The Downtown Commission voted Oct. 15 to forward a recommendation to City Council opposing the currently proposed downtown density bonus amendment and to pursue an alternative that removes floor‑area‑ratio (FAR) and height caps in exchange for a dedicated, recurring share of incremental property tax revenue for the city’s affordable housing trust fund.

The commission’s action followed two staff briefings on State Bill 8 40 and a narrowly targeted code amendment to add a base height limit in the Central Business District (CBD). Commissioners heard a public comment from Matthew (Matt) Geske, vice president of public affairs for the Downtown Austin Alliance, who asked the commission to delay the Council vote for 120 days to allow “time to conduct a financial analysis and modeling to test the full impacts of the proposed amendment.”

City and planning staff told the commission SB 8 40, which “went into effect on September 1,” allows by‑right mixed‑use and multifamily development in many commercial zones and prevents the city from regulating FAR for qualifying residential or mixed‑use projects. Alan Pani, principal planner with Austin Planning, and Alan Pappe presented analysis showing SB 8 40 establishes minimum residential entitlements (the greater of 36 dwelling units per acre or the highest residential density already allowed, in Austin’s case 54 units per acre), sets a floor on required allowed height (the greater of 45 feet or the site’s existing nonresidential height), and limits setbacks to the lesser of 25 feet or the current nonresidential setback.

Staff described how those changes reduce the distinctiveness and attractiveness of voluntary downtown density bonuses that previously required added community benefits in exchange for additional FAR or height. Pappe said the downtown density bonus historically produced the city’s “highest density and heights” and the greatest fees‑in‑lieu for affordable housing; with FAR limits removed for qualifying projects, staff said CBD parcels could have effectively unlimited FAR, which in turn would reduce participation in the bonus program and could shrink the fee revenue used for affordable housing and public realm improvements.

To respond, planning staff proposed amending City Code Title 25 to establish a CBD base height of 350 feet by right and to revise the downtown density bonus text and Rainey Street subdistrict mapping so the program could continue to function with a clear baseline. Pappe explained staff selected 350 feet as a practical baseline after analyzing the “median” equivalent height for the former 8:1 FAR (the median was about 207 feet and the average about 233 feet) and to “account for the fact that parking is not included in the 8 to 1 FAR.” He said developers could still seek council approval to exceed the 350‑foot base height through the downtown density bonus program.

Commissioners pressed staff on the economic tradeoffs. Commissioner David Carroll questioned why staff proposed 350 feet when the 8:1 FAR height equivalent is closer to 200 feet, warning that raising the by‑right height could “leave a lot of money on the table that will not go into that affordable housing trust fund.” Pappe said staff had not done a full analysis comparing tax‑base increases from taller buildings to fee‑in‑lieu revenue and that the 350‑foot figure attempted to avoid “downzoning in essence” while reflecting trends toward taller buildings in downtown.

Staff opposed a 120‑day delay requested by the Downtown Austin Alliance. Pappe said a long delay would be impractical and risk losing participation in downtown density‑bonus projects and associated Great Streets improvements while staff work on a more comprehensive downtown and central‑city rewrite planned for 2026.

The commission’s final recommendation—moved and seconded on the record, amended during debate to reference the Downtown Density Bonus Program and the Land Development Code, and further amended to specify that any dedicated revenue should be used by the affordable housing trust fund or “a similar entity charged with actually building affordable housing”—passed by vote. Commissioners framed the recommendation as a preference for creating a recurring, stable funding stream for affordable housing (incremental property tax revenue) rather than relying solely on one‑time fees‑in‑lieu tied to optional density bonuses.

Staff next steps listed in the presentation include updating the Land Development Code to establish a CBD base height, updating downtown density bonus materials (including the Rainey Street subdistrict), and preparing a central‑city district plan and a comprehensive downtown density bonus update during 2026. Staff also said they will continue to study other incentives for affordable housing beyond the density bonus mechanism.

Votes at a glance

- Approval of minutes from prior meeting — Motion by Commissioner Pibito; second Commissioner Levinson; outcome: approved.
- Recommendation to City Council on downtown density bonus / CBD base height — Motion moved by Commissioner Shifford; seconded by Commissioner Buick; motion amended on the floor to reference the Downtown Density Bonus Program and the Land Development Code and to require that directed revenue be used by the affordable housing trust fund or a similar entity charged with building affordable housing; outcome: approved (vote recorded as “motion carries” in meeting minutes).
- Approval of 2026 commission schedule — Motion moved and seconded; outcome: approved.

Speakers (attributed in article)

- Matthew (Matt) Geske — Vice President, Public Affairs, Downtown Austin Alliance (nonprofit stakeholder)
- Alan Pani — Principal Planner, Austin Planning (city staff)
- Alan Pappe — Austin Planning (presenter on CBD amendment)
- Commissioner David Carroll — Downtown Commission (government)
- Commissioner Kimberly Levinson — Downtown Commission (government)
- Commissioner Sonya Shifford — Downtown Commission (government)
- Commissioner (last name) Buick — Downtown Commission (government)
- Commissioner Philip Wiley — Downtown Commission (government)

Authorities

- statute: "State Bill 8 40 (referred to in the meeting as 'SB 8 40')" — referenced_by: ["staff presentation on SB 8 40","public comment by Matt Geske"]
- policy/regulation: "City Code Title 25, Land Development" — referenced_by: ["staff proposal to establish CBD base height"]

Clarifying details

- Proposed CBD base height: 350 feet by right (staff proposal).
- Historical CBD FAR: previously regulated as 8:1 FAR for many sites; staff analysis showed 8:1 FAR equivalent median height ≈ 207 feet and average ≈ 233 feet for projects that used the downtown density bonus.
- State bill entitlements (as presented): greater of 36 units/acre or highest residential density currently allowed (Austin example: 54 units/acre), required by‑right height minimum of 45 feet or current nonresidential height on the site, and setbacks limited to the lesser of 25 feet or current nonresidential setback.
- Council date referenced by staff for the amendment: Oct. 23 (staff said they hope to be at Council on Oct. 23).

Community relevance

- Geographies: Downtown Austin, Central Business District, Rainey Street subdistrict, central city.
- Impact groups: downtown residents and tenants, developers, property owners, affordable‑housing beneficiaries.

Meeting context

- Engagement level: substantial staff presentation; multiple commissioners questioned staff; one public commenter spoke; the commission spent extended time debating policy framing and a formal recommendation to City Council (multiple motions and floor amendments).
- Implementation risk: medium — staff emphasized the need for further code updates, central city plan work, and Council action; outcomes depend on Council decision and on more detailed fiscal modeling.

Searchable_tags: ["SB840","downtown","CBD","density bonus","affordable housing","Land Development Code","Austin"]

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