Density bonus programs under review to address affordability needs, market conditions

The city is moving forward with reforms to several of its density bonus programs, following the recommendations from an analysis completed earlier this year. A recent presentation to City Council’s Housing and Planning Committee outlined several modifications underway or in the planning stages that will better align with the changing economics of development and construction, and the city’s goals for affordable housing production.

Staff emphasized that reforms will proceed incrementally, with each program being reviewed and updated individually rather than as part of a sweeping consolidation. That approach reflects feedback gathered during the analysis phase and reflects the many different goals of the programs that are currently active.

While a more unified structure remains an aspiration, Planning Department division manager Stevie Greathouse said an array of legal complexities and procedural constraints make a case-by-case revision more feasible in the near term.

“We would love to be able to bring back a comprehensive restructuring, but i don’t think that’s in the cards. At this point, staff is recommending that the most straightforward and streamlined way to approach it is going to be as we move through the program’s case by case,” she said. “We will be looking for opportunities to combine and make things a a bit less piecemeal, so you’ll see us coming forward with recommendations for phase two of the equitable TOD overlay that are integrated with a recommendation for citywide density bonuses.”

Updates already in progress include revisions to the University Neighborhood Overlay (UNO), East Riverside Corridor, and Downtown density bonus programs. The UNO revision, which is expected to go before Council in early June, shifts the overlay’s primary focus toward affordable housing and aims to make administrative requirements more consistent with other programs.

Updates to the East Riverside and Downtown bonuses will adjust affordability targets and bonus structures based on the recommendations from the January study. The changes are aimed at addressing concerns about underutilization, especially in the East Riverside program, which the study identified as trying to accomplish too much with limited participation by developers​.

Staff is also integrating broader structural changes, such as the proposed second phase of the Equitable Transit-Oriented Development (ETOD) overlay. This phase may introduce citywide improvements to density bonus mechanisms and explore tiered height-based entitlements. City planners are coordinating this work with other updates, such as potential new zoning districts meant to support mixed-use and missing middle housing types​.

Additional updates are anticipated for the Lamar/Justin Lane Transit-Oriented Development, the North Burnet Gateway area, and the SMART Housing incentives. Updates to the Vertical Mixed Use program may also be considered to better align its affordability requirements with other bonus programs.

One procedural change discussed at the meeting involves moving administrative requirements out of the more rigid zoning chapters of the Land Development Code to simplify future amendments by avoiding the more involved notification and procedural steps required for zoning changes​.

Broader goals for the program modifications include a recalibration process that aligns affordability requirements with construction formats and market conditions to reflect the recommendation for frequent and flexible adjustments. The Planning Department has begun identifying “low-hanging fruit” for possible code amendments but indicated most needed reforms will be embedded in program-specific updates already underway​​.

City officials also responded to committee questions about expanding the reach of programs like the ETOD overlay. While the upcoming Phase Two will focus on areas within a half-mile of MetroRapid bus routes and MetroRail stations, staff acknowledged the importance of eventually incorporating other high-capacity transit corridors to support equitable access to affordable housing citywide.

Council Member Paige Ellis emphasized the need to carefully calibrate density programs in her southwest Austin district, especially for ETOD projects that can address the growing transit needs in the area.

“The Oak Hill area is redeveloping at a very fast pace, and we’ve had a number of different zoning cases come to us where folks are trying to incorporate afford affordable housing into these zoning and restrictive covenant changes over the years, so I really wanna make sure we’re teeing ourselves up for success,” she said. “A lot of these are routes that already connect schools, retail jobs, hospitals, and other things like that that people really need to get back and forth with. I really hope this is where we can kind of counterbalance how much planning is needed in Central and East Austin and try to leverage the existing routes or routes that are in the pipeline with CapMetro to help service more parts of town.”

The next steps will likely include Council action on several program-specific amendments and potential new tools to incentivize affordable homeownership as part of the broader density bonus toolkit. Planning staff reaffirmed their intent to focus density bonus programs on their core mission—supporting housing affordability—while reducing administrative burden and increasing clarity for developers and city staff alike.

Photo made available through a Creative Commons license.

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