Developers can get more height, density for including low-cost units or paying a fee.
By Sarah Coppola
AMERICAN-STATESMAN STAFF
Saturday, February 02, 2008
In its first attempt to create the mixed-income downtown envisioned by planners and activists, the Austin City Council agreed Thursday to offer developers incentives to build affordable housing in the urban core.
Downtown developers of commercial or residential projects could build bigger, taller projects than city rules normally allow, but they'd have to sell or rent some units at lower-than-market rates or pay into an affordable housing fund. The move is a first for the city, which until now, has urged developers to build more affordable housing downtown without an official policy.
The plan resulted from more than a year's worth of work and debate by volunteer-led commissions, beginning with an affordable housing task force started by Council Member Jennifer Kim. The final ideas were backed by a mix of real estate professionals and affordable housing activists — an unusual pairing for City Hall.
But the incentives could end up being changed in a year or so, when the urban planning firm Roma Design Group, which the city is paying $600,000 to write a downtown master plan, unveils its final ideas for spurring more affordable housing.
In a report finished last month, Roma said the city should focus on getting affordable housing in midrise buildings (which are less expensive to build) and help pay for it with fees developers contribute to get extra height or density on their projects.
Downtown Austin Alliance Executive Director Charlie Betts argued that the city should wait to see Roma's analysis before rushing to put incentives in place.
But former Real Estate Council of Austin President Tim Taylor, the co-chairman of the housing task force, said it makes sense to enact some incentives because downtown developers are already seeking more square feet on projects.
"Why not get something on the books now? The worst thing that happens is we get some affordable housing," he said.
Under the ideas the council unanimously approved, developers who ask to build bigger, taller downtown buildings than city rules allow would have to make 10 percent of the extra square footage the city grants them affordable.
Owner-occupied units must be affordable for folks earning less than 120 percent of Austin's median family income, about $86,400 for a family of four. Rented units must be affordable for those earning less than 80 percent of the median income, or $56,900 for a four-person family.
Alternatively, developers could pay a fee of $10 per extra square foot they receive. The city must use that money to buy or build affordable housing downtown or within two miles of downtown.
For example, if the city grants a developer an extra 80,000 square feet, the developer could either sell or rent 8,000 square feet at lower-than-market rates or pay $800,000 into the affordable housing fund.
The city has agreed to speed up projects that include affordable units through Austin's notoriously slow development review process. It will also waive most city development fees for those projects, including a fee used to build parks near new developments.
City officials have agreed to waive up to $750,000 in fees this budget year. They have not estimated how much money the affordable housing fund might generate.
For commercial projects only, half of the money from the $10-per-square-foot development fee would go into the affordable housing fund and half into a community benefits fund to pay for things such as public art, child care, green building, cultural facilities and help for the homeless.
In recent years, several downtown developers looking to build controversial, taller-than-normal towers have offered to donate money to community causes such as affordable housing or park improvements. The offers smoothed the way with city leaders and neighborhood groups, but the deals were done in an ad hoc way, outside of the city's purview. The new incentives will make the process more predictable, said developer and downtown commission member Perry Lorenz.
Austin architect Stan Haas voted against the incentives as a member of the city's downtown commission. He worries that the housing fee conflicts with city leaders' goal of encouraging tall buildings in the urban core as an antidote to sprawl.
"We need to be very careful about levying a charge against the very place where we're trying to build denser facilities and improve our tax base," he said.
scoppola@statesman.com; 912-2939
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