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Council OKs lower occupancy limits for new housing

Friday, March 21, 2014 by Michael Kanin

Austin City Council members Thursday approved a downward adjustment in occupancy limits citywide, a move that drops the maximum number of unrelated adults that can live at a given address from six to four. The vote was 6-1 with Council Member Bill Spelman casting the lone ‘no’ vote.


Existing houses and duplexes will not be subject to the new rules and the ordinance will expire in two years so a new Council can consider its consequences.


Though the change doesn’t quite apply citywide, it is valid throughout the regions of the city targeted by the Austin McMansion ordinance, a large portion of the municipality. Indeed, Spelman told his colleagues that the area was too large.


“I think (this) is overbroad. I think (this) is a very, very good solution to a very specific problem which is being felt very severely in a couple of neighborhoods,” he said.


Spelman attempted to reduce the affected area for the new rules to just a handful of Zip Codes. Only Mayor Lee Leffingwell appeared interested.


Council Member Mike Martinez, who sponsored the item, explained his reluctance to accept Spelman’s change. “As we start narrowing the boundaries, then I promise you that we will see some stealth dorms in the Govalle/Johnson Terrace Neighborhood,” he said.


Thursday’s vote represents finality for an issue that has been a cause for concern for some time. Originally brought forward as part of an attempt to limit the construction of so-called ‘stealth dorms’ — properties constructed, say opponents, to hold as many unrelated adults as the market would bear — the item was initially approved on first reading back in February.


As part of that move, Council members commissioned a study of potential impacts that might result from the citywide reduction in occupancy limits. There was concern from some that the change would force renters into an already undersupplied market, and subsequently add to rising rental rates across the city.


The report, prepared by Civic Analytic’s Brian Kelsey, provided Council members with some startling information. That includes the fact that in at least one neighborhood surveyed by Kelsey –the 78751 zip code, which runs between Guadalupe and I-35 north of 38th Street– leasing costs have risen by 75 percent since 2009.


However, as for the question at hand — whether a decrease in occupancy limits will cause further rental cost increases — the Civic Analytics report was ultimately inconclusive. “This preliminary-stage analysis suggests that there is some connection between the number of single-family zoned high-occupancy properties and lower income areas experiencing rising rental rates,” Kelsey wrote. “But without more time for additional analysis…it is difficult to say anything with certainty about how that relationship is impacting housing affordability in Austin.”


Kelsey had just three weeks to work on his report. Council had briefly entertained a longer break for the study. A majority of members voted for the shorter period.


Council action also comes just 11 days before the city’s Stealth Dorm Working Group is set to deliver a set of its own recommendations on the matter. Many Council members cited both the coming rewrite of the city’s Land Development Code and the two-year expiration attached to the new occupancy rules as checks on action that may have been taken without complete information.


However, for his part, Council Member Chris Riley suggested that the limits be decoupled from the code rewrite. “I really think there is some real urgency to addressing the underlying problem here”–something he put as a lack of housing diversity.


Riley told his colleagues that he would take a step in that direction with an item on next week’s Council agenda.

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