1. Planning and Neighborhoods Committee of Council BRIEFING ON THE DOWNTOWN DENSITY BONUS PRO GRAM May 18, 2015

2. Downtown Density Bonus Program 1 1. Background on the Downtown Density Bonus Program Council Direction Principles Process 2. Summary of projects that have used the Downtown Density bonus Program 3. Rainey St. Density Bonus Program 4. Discussion and questions Today’s Presentation

3. Downtown Density Bonus Program 2 Background: City Council Direction 12/08/2011: “The City Manager is directed to process the amendments to City Code recommended in the [Downtown Austin] Plan, which include but are not limited to... A downtown density bonus program.” (Ord. No. 20111208-093); 03/28/2013: “The City Council initiates Code amendments to codify [a] ‘streamlined’ Downtown Density Bonus Program that will replace C.U.R.E. zoning... and present the amendments to Council for consideration no later than June 6, 2013.” (Res. No. 20130328-031); and 02/27/2014: City Council codified updates to the DDBP and the Rainey St. subdistrict of the waterfront overlay. (Ord. No. 20140227-054).

4. Other Listed Community Benefits DAP’S DENSITY BONUS PROGRAM Gatekeeper Requirements Affordable Housing Community Benefits Other Non-Listed Community Benefits

5. Gatekeeper Requirements Affordable Housing Community Benefits Other Community Benefits STREAMLINED DENSITY BONUS PROGRAM

6. Downtown Density Bonus Program 5 1.Downtown density should be encouraged, not penalized. 2.The benefits of additional density should be shared between the community and the project. 3.Existing zoning should be retained as the base for the density bonus program. 4.High quality urban design should be required for all projects seeking additional density. 5.There should be one, administrative and predictable pathway to a density bonus. 6.Additional density should be allowed only where appropriate and compatible. Background: Foundational Principles

7. Downtown Density Bonus Program 6 For a density bonus program to work effectively... bonuses need to be calibrated so that sufficient incremental value is produced for private developers, over and above any community benefits charged, to incentivize the additional development in light of increased risk and cost. Background: Foundational Principles The Austonian W Hotel Four Seasons Spring Condos

8. Downtown Density Bonus Program 7 1.Amends CURE Combining District so that CURE may no longer be used to modify maximum FAR or maximum height within the Downtown Austin Plan area; 2.Replaces the “Interim” Downtown Density Bonus Program with a permanent Program and outlines details; 3.Sets the Development Bonus Fee; and 4.Sets the amount of Bonus square footage granted for On- Site Affordable Housing. Background: Highlights of the Program

9. Downtown Density Bonus Program 8 PRIMARY ENTITLEMENT = The height and FAR entitlement that a parcel derives from its current zoning. BONUS AREA = The greater of (a) the floor area that exceeds the Primary Entitlement’s maximum FAR or (b) the floor area in the portion of the structure that exceeds the Primary Entitlement’s maximum height. DEVELOPMENT BONUS FEE = The fee to be paid to the City for each square foot of Bonus Area achieved under this program and set by Ordinance. Background: Key Terms

10. Downtown Density Bonus Program 9 Background: Key Terms What does it look like? Property zoned CBD: No height limit Primary entitlement DDBP (Administrative) Bonus Area Additional FAR allowed via DDBP

11. Downtown Density Bonus Program 10 1 Determine Eligibility and FAR/Height Max. DDBP Process 234 Meet Gatekeeper Requirements AH Community Benefits (min. 50% of Bonus Area) Provide Other Community Benefits (optional) Review DDBP Figure 2 of Ord. No. 20140227-054 Review Requirements of 25-2-586 (C) Calculate AH benefits Per 25-2-586 (E)(1) Per 25-2-586 (E) (1)-(11)

12. Downtown Density Bonus Program 11 Eligibility and Limits Parcels in some areas Downtown are not eligible to participate in the Density Bonus Program; Existing Downtown Overlays may further restrict FAR and height; and In those areas that are eligible to participate, the Program identifies maximum FAR and height that can be achieved administratively. 1

13. Downtown Density Bonus Program 12 Eligibility and Limits What does it look like? Property zoned CBD: No height limit 15:1 FAR Limit Only at Council’s discretion per 25-2-586(B)(6) DDBP (Administrative) Council action Primary entitlement 1

14. Downtown Density Bonus Program 13 1.Substantial Compliance with Urban Design Guidelines. 2.Commitment to construct Great Streets. 3.Commitment to achieve 2-Star Austin Energy Green Building rating. 2 Gatekeeper Requirements Per 25-2-586(C), these are mandatory and non-negotiable:

