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Lower maximum occupancy limits continue to race toward Council

Thursday, January 30, 2014 by Elizabeth Pagano

After several attempts at a compromise on lowering maximum occupancy limits, the Planning Commission ultimately struck upon a solution Tuesday night that earned unanimous support. On an 8-0 vote, the commission recommended a citywide occupancy limit of four unrelated people, placing a two-year limit on the change.


That time would allow for a solution from the Stealth Dorm Working Group to come forward, and the Land Development Code rewrite to (theoretically) be completed.


The potential impact to affordability in the city was at the center of the debate Tuesday night. Those in favor of a lower maximum occupancy limit said the change would help affordability in the central city. Those against the change argued it would make a bad situation worse.


Planning and Development Review’s Jerry Rusthoven told the commission that though they were unable to study the issue in-depth, the Neighborhood Housing and Community Development Department believed the change would have an overall negative impact on housing affordability in the city.


According to a staff affordability impact statement, “The occupancy rate in Austin has been high for the last three years. Capital Market Research reported Austin’s occupancy rate at 96.9 percent and a rental rate at an all-time high of $1.21 (monthly per square foot rate) in their 2013 mid-year summary. There is a clear correlation between demand for rental units and the cost of rents to residents.” The statement warned of decreased options for moderate-low income individuals.


“What we see on the ground is so different,” said Nuria Zaragoza, co-chair of the Central Austin Neighborhood Planning Advisory Committee. “Here it says that because the rent will be split among four people instead of six people, that will reduce the affordability. If that math were true, it seems like the University Neighborhood Overlay would be the most inexpensive place in town.”


Zaragoza was joined by others asking for swift implementation of new occupancy limits. Advocates spoke about affordable housing stock being torn down to make way for “stealth dorms” that drew large rental incomes. Many spoke to the fact that these new structures were driving families out of their neighborhoods and ruining the character of their streets.


Grocery store manager Josh Blaine, who has four roommates, spoke against the restriction, but found common ground with those who support it.


“I pretty much agree with everything that’s been said tonight. I cannot agree more with the fact that something needs to be done about developers coming in, razing old houses, and building something that is valueless,” said Blaine. He asked the city to find other tools to identify stealth dorms, saying, “They aren’t very stealth. I’ve seen them before and can point them out.”


But Blaine joined others in warning the city away from a stricter occupancy limit, saying it could have unintended repercussions. He said that rental housing was at such a premium that a recent attempt to sublet his room was met with offers of more money than he was asking, and over the past year he had seen rents (including his own) continue to rise.


“People are desperate… That’s why you are getting developers coming in who are able to charge $1000 per month, because there is a limit on housing, because the demand is so high,” said Blaine. “Yes, something needs to be done, but not something that is going to make that fundamental problem worse.”


Others who opposed the change spoke to the advantages of living in cooperative housing despite a lack of legal familial bonds. They said that with (legal) families far away it was their preference, and served as a support network.


Under the Planning Commission proposition, if a more permanent, comprehensive solution to the battle against stealth dorms has not been established in two years, the maximum occupancy limit would expire and revert back to the current limit of six.


“I’ll be supporting this as a Band-Aid. I think it’s unfortunate that we are dealing with one tool tonight, and not looking at this as holistically as we should,” said Commissioner Stephen Oliver.


Commissioner Danette Chimenti explained that Council asked for a two-step solution, with occupancy limits intended to “stop the bleeding” while the Stealth Dorm Working Group worked out a more comprehensive recommendation, which is due back to Council at the end of March.


Advocates for the limit, and some commissioners, expressed dismay at the staff recommendation, which would eliminate SF-3 zoning, which includes duplexes, from the change. Rusthoven pointed out that three-bedroom duplexes were not uncommon, and to limit occupancy to two-unrelated people per side would be a “detriment to affordable housing,” and a waste of existing housing infrastructure.


“If we leave duplexes out, we haven’t done anything,” said Chimenti. “We might as well not do anything if we do that.”


Chair Dave Anderson asked that the impact of affordability throughout the city be tracked during the time the code is in place. Commissioner James Nortey was absent.


The commission did not address grandfathering, though City Council is expected to do so when it reviews the code amendment, perhaps as early as Feb. 13.

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