How can Austin build enough housing? Commissioners debate solutions for $11B dilemma

Austin’s swift population growth and affordability concerns were put under a microscope at a recent Austin Zoning and Platting Commission meeting, which sparked debate over what to do as the region’s ascent is only expected to continue.

The discussion revolved around how the city can make it easier to create housing, especially at varying levels of affordability, which could include making code changes and rethinking how developer incentive programs like density bonuses work. The group discussed the topics at its Oct. 19 meeting, and no action plans or recommendations to Austin City Council were nailed down.

The city has attempted to bring the land development code — which determines what can be built where in Austin — up to date for many years, though the latest attempt was halted by a lawsuit from a group of homeowners. A judge ruled in favor of the homeowners in 2020 but the city appealed and the suit could be resolved early next year.

Council members have expressed interest in moving forward with a piecemeal approach to code updates in the meantime, though those discussions haven’t kicked into full gear yet on the dais. City leaders are also working updating a popular density bonus program.

In a nutshell, from 2010 to 2020 the city of Austin population shot up 171,465 to 961,855, or 21.7%. The raw population increase of more than 171,000 trailed only major cities such as New York, Houston and Fort Worth, according to U.S. Census data. Affordability and housing supply concerns are at an all-time high, having been exacerbated over the course of the pandemic. Developers are scurrying to get more units on the ground amid labor and material shortages.

As a result, the city is far behind its goal to create a massive number of affordable housing units through the latter part of this decade.

The city adopted the Strategic Housing Blueprint in 2017, which aims to significantly increase the city’s affordable housing stock by 2028. It called for 135,000 housing units to be built in Austin over 10 years at all income levels, which city staffer Erica Leak told commissioners could cost roughly $11 billion.

Through 2020, the city was roughly 19% toward its overall goal with the most progress seen in the creation of housing for those making above 81% of the median family income level. Austin has seen the least progress for those making 30% MFI or below, with nearly 240 units created out of the 20,000 units expected through 2028, according to the data. The 2021 Austin metro MFI is $98,900 for a four-person household.

“Those units obviously require a lot more subsidy, and it’s very challenging to get those units through density bonus programs because of the level of cross-subsidy required to be able to get to that low of a median family income,” Leak, acting assistant director of the Housing and Planning Department, said of housing for those making 30% or less of MFI.https://341f610510941f6879650d108b18edbc.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

RECOMMENDED

https://341f610510941f6879650d108b18edbc.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.htmlRESIDENTIAL REAL ESTATEHome prices fell again in SeptemberRESIDENTIAL REAL ESTATEWhy Columbus is in a ‘sweet spot’ for solving its housing challengeRESIDENTIAL REAL ESTATEMalvern mansion with a Lego room and history of ill-fated owners hits the market for $9.875Mhttps://341f610510941f6879650d108b18edbc.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

To be sure, some affordable units have been created in recent years through density bonus programs, Affordability Unlocked and the SMART Housing program. City staff reported that more than 10,164 units have been completed through developer incentive projects and 21,170 units are in the pipeline.

Click here for the full report of progress made on the Strategic Housing Blueprint through 2020.

Leak said all layers of affordability also aren’t being created naturally by the market, meaning most developers aren’t creating units for varying levels of affordability out of their own volition.

Some developers have said that comes down to being able to crunch the numbers and appease investors, plus the city’s zoning code from the 1980s has created barriers to dense developments in today’s market.

Additionally, there is not a ton of undeveloped land left in the city, which staffers highlighted in the following map. Commissioner Hank Smith called the dwindling supply of land “disturbing.”

“If we’re going to look at our population doubling in the next 20 years, there’s no place to put them,” Smith said. “We will have to be redeveloping tracts of land in neighborhoods and business areas. There’s no other choice, so we have to be … taking whatever options we have at this point in time.”

Still, several commissioners pointed out that the city is falling behind broadly on affordable housing goals and that there’s a need for more housing on the higher end of that scale, too.

“We need to be providing more housing everywhere for everybody. We can’t focus on certain groups or categories. If you don’t provide housing for the people in what is traditionally the upper-income level, they’re going to move into the middle-income level housing. The people in the middle-income housing will then move into what traditionally has been lower-income housing — so there will be a trickle-down effect as people just find a place to move,” Smith said. “And those with the resources will find a place, and those without resources will be pushed out. We need to be finding places for everyone to live all across the city at all levels.” 

The Biden administration announced in June that it’s targeting exclusionary zoning policies and has proposed a program to incentivize eliminating barriers to creating affordable housing. Those exclusionary zoning policies include minimum lot sizes, parking requirements and limits on multifamily housing — some of the elements in the Austin zoning code.

“Communities of color are very much more likely to live in multifamily housing and lower-income people are very much more likely to live in multifamily housing as renters. … We ban multifamily housing in most of Austin, which basically we’re banning most of the housing for people of color and low-income people,” Commissioner Timothy Bray said. “We’re basically legally mandating almost segregation still in our city right now with our zoning.”

Commissioner Betsy Greenberg suggested city staffers consider ways to front-load some of the $300 million in anti-displacement funds under Project Connect to make that money “more efficient.” The funds will come from tax revenue under the $7.1 billion transit plan.

“Does it really make sense to spread that spending over a 13-year time horizon?” Greenberg asked. “If you wait five years, or for some of that money, even 10, you’ve kind of missed the boat and people are already displaced.”

The city has said it will use the anti-displacement funds to purchase property that will preserve or add to the amount of affordable housing near transit corridors or to finance other anti-displacement strategies.

Courtesy of ABJ. See full article here.