Planning commission approves staff recommendations on Smart Housing LDC amendments, urges longer affordability and tenant protections

The Austin Planning Commission on Tuesday approved staff-recommended amendments to the city’s Smart Housing Land Development Code (LDC) provisions and added two formal recommendations for staff consideration on longer-term changes.

Brendan Kennedy, program manager with the City of Austin Housing Department, presented Phase 2 amendments that staff described as administrative and consistency updates to the Smart Housing program — the city’s voluntary affordable housing incentive program that primarily offers fee waivers and expedited permit review in exchange for affordable units.

The commission’s action sends the staff recommendation forward with two additional, unanimously approved directions: that staff consider increasing the minimum affordability period (40 years for rental; 99 years for ownership) in a subsequent review and that staff evaluate applying the requirements of Chapter 4-18 (rental and ownership housing development assistance) and associated lease-addendum protections to Smart Housing participants as part of a later phase.

Kennedy told commissioners Smart Housing has long been paired with other local, state and federal tools and that staff are proposing modest, mostly administrative changes now while preparing for a broader program review later. “Smart Housing is the city's oldest voluntary affordable housing incentive program,” Kennedy said, describing fee waivers, permit-review benefits and certification thresholds that can affect applicants’ eligibility for other city funding.

Key elements of the staff proposal that commissioners considered included: - Moving recorded land-affordability restrictions to an earlier point in the application process (front end) to increase transparency and consistency with other programs. - Removing a 2007 exemption for community land trusts (CLTs) that staff said has been administratively infeasible and rarely used by established CLTs in Austin. - Changing the program’s rental minimum from 80% of area median income (AMI) to 60% AMI with income averaging allowed, to align Smart Housing with other city programs and commonly used low-income housing tax credit practices. - Removing outdated cross-references and exemptions (for example, a vertical mixed-use exemption and language superseded by UNO and downtown density-bonus code changes).

During the commission’s roundtable, commissioners asked for examples and data tying Smart Housing outcomes to longer affordability periods. Kennedy said recent program data show the large majority of projects use additional tools that yield deeper or longer affordability on the ground; he reported that roughly 94% of Smart Housing applications in the past five years achieved deeper affordability levels when combined with other programs. Kennedy also cautioned that the staff-presented amendments are intentionally limited in scope because the initiating council resolution focused primarily on fee-waiver clarity and minor administrative fixes.

Chair Azhar moved two formal, non-binding recommendations for staff consideration as part of future “Phase 3” work: increasing the program’s affordability period to align with other city programs (40 years for rental, 99 years for ownership) and evaluating whether Smart Housing participants should be required to meet Chapter 4-18 rental/ownership assistance requirements and the associated lease addendum. Both motions were seconded and passed unanimously.

Commissioners also asked for clarification about departmental coordination when a Smart Housing certification is issued. Kennedy explained that Smart Housing certifications typically precede permitting so that the project files and subsequent permit reviews are clearly identified as Smart Housing cases and routed to reviewers across departments.

The commission approved the staff recommendation (motion by Vice Chair Woods; second by Commissioner Hiller) with the two added recommendations and closed the public hearing on the item. No members of the public spoke at the hearing on the amendment; an unrelated public commenter earlier in the meeting raised concerns about a proposed project at 1900 San Gabriel.

The commission’s votes on the item and the accompanying non-binding recommendations were unanimous among commissioners present. The actions taken are advisory to council and to staff; any changes to the city code would require a future council ordinance.

The commission’s staff packet and a late-backup memo were referenced during the discussion; Kennedy said staff plan a larger program evaluation and will return with recommendations if additional changes are warranted.

The Planning Commission moved on to two staff briefings following this item.