Planning Commission Recommends Adopting HOME Amendments ... With Amendments

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The march toward three homes on a single lot in Austin continues, with the Planning Commission officially recommending City Council adopt phase one of the Home Options for Middle-Income Empowerment ordinance.

Commissioners haggled over the amendments during a 12-hour meeting that stretched across two evenings, Nov. 14 and 15. If passed – which seems all but certain – the new ordinance would allow property owners to build up to three housing units on all single-family lots where currently only one or two units are allowed. Most of Austin is zoned for this type of use, so the effect of HOME is expected to be significant. Phase one of HOME will also eliminate rules regulating the number of unrelated adults who are allowed to live in a single dwelling unit, as well as slightly reduce the minimum lot size required for duplexes.

Over the past couple of months, two major concerns raised by city staff, stakeholders, and some Council members began to swirl around the ordinance. One of its key features is to only apply Subchapter F of Austin's Land Development Code – the notoriously complex and outdated list of rules outlining what kinds of buildings can be built across the city – to single-unit homes, rather than duplexes or triplexes.

Approved in 2006, the ordinance – also known as the "McMansion Ordinance" – was designed to combat an emerging trend in Austin's real estate market where older, smaller homes in established neighborhoods were demolished and replaced with new, sprawling mini-mansions. The ordinance introduced new limits on the size of structures in residential areas, but 17 years later, the ordinance has mostly had the opposite effect – it has primarily induced the construction of large homes that still conform to the limits set out in the ordinance. A developer interested in building a duplex under McMansion has always been able to get an exemption from the rules, but doing so is costly and onerous, so housing advocates have long pushed for abolition or reform of the rules.

HOME would achieve the former for two- and three-unit developments in single-family neighborhoods, but reasonable concerns surfaced prior to the Council-Planning Commission public hearing on the new ordinance indicating that HOME, sponsored by CM Leslie Pool, might have similar unintended consequences. Only, the LDC changes might incentivize sprawling duplexes rather than single-unit homes.

In an Oct. 25 message board post, Pool stated her desire to amend the ordinance to address this potential problem and craft a new preservation incentive – a throwback to the Austin's prior attempts at revising the LDC – that would incentivize developers to preserve portions of older homes sitting on lots they are interested in redeveloping. Planning commissioners heeded both calls, adopting amendments to their recommendation – crafted in the commission's HOME working group – intended to address both concerns.

To limit the size of new structures, commissioners amended their HOME recommendations to adopt a stair-step increase to floor-to-area ratios (FAR) that govern the allowable buildable space on a given lot. A higher FAR means that more of the lot can be built on, which helps developers maximize space on expensive land. For a two-unit development, the FAR would be set at 0.55; for a three-unit development, the FAR would be set at 0.65 – meaning that about 55% or 65% of the square footage on any given lot could be used for living space (and in any configuration, e.g., a side-by-side duplex or a row house). The recommendation also imposes similar FAR restrictions on the individual units within multiunit developments.

Designing an effective preservation incentive has proven to be a tough nut to crack over the years. The latest attempt from the PC was crafted in the HOME working group – largely based on input from Preservation Austin – as two separate but related programs. The "preservation bonus" would apply to structures built in 1960 or earlier and allow developers to build an additional unit beyond what the property is zoned for if at least 50% of the existing structure is preserved and 100% of the street-facing facade is left intact.

Commissioner Grayson Cox signaled alarm over potentially opening the city up to another lawsuit through this proposal, because when property owners were notified of changes proposed in the HOME ordinance – a requirement under state law – they were only told of the three-unit change. The new bonus could allow up to four units on a given lot, which was not included in the notice. The city's law department seemed to think the program would be OK, because any additional units would be awarded as a bonus, not afforded by right, but the change will undergo additional study before heading to Council.

Commissioners also approved a "sustainability bonus," which would apply to structures older than 20 years and built after 1960. If developers preserve at least 50% of a qualifying structure, the dwelling space would not count against their FAR calculation – potentially allowing for more living space on a lot.

The final recommendation, adopted on an 11-2 vote (Commissioners Cox and Jennifer Mushtaler voting against), also included provisions altering regulations on minimum yard setbacks and direction to staff to explore adjacent policy ideas like new enforcement procedures for rules regulating short-term rentals, and the creation of a "low-interest lending program" for new two- and three-unit developments. Commissioners also rejected amendments that would have narrowed the applicability of the HOME ordinance to fewer lots throughout the city.

After thanking Commissioner Awais Azhar – who chaired the HOME working group and carried out the lion's share of policy work around the amendments – PC Chair Todd Shaw said the body should be proud of the work they had accomplished.

"No action is not working," Shaw said of the decade of inaction city leaders have delivered on LDC reform. "We've got a land code that's 50 years old," Shaw continued. "That's got to alarm you. We can't be the 10th-largest city [in the United States] and depend on that for the [housing] needs in the city."