The update caps new construction in much of the city core at 350 feet, unless they provide streetscape improvements and affordable housing funds. The change is expected to be short-lived with wider revisions to downtown development policies next year.
The big picture
This year's Senate Bill 840, known as "residential in commercial," allowed mixed-use and multifamily projects in places previously reserved for commercial uses only. Under that law, sites with at least 65% of their square footage dedicated to housing qualify as mixed-use, while those with three or more units qualify as multifamily.
Austin planners and officials have been working to address SB 840's effects on local regulations, including city bonus programs that help create affordable housing as new development takes place. Austin traditionally based some of those programs around the floor-to-area ratio, or FAR, density calculation. But SB 840 now blocks FAR restrictions for new residential development, moving Austin to center policy around building height instead.
The law's requirements now apply along many major city corridors where commercial zoning is in place. SB 840 has a particular impact in the Central Business District, or CBD, given a key building program there that'd been based on FAR.
Much of Austin's skyline is made up of towers developed through the city's Downtown Density Bonus Program. The program requires projects to adhere to Great Streets standards at the ground level, bringing wider sidewalks with more pedestrian amenities to city streets. Development under the program must also contribute to affordable housing, a process that's generated tens of millions of dollars for those purposes over the years.
In a shift away from FAR limitations, most of Austin's CBD is now limited to 350 feet, or roughly 30 stories tall. Projects seeking to go past that height must build under the bonus and its added requirements.
“I believe most everybody wants to hold onto both the density bonus dollars that fund housing affordability, and I believe there’s virtually universal agreement that we want to make sure that our downtown has the Great Streets treatment," council member Chito Vela said as the update was approved Oct. 23.
The approach
Austin's CBD has seen taller and taller buildings amid a wave of downtown development over the past decade-plus. The median height of projects proposed for the CBD rose from just 203 feet in 2010 to more than 500 feet last year, according to Austin Planning, and the new tallest tower in the city and state topped out this summer at more than 1,000 feet. A majority of downtown projects built since 2010 passed 350 feet.
"Will there be some projects that may have been building to 375 [feet] or something like that and decide to scale back a little bit? Maybe. But if you were already planning on going taller, it is unlikely you would stop at 350 based on the [affordable housing] fee in lieu that you would have to pay," Principal Planner Alan Pani told the Planning Commission in October.
The new CBD adjustment comes as Austin moves to revise overall Downtown Density Bonus requirements and update its broad civic plans for downtown, West Campus the and South Central Waterfront district. With that work taking place through 2026, Vela called to make the changes adopted Oct. 23 only temporary while those issues are considered further in the months ahead.
As amended by Vela, the interim 350-foot cap applies for all CBD development plans submitted from Nov. 3 until early next June. Before that end date, city planners are expected to bring longer-term regulations to encourage landmark development while ensuring there's no drop-off in affordable housing dollars being paid.
“Ultimately when this new ordinance comes back ... the goal would be to facilitate the construction of tall buildings downtown, skyscrapers, and to make it administratively as easy as possible so folks don’t have to be coming back for additional approvals," Vela said. "We want to really expedite the construction and really welcome tall buildings in those core downtown areas where we all agree that they should be.”
A closer look
The new approach could hurt Austin's affordable housing efforts due to declining participation in the density bonus program, city planners reported. However, they also said more major projects may not be on the horizon for now.
"Residential development activity will likely not change in an impactful way at this time due to financial market conditions, but increased residential development could be seen if market conditions improve," Austin Planning spokesperson Caleb Pritchard said.
The height cap was questioned by some during public reviews ahead of council's October vote over concerns about the change constraining new construction and hampering city goals.
Resident Betsy Greenberg, who sits on the Codes and Ordinances Joint Committee, said the height limit should've dropped closer to 200 feet to capture more benefits from taller projects. Others including Design Commissioner David Carroll shared similar sentiments, noting the gap between the previous FAR and new height caps leave a lot of housing program revenue on the table.
"If there’s a fix to make it apples-to-apples, you make it 200 feet and then you move on to the comprehensive rewrite of the program. I think making this change now is just going to hurt the program even more than it’s hurting now, until that fix can be done later," he said Oct. 15. "I don’t agree with 350 feet at all. It just seems arbitrary and hurtful to this program.”
DANA board member Roger Cauvin said the density bonus should be scrapped in favor of a new program that sets aside long-term city tax revenue from major development for affordable housing, rather than mandating a single upfront payment. That proposal was formally recommended by members of the city Downtown Commission before council's vote. City planners didn't weigh in for or against that concept, and Pritchard said more analysis into its feasibility and legality would be needed.
