A push for more affordable housing falls flat at Planning Commission

A new tower planned for downtown sparked debate about Austin’s density bonus program at the most recent meeting of the city’s Planning Commission.

The density bonus program essentially trades increased development entitlements for a number of community benefits, including things like affordable housing, public space or green building. In this case, would-be developers of 506 West Ave. are seeking changes that would allow a 564-foot-tall building. In return, they propose paying about $1.8 million to the Affordable Housing Trust Fund and about $1.8 million to the Shoal Creek Conservancy for nearby infrastructure improvements.

“Why are we even entertaining this?” Commissioner Grayson Cox asked. “All of this money should be going to our Affordable Housing Trust Fund. … It just doesn’t make sense to me. We should be prioritizing affordable housing and, if we don’t, then we’re being completely hypocritical in much of what we say on the Planning Commission.”

The way the program is set up, at least half of the bonus must be achieved by providing affordable housing – but after that, developers can choose from a menu of community benefits. In this case, some commissioners hoped to influence this choice through a recommendation to increase the money that would go toward affordable housing.

After two failed motions that would increase the amount of money headed to the Affordable Housing Trust Fund, commissioners eventually voted to endorse the originally proposed 50/50 division of funds, with Cox and Commissioner Alberta Phillips against and Commissioner Nadia Barrera-Ramirez abstaining, but not without a heated discussion about how community benefits should be prioritized.

Cox forwarded a failed motion that would put all of the community benefit money toward affordable housing, saying to do otherwise would make the commission “completely and utterly hypocritical.”

“My understanding is that we’re splitting money that could go to affordable housing and sending half of that money to a nonprofit that negotiated some sort of agreement with the developer … to further enhance hike-and-bike facilities in one of the nicest, wealthiest areas in the entire city,” he said.

Commissioner Adam Haynes proposed a switch that would keep an already-established 50/50 split on money for the first floor area ratio (FAR) increase to 15:1, but would divert the money from the new increase to 20:1 FAR to affordable housing. That motion failed as well.

“If we’re having a hike-and-bike crisis, please correct me, and we can put more money towards hike-and-bike facilities,” Haynes said. “My motion is to address the housing crisis that we’re having.”

Commissioner Felicity Maxwell pushed back against Haynes’ joke, saying the deadly consequences of a car-centric city could, in fact, constitute a crisis, and she pointed out that construction of more multimodal infrastructure in a busy area was a crucial community benefit. “We certainly have a crisis in making sure people can walk and bike safely in this city,” she said.

In addition to questioning the amount going toward affordable housing, Phillips questioned why developers were paying a fee-in-lieu instead of building affordable housing on-site. She noted that from 2014 to 2019, not a single affordable on-site unit was built for downtown developments that participated in the density bonus program. 

“What that has done is make the city more segregated, economically as well as racially and ethnically,” Phillips said. “We often talk about our Austin values, but we don’t practice them when it comes to these things.”

“You’re really creating a city that becomes whiter and more wealthy in the core areas of the city,” she said. 

Attorney Richard Suttle, who was representing the developers at the meeting, disagreed with Phillips’ assertion, saying it was more efficient to pay a fee-in-lieu in high-rise construction, because it ultimately resulted in more affordable housing units.

“I’ve seen the math and it just, to me, makes more sense to be able to build more affordable units,” he said. “And my personal opinion is, especially in high-rise construction, you can do better. Even it’s within a mile or two of this, it’s better to do the fee-in-lieu. And I think the city agrees with me.”

Austin City Lofts HOA Board Member Connie Temple spoke in opposition to the proposed development in general. She cited the property’s location within the 25-year floodplain of Shoal Creek and on West Avenue as a reason to hold the increase to a 15:1 FAR instead, which would mean the loss of an estimated 89 housing units.

“To be clear, we are not opposed to development on these properties in a manner that’s appropriate for this location,” Temple said. However, she noted that the addition of 430 parking spaces was troubling. “Today, traffic routinely backs up on West Avenue between Fifth and Sixth streets. … And so very often it is difficult to dangerous trying to get in or out of the parking garage because of that stacked-up traffic.

“At a time when City Council is focused on reducing downtown parking and large, above-ground parking structures, this FAR increase request would seem to be incompatible,” she added. 

Suttle said that, despite a push for less parking in the city, it was still difficult for developers to finance projects without parking. “The goal is to get away from it … but in today’s world, to get this project built, that’s the parking that needs to be built,” he said. 

Suttle explained they had already compromised with Austin City Lofts and agreed to set the building farther back from the street and noted the lofts had gotten the same floodplain variance he would be seeking for his client. 

“There’s going to be a tall building next to them regardless of what happens here,” said Suttle, who added: “I don’t understand what’s wrong with a tall building next to a tall building.”

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Posted In: Housing, District 9