Austin planners are scrambling to recalibrate downtown development rules after a new state law stripped cities of their power to regulate density.
Senate Bill 840, which took effect in September, bans local limits on floor-to-area ratios for residential projects — a change that upends the city’s long-standing system for shaping growth in the Central Business District, the Austin Business Journal reported.
Before the law, Austin used FAR caps to control size and density downtown, requiring developers to join the Downtown Density Bonus Program if they wanted to go bigger. The program traded extra height and density for public benefits such as affordable housing units or financial contributions to housing funds.
Without FAR restrictions, planners say the density program could lose its leverage — unless the city imposes new height limits.
“We have to put in a height limit to make the Downtown Density Bonus Program continue to work,” city planner Alan Pani said during a Planning Commission meeting.
City staff proposed a 350-foot height cap for Central Business District projects, with anything taller required to go through the density-bonus program.
But the Planning Commission recommended doubling the limit to 700 feet for projects in downtown’s core and the Rainey Street area to maintain developer flexibility and avoid stifling growth. The final decision will rest with the City Council.
“I don’t want to see us miss out on additional density, more riders for transit, more tax revenue and more neighbors,” Commissioner Danielle Skidmore said.
Austin’s skyline already soars well above those thresholds.
Only three towers top 700 feet. The 74-story Waterline, a Lincoln Property and Kairoi Residential project slated to deliver 352 luxury apartments next year stands at 1,021 feet. Meta’s Sixth and Guadalupe reaches 875 feet. And The Republic stands at 710 feet.
The median height for projects erected since 2017 has been north of 350 feet. Last year, it averaged just over 500 feet, according to city data.
Developers say taller projects are inevitable and economical. Urbanspace CEO Kevin Burns told the outlet that shrinking land availability favors vertical construction, with “optimal efficiency” for towers slightly above 600 feet.
“Going taller gets expensive fast,” Burns said, citing the higher costs for concrete, elevators and fire suppression systems.
City officials hope a new framework will preserve Austin’s density incentives and downtown momentum without running afoul of state law.
— Eric Weilbacher
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