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Plans for city’s East Austin parcel show possibilities under affordability programs

Friday, August 2, 2019 by Chad Swiatecki

A pair of development proposals created as an exercise for the Urban Land Institute, a nonprofit research and education organization, shows what’s possible as the city looks to use its idle properties and a mix of new development and financing tools to expand affordable housing.

In one, a community kitchen and food production incubator serve as a main attraction for a mixed-use project aimed at first-time homebuyers and East Austin families in transition. In the other, nearly 400 housing units sprout up around a medical clinic, restaurants and a co-working space.

Neither plan is under formal consideration by the city, but are part of the annual Battle of the Plans from the Urban Land Institute of Austin. Their use of waivers under the new Affordability Unlocked framework, along with the use of money from last fall’s $250 million affordable housing bond vote, provide some real-world study in what partnerships between the city and housing developers could look like.

The competition between teams made up of ULI members was focused on a 6-acre, vacant piece of city-owned land in East Austin near U.S. Highway 183 and Gardner Road. The city’s main goal for the proposals was to see how professional planners can create viable projects under an assortment of new policies aimed at adding affordable housing in the urban core.

A combination of increasing land prices and surging demand, along with local planning policies that cater to single-family homes instead of denser housing uses, have made it increasingly difficult for developers and some nonprofit groups to build housing projects in the urban core at affordable rates. Affordable housing is typically defined as units accessible to those earning 80 percent or less of an area’s median income, with housing costs taking up more than 30 percent of the inhabitants’ total monthly income.

This is the second time the Urban Land Institute has focused on a municipally owned site, with last year’s competition using a rock quarry property in Cedar Park.

“The site is interesting because it’s a part of Austin that hasn’t gotten a lot of investment historically, but the improvements along 183 are going to change that a little bit and it will become a more accessible part of town,” said Lance Coplin, one of the organizers of the competition. “It’s also close to the Colorado River and we felt like that neighborhood is going to see some changes. It worked out that the city had a fairly clean site for these teams to come up with solutions.”

Teams spent two weeks investigating the parking and setback waivers and other considerations under Affordability Unlocked, which was created to add density to areas that have traditionally been zoned for single-family housing. The bond funding and other financial tools that were part of the 2018 SMART Housing plan, along with other affordability programs, were also incorporated to give developers more fiscal flexibility.

Steven Minor, a project manager for Gray Engineering and a contributor to the proposal called Gardner Unlocked, said the incentives make affordable projects more feasible for the development community, which is still taking a cautious stance toward the city’s emphasis on lowering housing costs.

“They’ve offered incentives and taken steps forward, and the temperament I’m hearing from private developers who have to make money and are not in the business of making affordable housing … I’ve not heard developers electing to do small units and making them available to families at affordable levels, or address that issue to the level we were trying to in our presentation,” he said. “Affordability comes up all the time, but I’m not sure everyone is on the same page as far as how to make it happen.”

While the rising price of land in the city contributes to the rising cost of housing, competition participant Nicole Mwei, a project manager for affordable housing developer DMA Companies, said the city’s lengthy planning and permitting process also adds time and expense to building projects. Those costs have to be recouped with higher rents and sale prices.

Mwei’s team’s proposal included lower housing density and building heights to preserve the suburban feel of the area and used 3D printing technology to create affordable condo units aimed at first-time homebuyers. She said the ongoing uncertainty over how the city handles rezoning, utility work and other approvals is an area of needed improvement that would help all developers lower their costs and make housing more affordable.

“I have no idea how the city would react to 3D printing on this because the rezoning process and entitlements always takes a long time, so that would be one of the holdups, and then it always changes based on what month you’re going in,” she said. “Right now, one of the biggest holdups seems to be Austin Energy, so getting energy and utilities out to the site is usually a big determining factor of how things are going to get held up.”

Photo of the winning team, Gardner Unlocked, courtesy of Urban Land Institute. Pictured from left to right: Julio Carrillo, Atkins; Justin Brodnax, Hoar Construction; Brittany Stanford, Fasken Oil & Ranch; Mackenzie Herron, S. Watts Group; Joshua Hogan, Hogan Architects & Development; Steven Minor, Gray Engineering; Spencer Roy, HFF; Jewels Cain, Armbrust & Brown; (coach) Bryce Bash, Hawkeye Partners.

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