An Austin development program that's been both widely used and criticized since its creation last year will be revised and potentially expanded, after city officials acknowledged unintended effects tied to new construction under the policy.

"If we want a functional system ... for gaining affordable housing, we need more options, more tools. I believe that will get us more housing and more affordable housing," Mayor Kirk Watson said of the update. "I also believe it will avoid some of the unhappiness that comes from using a tool that might work great in some spots but might not be working as well as it could in some other places."

How we got here

Austin maintains several bonus programs that can see the city trade enhanced building allowances to developers in exchange for various public improvements and benefits. Bonus programs are used around town to develop prominent downtown towers, mixed-use projects near transit stations, student housing around The University of Texas at Austin, and new housing in neighborhoods.

City leaders previously expanded one such program to allow taller buildings with income-restricted housing in busy parts of town. However, a resident lawsuit eventually caused it to be voided in court.

In response, City Council established a similar replacement program early last year: DB90, or a density bonus allowing mixed-use projects up to 90 feet tall. DB90 requires at least 10% of new housing to be affordable based on the local median family income, or MFI. For property on major streets, most ground floor space must also be set aside for retail.

DB90 has drawn significant interest, with dozens of rezonings submitted and approved under the program in the past year-plus. It rapidly became more popular than other multifamily options, city staff previously reported, and about one-third of Austin's zoning applications last year were for DB90.

The program's spread around town so far could bring more than 15,000 new apartments and condos to Austin, based on proposals in city zoning documents, including well over 1,000 income-restricted units.

Zooming in

DB90 has drawn consistent opposition since its creation from residents who say the program can spur displacement by encouraging the redevelopment of existing housing that's often cheaper than replacement units.

Many also worry that new income-restricted units based on MFI are still too costly for many residents living in areas with lower income levels. This spring, the proposed redevelopment of the Acacia Cliffs apartments in West Austin sparked extended community opposition to that property's rezoning under DB90, and to the program overall.

DB90 has also been well-received by other residents for facilitating the transformation of vacant or underutilized properties in their neighborhoods and along major corridors. In one case, DB90 was used by Austin ISD officials for the planned redevelopment of an older campus with new housing for teachers.

As the Acacia Cliffs case gained continued attention in recent weeks, Mayor Kirk Watson said DB90 has become an "unhappy experience." A Watson resolution approved June 5 kicks off DB90 amendments and calls to create similar new bonus programs set to varied building heights, affordability requirements and commercial activation.

Watson said his proposal aims to create "density tiers" after DB90 produced a mixed bag of results as Austin's only citywide affordable bonus program. While it's bringing new mixed-use projects with shares of lower-income units as intended, he said it's also a bad fit for some neighborhoods.

"To be clear this isn’t about one case that’s garnered a lot of news recently. And DB90 isn’t, as some have suggested, 'fundamentally flawed'. This is about adding to the tools, not doing away with one we have just because it might not be perfect in all circumstances," he said.

The action taken

Watson's proposal was approved with only council member Krista Laine abstaining on the vote. City planning staff are now tasked with developing the new bonus programs "in a timely manner."

Later on June 5, officials also signed off on two more DB90 rezonings including the controversial Acacia Cliffs case after hearing from dozens of tenants and activists concerned about the outcome.

Council member Marc Duchen, who represents West Austin where the apartments are located, once again sought to postpone the case for several months. However, his move wasn't supported by any other officials leading to a final unanimous vote for the DB90 designation.

Some officials said they wanted to move the case and proposed redevelopment along given uncertain conditions around DB90, and a new state law about multifamily development in commercial zones that could impact the program. Trish Link, division chief of Austin's land-use legal office, said city lawyers are reviewing the possible "new reality" under that legislation as the additional bonus programs are created.

Council member Chito Vela also said he didn't want to risk a suite of tenant protections being offered by property owner Price Realty Corp.—including formal relocation notice, payment of four months of rent and moving expenses, the return of security deposits, the option to lease a new unit after redevelopment, and connection with an on-site relocation specialist—with further delay.

“I just want to point out that if we vote this down, it’s unclear what happens next. And we’re taking $5,000 out of the pockets of the folks that live there, and I’m just not going to do that," he said.

Duchen said his "go big or go home" postponement suggestion was one of several options for Acacia Cliffs that each carried risk, like potential redevelopment without any tenant protections or new affordable housing built. He also said council should work to avoid "scrambling to pick the least-best option" with the bonus program.

"Right now, because of some aspects of DB90, that’s where we find ourselves. My goal is to try and make sure we’ve got more good options available to us," he said.

What else?

The approved DB90 expansion resolution calls for new programs with redevelopment protection policies. That could include an anti-displacement provision brought by Mayor Pro Tem Vanessa Fuentes to require one-to-one unit replacement if existing housing is torn down.

Many Austinites have told council that the preservation of "naturally occurring" affordable housing—typically older units that are accessible based on their market rates, without any government subsidies or programs—should be a focus at City Hall. Later this summer, Duchen will bring a plan intended to preserve such housing with city funds that he said could help maintain apartments like Acacia Cliffs in the future.