With the latest draft of the city’s land-development code rewrite, CodeNEXT, up for discussion by City Council, some members see it as a potentially useful tool in easing the city’s affordability concerns. Many council members agree that increasing the level of housing density allowed by the code could help keep prices from rising as steeply; however, how much density should be allowed and where to put it remain points of contention.
North Austin District 4 Council Member Greg Casar said that there are a few ways that rewriting the land-development code could curb home and apartment price growth. One method is to increase density along corridors that surround significant roadways by allowing residential units to be built above existing retail and office space. In neighborhoods with less substantial roadways, Casar said the code could allow for a greater variety of housing options such as duplexes, triplexes or small apartment buildings.
“I don’t think anybody on the dais has said that CodeNEXT is going to fix affordability in it of itself,” Casar said. “However, we have a lot of problems that are making things worse that we can address now to slow price increases.”
Casar’s neighboring council member to the west, Leslie Pool of District 7, said her constituents are concerned about allowing increased density in neighborhoods that have traditionally housed single-family homes.
“I’ve been here almost 40 years and I have a strong sense of what the Austin cachet is,” Pool said. “When I make decisions it is informed by being really connected on a personal level to this community.”
The Density Debate
The current draft of CodeNEXT, which was created over several years with input from city planning commissions, addresses many issues such as flood mitigation, drainage and parkland preservation. The main area of debate among City Council members and affordable housing advocates, however, involves the proposed code’s changes to density.
The current draft proposes that the city allow for more residential zoning above retail and office space along major corridors such as North Lamar Boulevard, Burnet Road or US 183. The exact corridors to receive zoning for added density are still being negotiated among council members, but many agree that access to major roadways and transit options are important factors.
District 6 Council Member Jimmy Flannigan said the Lakeline Mall area along RM 620 is a potential option.
“[Lakeline has] been identified as a density retail area for a long time; it’s served by two highways and a train line,” he said. “There’s fields there and the opportunity to redevelop some of the parking lots that were full 30 years ago that aren’t anymore.”
Pool said she could support new residential zoning along North Lamar, but she is skeptical that adding density will lower costs.
“I hold pretty strongly to the belief that density does not lower the cost of living in a town like Austin that is in a development boom,” Pool said. “There are so many people wanting to move here the market is controlling the prices.”
Transit and traffic
Some have expressed concern that adding density along already congested corridors would increase traffic, Flannigan said helping more people afford to stay in Austin will help ease traffic from commuters traveling through the outlying areas of the city.
Casar, another proponent of increased density along corridors, said access to transit is a deciding factor in allowing it.
“I’ve spoken to many people who want more frequent bus routes,” Casar said. “The way you get those from [Capital Metro] is by having more riders. So if you have more riders living near the stops, you’ll get higher frequencies.”
The Northwest Austin market
Despite their disagreements, Northwest Austin’s council members agree that the city’s land-development code needs reform soon.
Flannigan said in one election cycle, he has spoken with constituents who moved to Northwest Austin from Central Austin seeking lower costs of living and then moved again to Cedar Park and other suburbs for the same reason.
“If the city doesn’t accommodate the growth that’s coming, that growth will get built in Cedar Park, Leander, Hutto and Taylor,” he said. “Then all those people will drive through Northwest Austin to go to work unless we figure out how to solve this problem.”
The real estate market in Northwest Austin also presents challenges for renters. Strong development of apartments in Northwest Austin in recent years has caused rental rates to stabilize, however developers may begin to step away from the market until demand increases, allowing rates to rise again, said Bruce McClenny, president of Houston-based apartment rental trend website,
There are nearly a dozen apartment complexes either opening soon or under construction in North Austin and Northwest Austin.
“The people that fund [developers] to build [apartments] are looking for returns,” McClenny said. “They see this [data] and say we better hold off and see how the market comes back. Let this slow down and build into a market that doesn’t have so much supply.”
Recently, apartment building capacity in Northwest Austin remained close to 94 percent, which McClenny said influences a developer’s decision to build in an area.
“If you’re over 96 percent [capacity] your rents are too low, speaking from somebody in the industry,” he said. “Once you get down into the lower 90s and at the 90 percent range that’s when it turns more into a renter’s market as opposed to a landlord’s market.”
Casar said his constituents see rent increases when old apartments receive upgrades to attract new tenants.
“I’ve spoken with so many of my North Austin constituents whose rent has continued to get pushed up just because a landlord throws a new coat of paint on the building and gives it a new name and people get pushed farther outside of the city,” Casar said.
Other affordability tools
The CodeNEXT draft also requires income-restricted units in certain buildings as a part of the code’s Affordable Housing Bonus Program.
“Austin is trying to work with these developers and have them set aside a certain percentage of their overall supply,” McClenny said. “You must have a certain qualification of renter for those units, and you can’t do that at market rent. You have to have a different rent level for [the city] to approve this construction for you.”
Nicole Joslin, chair of affordable housing advocacy group Austin Housing Coalition, said that although she supports the overhaul of the code, she worries that the bonus program will not provide enough housing for Austin’s low-income population.
“If you ask developers [the incentives are] not enough. If you ask housing advocates [the incentives give] too much,” Joslin said.
As council members seek compromises on the code, Flannigan said coming to a consensus and passing a new code should be a priority for the council. With packed agendas in June leading up to council’s July hiatus, the first reading of CodeNEXT was pushed back.
On July 16, a Travis County district judge ruled in favor of a lawsuit filed by local activists to allow residents to vote this November on whether they agree that CodeNEXT, and all future code rewrites, should be left to a public vote.
“There’s more to go to get it to reflect not just what’s on the ground today but a plan and a process for what this city is going to be,” Flannigan said. “If we do nothing, the problems that have gotten worse in the last 30 years will continue to get worse over the next 30 years.”