A push to roll back city land use programs aimed at creating affordable housing is progressing following the successful challenge to a wholesale rewrite of Austin’s zoning guidelines that concluded last year.

What's happening?

City lawyers and attorneys for a property owners’ coalition seeking to overturn multiple updates to the land development code—the rules governing the location and size of new construction throughout Austin—argued their cases before District Court Judge Jessica Mangrum on Sept. 26.

The residents are seeking to void four ordinances approved by City Council in recent years, while the city is asking for that request to be denied.

The opposed Austinites said action is needed to keep city officials from repeatedly violating the rights of property owners by sidestepping civic engagement rules amid the passage of housing policies. Canceling out the development programs would remove multiple options for the construction of more affordable housing across Austin, some of which have already been used extensively.

The context

Following a previous court ruling over the comprehensive code rewrite that Austin officials nearly completed in early 2020 after years of public debate, the resident group again prevailed in its challenge last spring.

A judgment out of the 14th Court of Appeals in March 2022 effectively ended the city’s controversial code overhaul process and led officials to consider adopting more targeted housing measures.

That 2022 decision stemmed from residents’ allegations that Austin officials had failed to properly notify affected property owners about the proposed land use changes or offer them the chance to protest the updates. Civic notice and protest rights related to zoning changes are requirements under state law.

Now, many of those same residents said the precedent set last year in the code revision case should be applied to four individual policies approved between 2019 and 2022, which they claim also advanced without proper notice or protest opportunity. Those include:
  • Affordability Unlocked, one of Austin’s most prolific development bonus programs that’s streamlined the creation of thousands of income-restricted housing units since its passage in 2019. The bonus program permits developers to build larger buildings than they’d otherwise be allowed if their project includes significant affordable housing
  • VMU2, an expansion of the vertical mixed-use bonus program that’s produced hundreds of income-restricted units, approved in spring 2022. VMU2 grants additional building height in exchange for affordable units
  • "Residential in commercial,” an incentive program that allows housing development in commercially zoned areas if affordable units are included, approved last December
  • "Compatibility on corridors,” a zoning overlay that waives development restrictions, such as height limits, for new construction along specific roadways and transit routes. The compatibility program passed alongside the commercial measure last December.
According to the plaintiffs

The latest legal activity is a result of a motion filed earlier this year by nearly 20 resident plaintiffs asking the courts to void the four development ordinances and hold Austin in contempt for violation of the 2020 and 2022 decisions against the city's processes.

Attorney Doug Becker, representing the plaintiff group, said the action comes down to the city's alleged recurring violation of state law rather than local opposition to density or affordable housing at large.

“The city does have a serious problem with regards to housing; there’s no question that action is needed. But the city has to follow the law when they enact those policies," Becker said in court Sept. 26.

In court and in legal filings, Becker argued the city's interpretation of relevant state rules in its defense is flawed, and that notice and protest requirements did apply to the recent ordinances.

His commentary covered his views on certain zoning terms in Texas government code, state legal precedent, past comments from city officials and the process of council's passage of the relevant items over recent years. He highlighted former Mayor Steve Adler's successful move to prevent VMU2 from being subject to notice requirements and said previous city postings did not meet Texas notification standards.

“They’re changing the content of the zoning, trying to keep the label the same and then arguing, ‘That’s not a zoning change,’” he said. “I just don’t understand why the city didn’t put as much effort and thought into giving the notice and honoring the protest that the law has said that they must do as they did in thinking of ways to get around those requirements.”

Becker also referenced recent comments from the council dais and in Mayor Kirk Watson's newsletter that framed previous actions related to notification in a more negative light. He also noted council is specifically charting a new course regarding public engagement ahead of notable land use votes coming later this year.

Overall, Becker said those facts point to the city's practice of stepping on residents' rights that should be stopped.

“The city has violated the permanent injunction, violated the appellate court holding—blatantly in this case,” he said. “This is not just a procedural technicality. [Bolton v. Sparks] makes clear these provisions are for the protection of the property owner, to safeguard liberty and to treat our citizens in a way where they have the rights that the state Legislature in the local government code has said that they’re entitled to.”

According to the city

Austin's response to the residents' move to cancel out the new development rules covers several rebuttals to their claims.

During her opening presentation Sept. 26, Assistant City Attorney Hannah Vahl said city leaders believe the 2022 judgment the residents are basing their argument on is not a solid foundation for new action. She said the benchmark doesn't apply to any situations outside of the past code rewrite, the sole subject of that case, and that the judgment also didn't clearly define which zoning issues the state requirements apply to.

For example, Vahl pointed to two adjacent sections of Texas Local Government Code that use various zoning-related terms, some of which don't carry notice mandates, and none of which were clearly specified in the appellate court's decision last year.

“There’s already a tension built into this permanent injunction,” she said.

Vahl also said according to Austin leaders’ view of those state rules, three of the four ordinances didn't affect existing base zoning or change the development allowances on individual properties, therefore avoiding any need to notify residents.

City leaders agreed the fourth and final ordinance—compatibility on corridors—was a base zoning change but that proper notice was offered at the time. Austin sent out mailers to 167,281 individual properties in addition to nearly 540 neighborhood groups; Vahl said the city generally “overnotices.” When a technical correction to the ordinance was needed months later, the city once again sent notice about the move.

“The city goes above and beyond ... when it believes individual notice is appropriate," Vahl said.

Another point raised by city lawyers was the challenge to Affordability Unlocked. While the other three ordinances were approved in the aftermath of the initial legal action over the code rewrite, Affordability Unlocked had already been on the books for months before the first lawsuit was filed and shouldn't be affected by any future rulings, they said.

They also pointed to Texas rules that prevent legal action against land use policy beyond three years after the changes take effect; the plaintiffs' latest request was filed nearly four years after council's Affordability Unlocked vote.

Finally, Vahl noted the program is heavily used by affordable housing developers that would be harmed if the opposition prevails.

In addition to the housing already completed, dozens of projects home to more than 5,000 units are already in planning or under construction because of Affordability Unlocked, according to the city. Vahl said rolling the policy back would damage builders around town that relied on the program to plan their developments.

What's next

After about an hour and a half of presentations and questioning Sept. 26, Mangrum said she'll take time to study both sides’ arguments before deciding on the issue.

Mangrum's upcoming decision could halt the resident-led drive to overturn the development bonus programs or potentially wipe out the policies themselves. Either way, that outcome may also be appealed.