Austin Launches Development Bonus Program

Austin has launched a program aimed at streamlining the development process and addressing the city’s affordable housing shortage. 

Developers that partake in the program, called DB90, would be allowed to build as high as 90 feet on commercially zoned properties, in exchange for offering on-site affordable housing, the Austin Business Journal reported.

Approved by the Austin City Council Thursday, DB90 marks a strategic shift in the city’s approach to urban development. The program replaces VMU2, which had sought to promote affordable housing but was halted by a lawsuit that highlighted deficiencies in public notice requirements.

The initiative is meant to strike a balance between the city’s growth needs and the imperative of ensuring housing accessibility for all residents.

One key departure from VMU2 is the requirement for each project to undergo a comprehensive review through the city’s rezoning process. That requires planning commission approval and council action, ensuring that neighboring communities are adequately informed and have a say in proposed developments. Such transparency aims to foster greater trust and collaboration between developers and residents.

Participation in DB90 comes with stipulations regarding the duration and nature of affordability commitments. Rental units must remain affordable for 40 years, while ownership units must maintain affordability for 99 years. The program sets specific affordability criteria based on household earnings, ranging from 50 to 80 percent of the area median family income, the outlet said.

Moreover, the ordinance could offer relief to projects affected by the lawsuit, allowing them to reapply for zoning without fees.

Austin has taken other measures to address housing shortages. In December, City Council approved the HOME Initiative, allowing up to three homes to be constructed on single-family lots. It streamlines approvals and eliminates residential occupancy limits. 

The city is also considering an ordinance that would allow small mobile homes and recreational vehicles to be used as leasable dwellings in single-family zoning areas.

—Quinn Donoghue