Fast Lane: Invoking Mass-Transit Grant, City Accelerates HOME Development Code Changes

Rainey Street towers above a Willow Street home in Austin, Texas.
(Credit: Andrew Wheat/ Austin Free Press) Rainey Street towers above a Willow Street home. Owner Eva Zitz-Evancih says she wonders when the towers will cross I-35 into her neighborhood.

The City of Austin is speeding through its controversial overhaul of Austin’s land-use rules–a process that can take years to complete–to meet a June 6 deadline for a federal grant that it is seeking for the city’s mass-transit plan: Project Connect. The city and CapMetro hope that the requested federal funds will cover as much as half of the $7.1 billion Project Connect.

City officials point out that Federal Transit Administration grant applications score higher when proposed transit routes align with high-density urban development. For this reason, the city says it must speed up approval of the land-use changes that it now calls its Home Options for Mobility and Equity” (HOME).

At a recorded Austin Planning Commission meeting on April 23 city staff said that major land-use revisions to allow denser urban construction must be sent to City Council by May 16 to advance a city application seeking federal funds for Project Connect. May 16 now is the date when City Council members plan to vote on the second phase of the HOME package. To make its federal-funding request more competitive, city officials must finalize all proposed land-use revisions by June 6, which they called “pencils-down” day.

At the April 23 meeting, several planning commissioners questioned what Commissioner Grayson Cox called HOME’s newly “truncated schedule.” Commissioner Cox, appointed by District 10 Council Member Alison Alter, said, “I feel like for small neighborhood parks, we do more public engagement and participation” than we did for this massive overhaul of development rules.

City Planning Director Laura Middleton-Pratt responded in the meeting that a Federal Transit Administration (FTA) grant application has accelerated things. “A large portion of what’s driving the timeline is the FTA grant,” Middleton-Pratt said. 

In coupling HOME to the transit-grant deadline, the city binds together two of its biggest and most controversial initiatives, even as it accelerates and compresses the time allotted for residents and city officials to vet and revise them. What’s at stake is expansive. The HOME upzoning proposal would reduce minimum lot sizes and increase urban density. It also includes measures governing electric vehicle charging, compatibility standards such as height restrictions near single-family homes, and an Equitable Transit-Oriented Development overlay. That tool would promote dense development along the first phase of Project Connect. 

Project Connect is a huge mass-transit expansion that voters first approved in 2020. As these two massive initiatives converge, the city has recast the HOME acronym, which previously stood for “Home Options for Middle Income Empowerment,” to instead refer to Home Options for Mobility and Equity. The city passed earlier HOME revisions last December. 

Responding to an Austin Free Press inquiry, Commissioner Cox wrote via email there is a mismatch between the time allotted to the latest HOME revisions and their long-term impacts. The revisions represent “some of the most impactful regulatory changes Austin has made in over four decades.

“I understand and support our efforts to secure grant dollars to help build out Project Connect, but the Austinites directly impacted by significant changes to development entitlements and compatibility deserve the time to understand and engage in how their city and neighborhoods are regulated and developed.”

In a city squeezed by acute affordable housing and displacement crises, some people echo Commissioner Cox’s argument that the city should vet its land-use overhaul carefully and deliberately, especially its likely impacts on Blacks, Indigenous and people of color. 

Citing the same affordability crisis, HOME supporters contend that there is no time to waste. Advocates argue that the proposed changes would increase density, construction and housing inventories, driving down housing and rental prices. They point to HOME’s new land-use rules that permit housing to be built on smaller lots in single-family-zoned neighborhoods. In central Austin’s soaring housing market, the dirt under many homes is worth more than the structure above. Reducing lot and home sizes can cut building costs.

Critics counter that the market-based HOME initiative would promote construction of higher-end housing beyond the reach of average Latino and African American residents. They say HOME doesn’t protect the most-vulnerable Austin residents and is likely to accelerate displacement. The protracted debate pits those who emphasize increasing housing supply against those focused on limiting gentrification for the lower-income people being priced out of Austin.

Austin-based Texans for Reasonable Solutions is an enthusiastic HOME supporter. “Thankfully we don’t have to guess whether policies like HOME 1 and HOME 2 will work,” its spokesperson, Elizabeth Markowitz, wrote in an email to Austin Free Press. “We can look at other jurisdictions that relaxed their zoning laws and minimum lot size requirements and see their results.”

