City Hall Hustle
5:06 pm
Wed March 20, 2013

City Hall Hustle: Luxury Hotels, Affordable Housing & the Zoning Brawl Over Downtown Density

The City Council adopted the Downtown Austin Plan in late 2011. With it, the council OK’d what’s called the Downtown Density Bonus Program. It basically says that developers who want to build more densely than the standards allow would have to offer certain community benefits: things like on-site affordable housing or a paying into a fund for affordable housing elsewhere.

But nearly a year and a half later, Austin’s still waiting on specific guidelines for the Density Bonus Program.

In the meantime, developers have used Central Urban Redevelopment, or CURE zoning, to build more densely. It suggests certain community benefits, but is far less prescriptive. (Here’s a cheatsheet of Austin zoning categories.)

A resolution this week from council members Kathie Tovo and Laura Morrison calls to kick CURE to the curb and have the Downtown Density Bonus Program ready for council consideration in June.

At the council’s Tuesday work session, Tovo described the resolution as a positive for the city and developers alike.

“In the interest of providing the kind of consistency and predictability to the development community that we often hear that we would like,” Tovo said, “stating a guiding principle, stating that this is going to be our guiding principle from here on out, I think makes good sense.

But Mayor Lee Leffingwell had a different take.  He said the resolution was “establishing a policy to address future actions of the council, and I can't support anything like that, I don’t think it has any validity. I don’t think it changes the factors that are in play right now regarding the legitimacy of bartering for a zoning approval.”

It’s a note Leffingwell’s sounded for a while now.

Let’s rewind to the council’s March 7 meeting: “What we’re dealing with here,” Leffingwell said back then, “at its very best, is a gray area of the law, and its worst is a clear violation of the law in considering, requiring a payment or compensation in return for approval of a zoning case.”

Up for third and final reading that day: zoning approval of the Hotel ZaZa.

The zoning request? CURE.  The applicant: influential zoning attorney Richard Suttle.

Suttle argued the Downtown Density program wasn’t ready to go yet.  “You have I believe, in your downtown plan a concept,” Suttle argued. “There are things that need to be fleshed out in that concept plan.”

One of those things that needs fleshing out? According to Suttle, exactly who would take the funds for affordable housing. “If we wanted to do that, who would we pay?”

The Hotel ZaZa is somewhat of a special case: a mixed-use development including both hotel and condo units. And Suttle is a deft attorney. He argued that the extra density they would get goes toward the hotel portion of the development, not the residential units. That’s because the Downtown Density Plan has affordable housing requirements in place for residential development, but not non-residential projects.

It was all a little too much for council member Bill Spelman. He basically argued that while Suttle abided by the letter of the law, he neglected the spirit.

“Whether its codified or not,” Spelman said, “we have the discretion to uphold it, and I intend to do so.”

The CURE rezoning narrowly passed. And should the “priority rush” on codifying the Downtown Density Plan pass Thursday, it could be one of the last big CURE projects council OKs.

Rounding Out the Agenda

In Fact Daily’s Mike Kanin helps the Hustle further explore the intricacies of zoning tradeoffs, especially in a state like Texas that’s outlawed inclusionary zoning for affordable housing. And if that wasn’t enough drama, the Hustle surveys the state of Austin Energy, and an item that calls for more evaluation of the pros and cons of a change to an independent governing board.

Got the inside scoop on City Hall? Drop us a line at news@kut.org.