Downtown Density Bonus Program revamped, fees allocated to affordable housing

To address a growing need for affordable housing in the city, the Austin City Council revamped the Downtown Density Bonus Program June 27 by recalibrating a fee paid by residential developers in the urban core in place of the developers providing affordable housing units. Council also allocated the money generated from the program fees to the affordable housing units.

"We need to give developers incentives for adequate housing for the chronically homeless and we need bonus fees that will actually work as an incentive, not as an escape clause," said John Wright, senior pastor at First United Methodist Church of Austin, who spoke at the meeting.

The city council modified the program so that Central Urban Redevelopment zoning may not be used to increase the floor area or height of a development and get around the program. Council also recalibrated the fee to range from $3 to $10 per additional square foot, depending on where the residential development is located in the downtown area. The area where the program applies is roughly bounded by Lady Bird Lake, Martin Luther King Jr. Boulevard, I-35 and Lamar Boulevard. Rainey Street is excluded from the area.

Mayor Lee Leffingwell said he supported dedicating the money for low-barrier permanent supportive housing because the city has "prioritized" in the past, but it has not worked to the council's satisfaction

"I just think it provides an extra effort to make sure that money is spent on permanent supportive housing," Leffingwell said.

Charlie Betts, executive director of the Downtown Austin Alliance, said at the June 27 meeting that the DAA supports the revisions to program and asked the council to designate the funds from the program to low-barrier, permanent supportive housing projects for the chronically homeless.

"It would not be necessary to designate that if the previous track record the past three years had not pretty much ignored that specific population," Betts said. "That population is not getting housed with our affordable housing project."

Betsy Spencer, director of the city's Neighborhood Housing and Community Development division, said the city has put in about 279 units of permanent supportive housing units out of a goal of 350 units, but that developing low-barrier units has been "difficult."

"As folks have told you tonight, it has been very difficult to get landlords and everyone to want to be able to do that model," Edwards said during the meeting.