Bolstering her position, Markowitz pointed to studies from the White House and the nonpartisan Pew Research Center in Washington, D.C. The White House paper finds that tighter zoning restrictions “lower housing construction,” keeping prices high, whereas easing zoning restrictions increases housing supply and reduces costs. 

The 2023 Pew Research study of zoning changes in Houston found that reducing minimum lot sizes significantly increased the “availability of moderately priced family-sized homes.” The study found that those policies did not displace the city’s Black and Hispanic residents,” whose populations increased. 

The Pew study noted that Houston’s zoning changes included a provision that Austin’s plan lacks. To minimize opposition from residents, Houston “included an opt-out process that enables residents to exempt their block from the new rules.” Block votes allow homeowners to incorporate as special districts in which “land-use regulations are determined not by citywide ordinance but by the characteristics of existing lots in the area.”

Given Austin’s wealth gaps, HOME critics–including many tied to neighborhood groups–question the idea that Austin can build its way to affordable housing for all. They argue that HOME will repeat history by benefiting whiter, wealthier residents at the expense of lower-income people and communities of color. Median income for Austin’s white households was $101,445 in 2022. By contrast, it was $66,207 for Latino households and $68,636 for Black households.

Sol Praxis is a member of Community Powered ATX, which organizes renters and the unhoused around affordability issues. Praxis said that “from day one” her organization has asked the city to protect lower-income residents from displacement by attaching “equity-overlay” provisions to HOME. These policies seek to cushion neighborhoods already undergoing rampant displacement from the potential effects of increased upzoning. The city should have created “an equity overlay long ago, even before we asked for it,” she said. Although the Planning Commission has incorporated a couple of equity overlays, it remains to be seen if the City Council will adopt them in its final version of HOME.

If the city insists on fast tracking HOME to pursue federal transit funding, then Praxis said that “the least they can do is to delay the implementation dates of all of these policies … until after an equity or anti-displacement overlay is in place.”

Misael Ramos, board president of Blackland Community Development Corp., an affordable housing nonprofit in East Austin.

Misael Ramos is board president of Blackland Community Development Corp., an affordable housing nonprofit in East Austin’s Blackland neighborhood. “This should have been an actual community driven, community led, and community collaborative effort,” Ramos said in an interview. He said that the city’s expediting of HOME shows that it was just paying lip service to community equity concerns.

On this point Ramos is not completely at odds with Pew housing policy director Alex Horowitz, who co-authored the Pew report. “Research suggests that it’s more affluent residents who have an outsized impact when input is gathered” on government projects, Horowitz told Austin Free Press via Zoom. He emphasized the importance of listening carefully to the community before overhauling zoning and planning rules. “That’s really more inclusive and more efficient than gathering input every time an apartment building is proposed,” Horowitz said.

While advocating community involvement, Horowitz insists that increasing housing inventory is the best way to reduce rental costs. When “occupancy rates get above 95 percent, that’s a landlord’s market,” Horowitz said. “When you get occupancy rates down to the low 90s, that’s more of a tenant’s market. … The more housing that’s coming online, then that puts tenants in a stronger position to negotiate.” 

HOME critics tout their own academic studies. As an urban geography professor at the University of Texas at Austin, Rich Heyman prepared a study for the city’s Equity Office that questions if cities in red-hot markets can build their way to affordability. 

“Evidence does not support the argument that loosening land use regulations across Austin will produce more affordable housing, especially for the bottom half of the income spectrum,” Heyman wrote in a recent summary of his findings in the Austin Chronicle. “Increasing the supply of new housing may slightly lessen price increases for higher-income residents, but it is very unlikely, in the current context, to help the rest of us … in a high-demand, high-growth city like Austin.”

Heyman told the Austin Free Press in an interview that market forces and deregulation can only do so much when population grows so rapidly. “These density bonus programs are really only marginally effective,” he said. “They just produce such a small number of units.” Heyman argued that Austin may fall short of Houston’s successes because Houston did more to protect vulnerable communities. 

Austin residents still can weigh in on the proposed new land-use ordinance at the May 16 meeting at City Hall.

Editor’s Note:

Rich Heyman’s Free Press interview on May 6 may be one of his last as a University of Texas professor. The Texas Department of Public Safety charged Heyman with a misdemeanor on May 8, alleging that a cussing Heyman grabbed a trooper’s bicycle at a pro-Palestinian campus protest on April 29. Heyman’s attorney told the Austin American-Statesman that his client grabbed the bike to avoid falling after an officer pushed Heyman. The University of Texas fired Heyman in response to the charges.

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