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Commission backs streamlined Downtown Density Bonus Program

Wednesday, June 19, 2013 by Elizabeth Pagano

Despite some reservations, the Planning Commission favored speed over perfection last week, voting unanimously to move forward with a Downtown Density Bonus Program.


The commission voted 8-0 to approve the “streamlined” version of the program, with Chair Dave Anderson absent. The new program will replace the completely unsuccessful interim density bonus program, which developers chose to ignore.


In April of this year, Council put a rush order on the new program, over concerns about how community benefits were calculated when developers were given the right to build denser, taller buildings downtown.


Council approved the Downtown Austin Plan in December 2011, which stipulates the terms of community benefits. But the plan is only a framework, and without its codification, developers have continued to pursue CURE zoning, which avoids the benefits, much to the frustration of affordable housing advocates.


Last month, City Council voted to eliminate CURE zoning when the density bonus program is codified.


City Planning and Development Urban Design division manager Jim Robertson presented the commission with the re-calibration recommendations for the affordable housing fee-in-lieu, as well as on-site affordable housing.


The affordable housing fee-in-lieu will be calculated using “bonus area,” which is the area gained by the change in floor-to-area ratio granted by the city. In the core of downtown, the fee-in-lieu will be $10 per square foot. In the surrounding areas of downtown, staff proposes a fee of $3 per square foot. 


Projects that opt to have on-site affordability to meet requirements would have to have rental units at 80 percent Median Family Income for 40 years, or owned units at 120 percent MFI, with a commitment of affordability for 120 years.


Interestingly, though things came to a head over the rezoning of Hotel Zaza (See In Fact Daily March 8), the new program would apply only to residential projects, not office or hotel projects. Robertson explained it was an acknowledgment that residential properties are the one project type that “consistently produces higher return by getting larger/ taller.”


“I’m glad that we are taking this first step, but I am not satisfied. I do think we have an issue with MFI levels that aren’t deep enough. I’m concerned there isn’t enough provision for on-site housing, and I’m a little bit perturbed that we have no fee for office and hotel,” said Commissioner James Nortey. “But I firmly believe that we can’t make the perfect the enemy of the good.”


“Sometimes it’s worth it, as a policy choice to take a half loaf over a full loaf,” continued Nortey, who said he was more concerned with not moving forward with the program now, and was putting a lot of trust in staff to work towards deeper levels of affordability.


Commissioner Danette Chimenti also had concerns, saying that the $3 per square foot fee was too low. She noted that representatives from the Real Estate Council of Austin and the Downtown Austin Alliance didn’t criticize that fee-in-lieu at all, saving their concerns for the $10 fee-in-lieu exclusively. Chimenti worried that the low fee would serve to further de-incentivize on-site affordable housing, which could be much more expensive.


Chimenti also echoed concerns that hotels and office buildings wouldn’t pay into the affordable housing trust fund.


Projects would also have to fulfill a number of “gatekeeper requirements” including substantial compliance with urban design guidelines, participation in the Great Streets program, and a commitment to achieve (at least) a two-star Austin Energy Green Building rating.


The Planning Commission added a recommendation that fees-in-lieu be directed to permanent supportive housing, and asked that the fees be re-calibrated every three years. They also requested that staff codify the community benefits by the end of 2013.


Currently, the program would have two paths available to developers. Every project participating in the program would be required to fulfill at least half of its bonus area requirements through affordable housing – and could meet the remaining requirements through other benefits (such as public art and open space.) If projects choose to fulfill 100 percent of the bonus area requirements through affordable housing community benefits alone, the rezoning could be approved administratively.


Since 2000, CURE zoning has created more than five million square feet of “bonus space,” according to Robertson. However, as Robertson noted, it is impossible to say how much of that would have been true with different standards (like the new program) in place.


With the Planning Commission recommendation done, City Council will now hear a briefing on the program this week, and they are scheduled to vote on the new program on June 27.

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