15. Downtown Density Bonus Program 14 A minimum of 50% of the bonus area must be achieved by providing affordable housing community benefits. Two types: 1.On-Site Affordable Housing Units 10 sq. ft. of bonus area for each 1 affordable sq. ft. Rental: 40 years @ 80% MFI Ownership: 99 years @120% MFI 2.Development Bonus Fee for Affordable Housing Set by ordinance and updated as necessary Projects can achieve 100% of desired Bonus Area by providing only Affordable Housing Community Benefits via on-site affordable units and/or paying the appropriate development bonus fee. Affordable Housing Requirements 3

16. Downtown Density Bonus Program 15 What does it look like? Property zoned CBD: No height limit 15:1 FAR Limit DDBP (Administrative) Primary entitlement Affordable Housing Requirements Primary entitlement: CBD: no height limit; 8:1 maximum FAR; DDBP Request: 15:1 FAR; Required Affordable Housing contribution: 50% of bonus area = [3.5 FAR (sq. ft.) x $5 per sq. ft.]; and Community Benefits: Additional 3.5 FAR (sq. ft.) can be met via Affordable Housing contributions or other community benefits as outlined in 25-2-586(E). 3

17. Downtown Density Bonus Program 16 Applies if the project seeks to achieve Bonus Area by providing benefits other than Affordable Housing Community Benefits (after having met the minimum 50% requirement). Process: Applicant identifies proposed Other Community Benefit and provides documentation (nature, cost, etc.) about it; Director (using criteria) determines whether the proposed benefit qualifies as a Community Benefit; and Director (using criteria) determines what portion of the cost should be attributed to the Community Benefit. Other Community Benefits W Hotel 4

18. Downtown Density Bonus Program 17 To date, three projects have successfully applied the DDBP and have been granted entitlements administratively and by Council action via the provisions of 25-2-586: Projects Under the DDBP Project Project Location Project Type Applicant Site Area (in sq. ft.) Primary Entitlement Bonus Area AH Fee to be Contributed Aspen Heights Apartments 8th & San Antonio MFAspen Heights13,3845:1 FAR120' ht up to 8:1 FAR 200' ht$816,400 5th & West * 718 W. 5 th Street MF Riverside Resources Investments II, Ltd. 16,6628:1 FARNo limit up to 20:1 FAR No limit$499,860 7th & Congress ** 619 & 621 Congress Ave. HotelFinley Company11,0408:1 FARNo limit Up to 25:1 FAR No limitN/A * 5 th & West will provide an additional $333,240 payment to the City for improvements along Lower Shoal Creek. * * 7 th & Congress is a proposed Hotel and per Ordinance, the Development Bonus Fee is currently set at $0. Note: Affordable Housing contributions are due prior to the issuance of a certificate of occupancy in accordance with 25-2-586(H). Total Affordable Housing contribution expected: $1,316,260; Additional public benefits: $333,240 for Lower Shoal Creek.

19. Downtown Density Bonus Program 18 Per Council action, on February 27, 2014, and per 25-2-586 Part 2, the Rainey St. sub-district of the waterfront overlay may participate in the Downtown Density Bonus Program beyond the allowable 8:1 FAR after successful completion of the Rainey St. DBP. Rainey St. DBP DDBP (Administrative) Rainey DBP Rainey entitlement Property zoned CBD: 40’ height limit Up to 8:1 FAR Projects that have met the Rainey St. DBP may chose to use the DDBP for FAR beyond 8:1. What does it look like?

20. Downtown Density Bonus Program 19 Current modifications to 25-2-739 (Rainey St. Subdistrict Regulations) include: Rainey St. DBP – 2014 Amendment Highlights 1.The on-site affordable units requirement was modified from 5% of the dwelling units to 5% of the square footage. [25-2-739(C)(4)(a)] 2.An affordability “term” was added to affordable units created under the program, mandating that they be maintained at affordable levels: 40 years for rental housing and 99 years for ownership housing. [25-2-739(C)(4)(b)] 3.The bedroom count mix for the on-site affordable units must now be proportional to the overall bedroom count mix within the overall development. (I.e., if the bedroom count ratio for the market rate units is 25% studio units, 40% one-bedroom units; 20% two-bedroom units, and 15% three-bedroom units, then the same bedroom count mix must be provided for the affordable units.) [25-2-739(C)(4)(e)]

21. Downtown Density Bonus Program 20 Rainey St. DBP Unit Mix Example DDBP (Administrative) Rainey DBP Up to 8:1 FAR An applicant proposes a 300-unit development in the Rainey St. District with the following unit breakdown: 100 Studio Units; 100 1-Bedroom Units; and 100 2-Bedroom Units; Then the applicant is required to provide 5% affordable units with the same overall mix as above per 25-2-739(C) : Five Studio Units; Five 1-Bedroom Units; and Five 2-Bedroom Units. For a total of 15 on-site affordable units.

22. Downtown Density Bonus Program 21 Pg. 21 Questions? Jorge E. Rousselin, Planning and Zoning Department – Urban Design (512) 974-2975 Jorge.rousselin@austintexas.govJorge.rousselin@austintexas.gov