Getting high on the corridors

This is an excerpt from the March 9 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

Recently the Planning Commission discussed a proposed reform of the Vertical Mixed Use density bonus program aimed at increasing the number of both market-rate and income-restricted units on major corridors throughout the city.

VMU has been around for well over a decade but, like most of the city’s density bonus programs, it has hardly been a game-changer in addressing the housing crisis.

Currently, projects that participate in VMU enjoy relaxed site development standards as long as they offer 10% of their rental units at 80% of the area median income and ground-floor retail or office. If we’re talking about for-sale units, then 5% must be affordable at 80% AMI and 5% must be reserved for those at 100% AMI.

The new deal

The proposal being discussed at Planning Commission, which was crafted by city housing staff, envisions a new program with two tiers. The first tier, VMU 1, would require 10% of units affordable at 60% AMI for rental developments and either 10% at 80% AMI for for-sale development or an equivalent fee-in-lieu.

Here are the most recent income levels in the Austin metro area:

Nobody seems too bothered by the prospect of a steeper affordability requirement. It’s very likely that the market units are already affordable to those at 80% AMI and many developers seeking VMU zoning have already been offering to provide the affordable units at 60% AMI.

Keep in mind that despite the name, you don’t get any extra height for VMU. So you’re allowed to go only high as the base zoning allows, which in most cases on the corridors is 60 ft.

VMU2

Hence the proposed second tier of VMU: VMU2. Under this program, developers would get an extra 30 feet of height in exchange for even greater affordability requirements: either 10% of units for those at 50% AMI or 12% of units at 60% AMI. For ownership units, you’d have to offer 12% of units at 80% AMI or an equivalent fee-in-lieu.

The compatibility conundrum

The impact of VMU2 will be severely limited unless it is exempt from existing compatibility requirements. You’ll recall that “compatibility” is a rule that limits a building’s height based on its proximity to a single-family house.

A single family home that is as far away as 420 feet can prevent you from getting to 90 feet of height.

Indeed, according to city staff, two-thirds of properties that are currently eligible for VMU2 wouldn’t be able to achieve the full 90 feet due to nearby single-family houses. In fact, 59% of VMU-eligible properties can’t even go up to the base height max (usually 60 ft) due to compatibility:

Further analysis of this issue comes from Michael Gaudini, a land use lobbyist for Armbrust & Brown (and ironically a former aide to CM Leslie Pool and a manager for Kathie Tovo’s 2018 reelection).

The first column on the left of this graph shows the total amount of city land that is zoned for a use that triggers compatibility (single-family), while the second shows the total land that is zoned for any of the city’s density bonuses. The small green column represents land zoned for VMU and the nearly invisible purple column on the far right represents VMU-zoned properties that would be able to take advantage of the VMU2 height bonus.

Gaudini then shows what the impact means on specific corridors. Here he looks at all the land within a quarter-mile of Burnet (blue) and South Lamar (orange). Because there are so many single-family homes within that distance, very few properties are able to go up to 60 feet, let a lone 90 feet.

Of course, the other big problem is that much of the corridors aren’t zoned for VMU to begin with. That’s because the city has largely left it up to Neighborhood Plan Contact Teams to decide where to allow it. Sure, developers can still seek to rezone to VMU, but they are reasons they would shy away from that –– there’s always the chance it will become a contentious, expensive battle that might ultimately fail. It might just be a better bet to build a Walgreens.

The image below shows how little (red) of Burnet Rd is currently zoned for VMU and how even less of it (green) would be able to get to 90 feet under the proposed VMU2.

All of this goes to show that zoning for density on the corridors might not change much unless you are willing to address certain other rules that restrict what can be built.

The Planning Commission merely kicked off the conversation last night, but they’ll hopefully be taking action and making a recommendation at their next meeting on March 22. It will then be up to Council to act.

This is an excerpt from the March 9 edition of the Austin Politics Newsletter. To get daily breaking news and analysis on city politics, click here to subscribe. 

One thought on “Getting high on the corridors

  1. I was wondering about it being affordable to 80% MFI, that is ~$80K which seems like they could afford a ~$260K-$300K unit depending on their situation. I don’t think many new units are selling for that in these new builds, I thought that got you more a condo in an older building. But I am curious if you are seeing 2bd-3bd units selling for this amount in these new buildings as that would be a very strong argument for these everywhere

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