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Council considers details of lowering housing occupancy cap

Wednesday, February 12, 2014 by Michael Kanin

Austin City Council members Tuesday continued to explore a potential change in development rules that lowers the city’s occupancy cap from six to four unrelated persons. Though the measure, brought by Council Member Mike Martinez, is aimed squarely at what some call stealth dorms, wider concerns grabbed council attention.


These include questions over how the new rules might impact same-sex couples, how the city might avoid conflict with federal law that protects such facilities as group homes for the disabled, and what impact the measure might have on citywide affordability. Though Austin Planning and Development Review staff noted that the former two issues would be addressed with some level of clarity, debate lingered over how the new rules would affect affordability.


According to an affordability statement produced by the city’s Neighborhood Housing and Community Development office, the rules changes could have a negative impact on affordable housing in the city. In addition to diminishing the “affordability of homes shared by multiple individuals for the purpose of reducing living expenses,” the document goes on to suggest that “(t)he reduced occupancy limit will most likely increase the demand for both market rate and affordable housing in the city.


Later, the study further concludes “an increase in demand and occupancy rate will most likely result in an increase in rental prices across that city.”


Council Member Chris Riley wondered if a concern from occupancy limit proponents that stealth dorm construction decreased affordable housing stock wasn’t also relevant. “They feel that they are losing a healthy stock of affordable housing through the continued demolitions of existing modest structures and their replacement with structures that are actually more expensive,” he said.


Though this angle was not covered by the scope of their study, city staff affirmed Riley’s suggestion.


If approved, Martinez’ item would reduce allowable unrelated single-family dwelling occupancy limits to four from six, in most cases. Duplexes would drop from three unrelated adults per side to two, and secondary apartment occupancy would go from four adults to two.


A Planning Commission version of the ordinance – a document that Council Member Laura Morrison termed “not quite cooked” – left room for a sunset provision that would allow the ordinance to operate for two years. Such a provision would, theoretically, allow for more work from that body on the matter, as well as the efforts of those currently working to complete a wholesale rewrite of the city’s notoriously dense Land Development Code.


Meanwhile, the question related to which grandfathering provision gets attached to Martinez’ ordinance remains an issue. According to city staff, a handful of options have been discussed. One would simply allow all existing structures to maintain the current occupancy limits unless owners add more than 69 square feet of space or cancel water or electric meter service to a building. That option is staff’s recommendation.


Another option – one preferred by proponents of lowering the cap – would offer little in the way of direct grandfathering. Instead, landlords would have to submit affidavits stipulating that they play host to more residents than would be permitted by the new limits. As each of those residents move out, landlords would then have to file a new affidavit as the levels decrease to what would be allowed by ordinance.


Still, questions linger about how city officials would enforce the rules. In addition, according to NHCD Director Betsy Spencer, the grandfathering approach adopted by Council would have an effect on affordability. “If folks have the ability to grandfather properties that would not decrease (stock),” she said. “We see grandfathering as a positive policy because things that are in place right now would remain.”


Mayor Pro Tem Sheryl Cole suggested that perhaps the occupancy limit rules could be targeted to specific neighborhoods. “I think that we haven’t discussed enough of the differences in particular markets throughout the city, and we’re considering an ordinance citywide that has a particular impact on the portion of town that is housing university students,” she said. “When you look at that area of town you are seeing demolition and a rise in price, and so that is hurting affordability. But when you look at it citywide, and you reduce the occupancy levels than that would reduce affordability.”


Cole further suggested that the issue would not be “fully reconciled by grandfathering.”


That prompted Council Member Bill Spelman to wonder about assigning regulation more locally. “I took a look at the Northfield Neighborhood Association’s policy statement on…stealth dorms,” he began. “What their ask was not that there be a citywide policy but that individual neighborhoods, individual contact teams have the authority to be able to adopt a policy of moving the single limit of six to four at their own discretion.”


Riley suggested that such an enterprise might be overly complex. Mayor Lee Leffingwell was flatly against it. “I think it’s one thing to establish boundaries, it’s quite another thing to give legislative authority to a neighborhood contact team,” he said. “First of all, I question the legality of it and I (also) question the prudence of it.”


Council Member Kathie Tovo pointed to a Planning Commission call for the ordinance to apply citywide, and called for more information about why that body took that action. She and her colleagues are slated to hold a public hearing and vote on the matter Thursday.

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