Committee considers density bonus revamp

On Monday, City Council’s Planning and Neighborhoods Committee started the conversations about whether it could change Austin’s Downtown Density Bonus Program to require on-site affordable housing.

The Downtown Density Bonus Program allows developers increased entitlements, such as more height, in exchange for community benefits like affordable housing, public art and open space. When Council adopted the program in June 2013, it was with the understanding that it would be reevaluated in three years to see if the established trade-offs had struck the desired balance.

Currently, the Downtown Density Bonus Program allows developers to fulfill affordable housing requirements by providing on-site housing or by paying a fee-in-lieu to the affordable housing trust fund. Both of the residential projects that have used the program since it was adopted have opted to pay a fee-in-lieu, and no on-site units have been created. Mayor Pro Tem Kathie Tovo would like to see that change.

“My guess about why they’re choosing the fee-in-lieu rather than construct the units is it just is far cheaper,” said Tovo.

Council Member Greg Casar agreed this was most likely the case. He suggested that they research the relative costs of the requirement in order to better inform any future recalibration of fees.

Council Member Pio Renteria thanked Tovo for broaching the subject. He said he had been trying to figure out how to get affordable housing in the central city and that he looked forward to learning more about the city’s density bonus programs.

Planning and Zoning Department case manager Jorge Rousselin told the committee that over $1.3 million in affordable housing contributions will be paid out when Certificates of Occupancies are established at the two participating downtown projects. The third, which is a hotel, did not have an affordable housing component.

On the other hand, the Rainey Street Density Bonus Program, which requires on-site affordable housing, has led to the creation of 51 affordable units so far. While those 51 units will be required to remain affordable for only one year, last year Council amended the program to increase that length to 40 years going forward. However, no development has gone through the program since that change.

Somewhat ironically, earlier in the meeting housing advocate Stuart Harry Hersh and Endeavor Real Estate Group’s Jamil Alam called for a change to the Rainey Street program, asking that it be adjusted to allow a fee-in-lieu. Tovo said she would not support that change.

Alam pointed out that the current Rainey Street program had a stated goal of creating more residential development, greater density and more family-friendly housing, but in its present incarnation, it has done just the opposite.

Alam said, “It’s created a disincentive to build any three-bedrooms; it’s created a disincentive to build residential; it’s created a disincentive to build residential density – and, as a result, mathematically, a disincentive to build any affordable housing.”