Austin weighs controversial zoning change

Austin— a city with an increasingly tight housing inventory— is looking at a major significant zoning change.

With eager developers on one side and skeptical commissioners on the other, the potential change in the zoning code would allow housing to be built on land zoned for commercial use— possibly adding roughly 46,000 new homes to the market, according to a 2018 Planning Commission working group. A study cited by the Austin Business Journal found that more than 7,400 commercial parcels would be eligible to participate under the code change.

Introduced in late 2021, the code change is on the agenda for a November 8 meeting of the Planning Commission. After making the rounds through City Hall, it was postponed last week by the commission so the measure could be reviewed by the city’s Zoning and Platting Commission and the Environmental Commission, as well as City Council.

Back in March, a state appeals court ruled in favor of a citizen-led lawsuit against the city of Austin regarding its attempted sweeping changes to the land development code. The ruling struck a major blow to the city’s efforts for code reform. This latest zoning change is one of the many proposed policy tweaks aimed at boosting housing supply and creating more “missing middle” housing, such as duplexes and townhouses.

“This amendment was developed as a way to add housing capacity,” said Erica Leak, an officer with Austin’s Housing and Planning Department. “The concept is basically to allow residential parcels on land that is currently zoned commercial.”

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For prospective developers looking to take advantage of this zoning change, however, there are a number of strings attached. Residential projects built on commercially zoned lots—rental and for sale— would need to have at least 10 percent of its units set at an affordable price for households earning 60 to 80 percent of the median family income level for up to 99 years. Additionally, with some exceptions for arts-focused institutions, the proposed zoning change won’t allow developers to pay a fee in lieu to take advantage of the program without offering housing at below-market rates.

Commissioner Grayson Cox, a civil engineer, voiced skepticism over excluding fees-in-lieu from the program.

“I used to be a big fan of getting rid of fee-in-lieu … there may be certain areas where forcing affordable housing in a particular area versus capturing the funds for that and using it, where we could potentially get more yield, might be beneficial,” Cox said.

Fellow commissioner Greg Anderson, a community affairs director for Austin Habitat for Humanity, also had pause over the other developer restrictions.

“I don’t understand why we would keep site area requirements in a program where the goal is to add housing capacity,” Anderson said.

The proposed change would also prohibit this kind of housing within 500 meters of a highway or near intensive manufacturing with noxious byproducts, because of health concerns. However, Commissioner Jennifer Mushtaler, an OBGYN physician, says this restitution from highways could be potentially counterproductive to other efforts already in place.

“Doesn’t that go directly against our idea to have transit corridors and Project Connect, and everything that we are trying to do to make things walkable and livable?” she asked, suggesting the proposal also go through the city’s health and environmental-related committees to discuss this matter further.

Commissioner Awais Azhar, a community and regional planning Ph.D. student at the University of Texas, had similar concerns. He said the 500-foot buffer did not align with the city’s previous actions, including awarding bond funding to Cady Lofts, a 100-unit supportive housing project located along I-35 in downtown Austin.

“Either we are out of compliance with our own planning principles, or we are not sure what the planning principles are,” Azhar said. “We are not being consistent.”

— Maddy Sperling