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Austin leaders introduce new affordable housing, agree to change strict compatibility rules for buildings

Austin has some of the strictest compatibility rules in the nation. During their most recent meeting, city council members took a step toward changing that.

AUSTIN, Texas — Growth and affordability in Austin were some of the main topics during the city council's final meeting before their summer break. 

According to Councilmember José “Chito” Vela (District 4), Austin has some of the strictest compatibility rules in the nation. During the meeting, the council took a step toward changing that. 

In an 8-2 vote, Austin leaders approved a resolution to slash those limitations. 

Compatibility rules determine how tall and how close a new development can be to a single-family home. Currently, Austin's standards apply up to 540 feet from a single-family home.

With this change, future developers will be allowed to build to a height of their liking – and potentially include more affordable units.

"If it wasn't for compatibility, we would have had more affordable housing. But those very strict rules just continue to suppress the amount of housing that we can create – both affordable and market rate," Vela said, adding, "I know there's fear about the change, but there's just so many examples of cities, beautiful cities, that have multi-types of housing, missing middle housing and duplexes in poor places and small apartments that work very, very well without any compatibility rule."

Vela noted that although this is a step in the right direction, there will still be a long process before any rules are officially changed. 

City staff will be conducting a study of Austin's compatibility and will present their findings to council. Once that's completed, recommendations will be made, according to Vela.

"People want more housing. People need more housing, and the city council is delivering more housing," Vela said.

Meanwhile, Councilmember Ryan Alter (District 5) introduced a resolution – which also passed – aimed at increasing affordable housing in all parts of the city. But he mentioned the program would be taking a more unique approach from what is already offered. 

The new density bonus program, called "Opportunity Unlocked," would be focused on the number of bedrooms rather than just units. It is also designed to steer the market toward stability in a more natural way, according to Alter.

"By making this program focus on the number of bedrooms, we're able to incentivize the building of affordable, family friendly housing, which is something that we really are missing throughout the city," Alter said.

According to the City, in April 2023, the median sales price for a home was $466,705. Alter said that is a reach for some residents. 

"Typically, our affordable housing programs require some form of subsidy, but we can't buy our way out of our affordability crisis. And so this item aims to create affordable housing within our neighborhoods and calibrate in a manner that will not require any public dollars to do so," Alter said.

He said that although he wants affordability to stretch all throughout the city, the primary areas will be where there are larger lots for more homes to be built on.

"We have to be sure that we make it attractive enough to a developer so that they look at a lot and don't just say, 'I'm going to build that big, expensive home that only few people can afford.' But instead they say, 'You know what? I could build a couple more moderately affordable priced homes,' and that be equal in their mind so that that's the product they deliver," Alter said.

The next step is for staff to turn the now-approved resolution into an ordinance, according to Alter.

Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.

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