SMART housing to see changes in “phase two” of City Council-initiated review

A city incentive program intended to produce “Safe, Mixed-use, Accessible, Reasonably-priced and Transit-oriented” housing may be getting a little smarter with changes working their way towards City Council.

The housing department is proposing four amendments to improve the “operation and functionality” of the program, per a presentation on the amendments given to the Planning Commission during a special called meeting on April 29.

The SMART program was introduced in 2000 by a city that even then was wrestling with significant growth and attendant housing supply issues. The Austin Monitor has reported on the city’s efforts at getting for-profit developers to actually use the program, which go back about as far as the debut of the program itself.

The latest round of review was kicked off in 2023 by a Council resolution directing the city manager to find ways to improve the program. The new amendments represent the second “phase” of that process, according to Housing’s Brendan Kennedy, who gave the presentation to the planning commission.

“This is one of our city’s oldest affordable housing incentive programs, and there are a lot of areas where stakeholders and staff feel that we could take a deeper look at the program, really look at how it works and potential changes,” Kennedy said.

While mostly narrow and technical in scope, the amendments make a few key changes to the program, mainly related to the affordability component and how the program interacts with other incentive programs.

The current iteration of the program, for example, sets an affordability standard of 80 percent of Median Family Income or MFI, which means that an “affordable” unit would have to be affordable for a family of four making that amount annually. As of 2024, the latest year which the city has released numbers for, that would be around a hundred thousand dollars. One of the new amendments, however, would raise that standard to 60 percent MFI.

Kennedy noted during his presentation that this is less a dramatic shift in policy and more of a consistency measure. Most existing SMART developments also take advantage of other incentive programs with the higher standard, he said, and 60 percent is the current policy goal for affordable projects across the city.

Other proposed changes include the removal of a requirement for Transportation and Public Works to be separately notified of any SMART developments, the removal of a 100 percent fee waiver provision for developments under the Vertical Mixed-Use (VMU) program, and a stricter requirement for affordability requirements to be guaranteed under a binding covenant with the city before participation in the program can be certified.

Kennedy said the city isn’t necessarily done working on the program, but will need more time and resources, and need to do more outreach and research, for a “phase three” offering more substantial changes down the line.

In the meantime, the current phase will go to City Council with a unanimous recommendation from the Planning Commission. Chair Awais Azhar tacked on a few amendments dealing with the horizon of the affordability requirements and further streamlining with other city rules and programs, but clarified that they were aimed squarely at the future and not at the current phase.

“These are guidance we’re sending to Council, they’re not to the ordinance itself,” Azhar said. “It makes sense to have them looped into phase three, or whatever Council or staff’s will might be.”

Photo by L Maule, CC BY-SA 4.0, via Wikimedia Commons.

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