How does Austin get more housing on the corridors?

This is a free edition of the Austin Politics Newsletter from April 19, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

On Friday CM Chito Vela unveiled two measures that would help an existing density bonus program to produce much more housing at a time when housing is desperately needed.

Vela proposed that any property that participates in the Vertical Mixed Use program be exempt from parking and compatibility standards, which reduce the height of a building if it is within 540 feet of a single-family home.

Council is already discussing an ordinance that would make the following changes to VMU:

  • Require VMU projects to have 10% of units affordable at 60% of the area median income (instead of the current 80% AMI)
  • Create a second tier, VMU2, which gives projects an extra 30 feet of height if they offer 12% units at 60% AMI or 10% units at 50% AMI

However, unless the city reduces or eliminates compatibility requirements, not too many developers are going to apply for VMU2. They need to be able to build to a certain height in order for it to be worth it for them to provide the required income-restricted units.

According to a recent staff analysis, only 34% of properties that are currently eligible for VMU would be able to achieve the full height offered by VMU2 due to compatibility. In fact, only 43% can even achieve the full height offered by the base zoning (usually 60 ft).

According to what builders tell me, there are few examples of other large cities with compatibility requirements as stringent as Austin’s. The rules are simply not, er, compatible with the needs of a growing city. And they are certainly not compatible with the goals of a progressive city that wants to be economically inclusive and environmentally friendly.

Eliminating parking requirements for VMU is a no-brainer because parking requirements never make sense and should never have existed to begin with. You don’t have to be a dyed-in-the-wool urbanist to believe that builders should be able to decide for themselves how much parking they need to provide tenants. Not only does the city force developers to devote land and money to building parking that they might have otherwise devoted to more housing units, but the mandate is essentially a subsidy for the auto industry that undercuts the other modes of transportation that the city is supposedly trying to encourage.

We already got a taste of these ideas through Affordability Unlocked, the ordinance that Council approved in 2019 that exempted developments from a number of regs, including compatibility and parking, if at least 50% of the units were income-restricted. In practice that means that the only developments that qualify are low-income housing projects that are subsidized by federal low income housing tax credits.

As great as it was at the time to see Council unanimously support some common sense relief for affordable housers, some of us worried it would make it harder to make the case politically to reform parking and compatibility for market projects. It’s ridiculous to think that one must ask permission to not build a parking lot, but thus is the perverse reasoning that guides City Hall’s approach to housing, where pointless regulations are cherished as leverage to extract “community benefits.”

Hopefully, however, the brutal housing conditions have changed the politics.

Now for the politics…

There was certainly hope that the politics had changed when the first response on the Council message board to Vela’s proposed amendments was a supportive statement from Vanessa Fuentes, whose views on housing have been hard to pin down:

“Given the housing and climate crisis that we are in, I believe it is important we urgently take action at the scale needed,” she wrote.

But then of course came the response from Ann Kitchen. It was Kitchen who actually authored the resolution in the fall that directed staff to develop the VMU2 proposal. The problem from Kitchen’s perspective is that staff actually brought back something that could make a big difference.

Under staff’s proposal, any property that is currently eligible for VMU would be eligible for VMU2 as long as the developer agrees to the additional affordability requirements. Kitchen, however, wants to require developers to go through the rezoning process to qualify for VMU2.

Not only would the tremendous cost in time and money associated with rezoning dissuade many developers from applying from VMU2, but each case would be vulnerable to a valid petition by nearby residents. If those who own 20% of the land within 200 feet of the property sign a petition, then the rezoning would need nine out of 11 votes to pass at Council.

Kitchen’s proposal does not reduce parking or compatibility requirements; she says it allows for “future discussions” on those subjects to occur.

Finally, she proposes raising the required amount of affordable housing for VMU2: either 15% of units at 60% AMI or 12% of units at 50% AMI.

(I don’t have an opinion yet on what the right affordability percentage should be. It is possible that Kitchen’s proposal would make the project unviable but I am not sure. There has not yet been robust economic analysis by staff or others)

Does Council need 9 votes?

Looming over the discussion of this issue during the City Council work session is the recent court ruling that essentially quashed the city’s ongoing effort to rewrite the land development code.

City staff’s interpretation of the ruling is that LDC changes –– even citywide changes –– are vulnerable to valid petitions if they change the zoning on a property. However, “text” changes within a zoning category are different.

Some have argued that text changes within a zoning category are not vulnerable to valid petition at all, but it sounds like city legal has decided that they could be but only if you get signatures from those who own 20% of the land within 200 feet of all of the affected property citywide. So in this case, to challenge VMU2, opponents would have to get signatures from those who own at least 20% of the land within that distance of VMU properties.

Unsurprisingly, today featured a lot of commentary from the preservationist bloc about the importance of “consensus” and “community input,” as well as concern about “protest rights.”

Alison Alter suggested she would be willing to support changes to compatibility standards but did not like the idea of a 90 feet building right next to a single-family house.

Mackenzie Kelly, whose views on housing policy are ambiguous, said she would like any change to have 9 votes.

The good news is that it does not yet appear that the mayor, despite his historic affinity for compromise at all costs, is not falling victim to the 9-votes-or-bust trap.

“I think we should earnestly try to find broad agreement and I’m fully committed to trying,” he said when I asked him after the meeting if he was set on getting nine votes.

Like Vela and other reform-friendly CMs, Adler said he does not support requiring rezonings for VMU2.

The whole purpose is to add some predictability and some ease and speed,” he says.

In an act of goodwill, Vela and other supporters accepted the request, voiced first by Alter I believe, for a postponement. Council will take up the ordinance on June 9.

Adler said that he believed there would be a vote on VMU2 on June 9 but he couldn’t say whether it would be accompanied by changes to compatibility and parking. He appears open to a “relaxed” compatibility, rather than eliminating it entirely.

Beyond VMU2, Adler said he hopes in June Council can adopt changes to reduce barriers to ADUs and allow residential development in commercial zones.

Also in June, he said, Council could direct staff to explore broader changes that affect non-VMU properties on the corridors, including relaxing parking and compatibility standards, albeit to a lesser extent. That would tee those ordinances up to be voted on in the fall.

Many small targets > one big target

It really is sad to see alleged progressives touting the rights of land owners to obstruct housing, but it’s a political reality that pro-housing forces must contend with. That means that if they have reason to believe that any pro-housing reforms are vulnerable to valid petitions, they should avoid bundling them up into one big target. They should flood the zone with a number of rapid-fire changes and force the housing opponents to pick their battles.

It costs a lot of money and time to gather the thousands of signatures necessary to defeat an LDC change. Make sure to remember that.

This is a free edition of the Austin Politics Newsletter from April 19, 2022. To get DAILY insights on city politics, click here to subscribe to the newsletter.

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