Item 2 SB 840 Impacts Presentation — original pdf

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SB 840 Codes and Ordinances Joint Committee September 24, 2025 Agenda SB 840 Overview Impacts of SB 840 Next Steps SB 840 Overview SB 840 Summary  Allows by-right mixed-use or multifamily in all zoning districts that allow non-residential uses (excluding zones with heavy industrial).  Sets minimum standards for height, density, and maximum setbacks for multifamily and mixed-use developments in commercial zones.  Exempts residential conversions of existing commercial or office buildings from impact fees and other city requirements.  Effective Date: September 1, 2025. SB 840 Applicability: Residential By Right  Allows residential by-right on any property where mixed-use, office, commercial, retail, or warehouse uses are currently allowed in the zoning district.  Does not apply to: – Zones that allow a heavy industrial use – Properties within 1,000 ft. of a heavy industrial use or development site or within 3,000 ft. of an airport or military base – An area designated by a city as “a clear zone or accident potential zone” SB 840 Applicability: Residential By Right (cont.)  Residential is allowed by right in the following zoning districts in Austin: – All office base zones: – Neighborhood Office (NO), Limited Office (LO), General Office (GO) – All commercial base zones: – Community Recreation (CR), Neighborhood Commercial (LR), Community Commercial (GR), Lake Commercial (L), Central Business District (CBD), Downtown Mixed-Use (DMU), Warehouse/Limited Office (W/LO), Commercial Services (CS), Commercial Highway (CH) – Special purpose base zones: – Agriculture (AG), Planned Unit Development (PUDs)* – Industrial base zones: – Research & Development (R&D)* – Regulating plans: – Lamar/Justin, Plaza Saltillo, MLK, East Riverside Corridor, North Burnet/Gateway Regulating Plans *Applicable to properties with PUD and R&D zoning that allow commercial uses & prohibit heavy industrial uses SB 840 Applicability: New Minimum Entitlements  Bill sets new minimum entitlements for “mixed-use residential” and “multifamily residential” development, for sites where SB 840 applies. – Mixed-Use Residential = any site in which the residential uses are at least 65% of the development’s total square footage. – Multifamily Residential = any site for 3 or more dwelling units within one or more buildings. New Minimum Entitlements Under SB 840  Density: – Cities must allow the greater of 36 units per acre or the highest residential density currently allowed in the city. This is 54 units per acre in Austin. – Cannot restrict floor-area-ratio (FAR)  Height: – Cities must allow the greater of 45 feet or the height that currently applies to a non-residential use on the same site.  Setbacks: – Cities must allow the lesser of 25 feet or the setback that currently applies to a non-residential use on the same site. Impacts of SB 840 General Impacts to Density Bonus Programs  Density bonuses that do not allow additional height, such as VMU, are likely no longer viable.  Density bonuses that allow additional height, such as DB90, DBETOD, ERC, TOD, and NBG, may be less attractive than what’s available by right for developments, post-SB 840 – Viability likely varies by location or other factors, such as higher construction cost per sq. ft. for podium construction.  Affordability Unlocked projects may have to compete with market- rate developers on more properties, potentially leading to higher land costs for subsidized affordable housing developments. SB 840 Impacts for Tiered Citywide DBs / DBETOD  Council initiated changes on June 5 to create new tiered density bonus programs and revise the existing VMU and DB90.  Goals from the resolution included direction to: – Look at additional types of community benefits – Analyze requirement for partial or full replacement of existing affordable units  Staff will analyze the new development reality post-SB 840 to understand whether bonus programs could “pencil” with the same, fewer, or more benefits than are required today. Downtown Density Bonus (DDB)  Produces highest density/heights and the most affordable housing fees-in-lieu in the City.  CBD and DMU zoning today: – CBD zoning has no height limit but has FAR limit of 8:1. – DMU zoning has height limit of 120’ and FAR limit of 5:1.  DDB allows for developments to go above their base entitlements. – In general, DDB can increase CBD and DMU sites: – Up to 25:1 FAR – Up to unlimited height Downtown Density Bonus (DDB)  SB 840 Impacts on DDB: – Removes FAR limits for developments with residential – Allows CBD sites unlimited height (lack of max. height in CBD) & unlimited FAR – Allows DMU zoning to develop to 120’ tall with unlimited FAR – Greatly reduces the incentive for parcels zoned CBD to participate in DDB – Loss of affordable housing fees-in-lieu and “Great Streets” participation  Potential Regulatory Revisions to Consider: – Add height limit to CBD consistent with 8:1 FAR Additional Impacts of SB 840  Impacts on legacy commercial districts and regulation of active uses  Airport Overlay impacts  FLUMs and Neighborhood Plan Amendments  Waterfront Overlay For updates, an information sheet, and information on potential amendments, visit SpeakUpAustin.org/LDCUpdates Next Steps Next Steps for Density Bonus Programs  Update Land Development Code to establish a Central Business District base height & update Downtown Density Bonus to incorporate CBD height limit  Develop staff proposals for new citywide tiered density bonus system that accounts for SB 840 impacts  Evaluate other types of incentives for affordable housing, beyond density bonus programs  Identify additional changes and amend Land Development Code as needed Thank You