An in-depth housing market analysis and proposed new zoning maps, both introduced in April, may guide efforts to address the city of Austin’s growing housing affordability issue.

The Strategic Housing Blueprint, adopted by City Council on April 13, recommends the city add 135,197 housing units by 2027, a goal that Mayor Steve Adler said was impossible to reach under the city’s “horribly outdated” land development zoning code, which is being rewritten as part of the multiyear CodeNEXT process.

However, Adler said the recently approved housing blueprint and proposed zoning maps could create enough housing density to accomplish the goals without compromising his “Austin Bargain”—a deal he made with residents to protect the city’s neighborhoods by concentrating growth along corridors, such as Burnet Road and Lamar Boulevard, and in major activity centers.

The first draft of the city’s new zoning maps, released April 18, marked a major milestone in the nearly four-year, $6.2 million CodeNEXT project. Neighborhood and urban activists alike expressed concerns over the proposed new zoning maps; however, CodeNEXT consultants and city staff insisted the new maps could enable 143,900 units over the next decade.

But questions remain whether the goals of the 10-year housing blueprint can be met—if the 135,197 units are built by 2027 and whether the new housing will be affordable.

A Rising Tide Housing costs in Central Austin have risen since 2015 with the highest increase in District 1. The charts show the range of medians for family income and home price and average rent for City Council districts 1, 3, 5, 7, 9 and 10.[/caption]

Combating the crisis

Mike Hebert, a neighborhood advocate who has defended the Austin Neighborhoods Council’s effort to keep density out of city neighborhoods, acknowledges Austin is in the midst of a housing affordability crisis, but he said adding density would only exacerbate the affordability issue.

“Most of CodeNEXT has no data to support it,” Hebert said. “The idea that an increase in density will result in affordable housing is nonsense. Market forces are going to result in displacement and gentrification. The city should not be in the business of accelerating it.”

Adler said a no-build policy would exacerbate the current imbalance between supply and demand occurring in the city’s neighborhoods.

“If we don’t do anything … we will very rapidly have $1.5 million two-bedroom bungalows,” he said. “… All of the core legacy neighborhoods that people are fighting to hold onto, we will lose them all. I can’t sit idly by while I watch those neighborhoods get destroyed.”

Urban activist Chris Bradford, a real estate and land-use attorney, said market-rate affordable housing has been eliminated from the city’s central neighborhoods. Building more housing will not make those single-family lots less expensive, Bradford said, but denser housing would lessen the burden of land cost on new units, potentially resulting in more affordable home prices.

“Go into [the] Zilker neighborhood; the dirt is worth $500,000. … I don’t think there is anything we can do to change that,” Bradford said. “All we can do is provide alternative housing types that allow people to buy or rent a house without having to incur the full cost of that dirt.”

Increasing new construction costs Increasing land costs, labor shortages and rising demand have affected home prices throughout Austin. Most of the new construction in Central Austin has been through condos, including detached single-family units, according to Metrostudy’s analysis.[/caption]

Missing middle Housing

According to city staff, Austin has not created much alternate or missing middle housing types—townhomes, duplexes, fourplexes and condos—since the 1940s largely because of regulatory constraints, a lack of demand and increased incentives to build single-family homes.

“One of the things the [CodeNEXT] consultants said over and over is [Austin does] a great job of single-family housing, of multifamily housing,” said Mandy De Mayo, executive director of HousingWorks Austin, an affordable housing advocacy group. “We don’t have enough of the stuff that is in between. As a result of that, we have very limited housing choices.”

But because the “Austin Bargain” calls for land inside the neighborhoods to remain protected from density, De Mayo said she was not confident the corridors could handle all of the additional housing capacity needed according to the approved housing blueprint.

Jacob Wegmann, an assistant architecture professor at The University of Texas, also expressed concern over the corridors’ ability to produce a majority of the needed housing units, but he said capacity was not the issue.

“The real question is whether anyone could profitably build enough dense housing in those very small areas,” Wegmann said. “My suspicion is we can’t.”

Wegmann said the land along the corridors is the most expensive in the city and best suited for high-end apartments—the demand for which is starting to level off, he said. Wegmann and De Mayo said mid- to high-rise buildings along busy corridors also fail to provide housing options for families.

Missing middle housing, on the other hand, is the cheapest type of housing to build, Wegmann said.

Proposed new zoning maps, which debuted April 18 as part of the ongoing CodeNEXT land development code rewrite process, could help Austin achieve housing goals described in the recently approved Strategic Housing Blueprint. This graphic shows where new housing units might go—mostly along major city corridors and activity centers. The core is bounded by MoPac, US 183 and Hwys. 290 and 71. Proposed new zoning maps, which debuted April 18 as part of the ongoing CodeNEXT land development code rewrite process, could help Austin achieve housing goals described in the recently approved Strategic Housing Blueprint. This graphic shows where new housing units might go—mostly along major city corridors and activity centers. The core is bounded by MoPac, US 183 and Hwys. 290 and 71.[/caption]

Corridor, housing capacity

Many expressed doubt the corridors, city centers and transition zones between the corridors and single-family neighborhoods could handle much of the 135,197 units recommended by the housing blueprint. However, Alex Joyce of Fregonese and Associates, a CodeNEXT consultant who helped engineer the housing estimate, said the proposed new zoning maps would allow for 75 percent—or 107,925 units—of the projected 143,900 units to be constructed within a half-mile of the city activity centers and busy corridors.

City staff said the zoning maps alone will not deliver the estimated 143,900 units.

“It’s really a market condition,” CodeNEXT Project Manager Jorge Rousselin said. “If [properties are]  entitled [for a certain land use] today, and they’re not being developed to [that] full potential, there’s probably a market reason why that’s happening. CodeNEXT will not be able to change that. That’s for the market to adjust.”

However, through new zoning classifications, Rousselin said CodeNEXT could eliminate some current zoning obstacles, such as parking requirements, which could influence market pressure and incentivize developers to utilize existing entitlements that encourage denser projects.

But that could result in more demolitions, said Mayor Pro Tem Kathie Tovo, who represents District 9 in Central Austin.

“It’s important that we look at to what extent we are encouraging the loss of existing housing stock,” Tovo said. “A vast majority of the affordable housing we have in this city is unsubsidized, … [a lot of which] we are in trouble of losing if it goes on the market and gets redeveloped.”

Land-use options

The city cannot legally require a developer to construct affordable housing. However, using initiatives such as its Density Bonus Program in high-demand areas can incentivize construction of affordable housing by granting extra space, height or other financial perks in exchange for adding more affordable housing.

Upon first glance, Tovo said the new zoning maps as proposed would allow more entitlements in these high-demand areas, putting the city at a disadvantage.

“If we are serious about creating affordable housing through our land-use options, then we really need to mandate it to the extent that we can, which is only through density bonus programs,” Tovo said. “But if you’ve granted increased entitlements through the zoning category itself compared to what’s on the ground, you’ve lost that opportunity to capture some of the affordable housing through density bonus.”

Only 1,700 affordable units have come as a result of existing density bonus programs, Tovo said, and CodeNEXT was expected to increase that number. CodeNEXT consultants will announce in May how many additional affordable units might be created under the proposed new zoning plan.

Additional reporting by Amy Denney