasoned that the escape clause would provide adequate flexibility. She worried that having all three options would get the city “almost where we are right now.” She encouraged staff to craft language that would ensure that exceptions to the on-site requirement would be for “pretty unusual circumstances.”

Spelman said that, for now, he was uncomfortable with the idea of asking staff to do something very specific, without having had the time to get into the details. He said that keeping some flexibility in the resolution would allow both staff and the Planning Commission to familiarize themselves with those details. He agreed to change the second option so that it would require a “significant portion” of on-site affordable housing, instead of just a portion.

Council Member Chris Riley suggested language more in line with the city’s University Overlay District, which requires affordable housing on-site but allows a portion to be off-site. That suggestion was integrated into the resolution. Riley pointed out that UNO requirements have created almost 500 on-site affordable units and brought in about $2 million in fee-in-lieu payments through tiered affordability requirements.

“I just think that’s a helpful context, and UNO could provide a helpful model for this,” said Riley.

Zilker resident David King supported the push for on-site affordable housing for PUDs and increased geographic distribution of affordable housing. King said the issue of PUDs has been a big one on the Council campaign trail.

“The PUD ordinance is being criticized, and the new 10-1 Council, they are either going to repeal it, or they are going to gut it. Which is what should be done to that ordinance,” said King.