Austin Contrarian

East Riverside Corridor Master Plan

City Council is scheduled to vote today on the East Riverside Corridor Master Plan.  Let's hope Council ignores the Planning Commission.

The Plan envisions the redevelopment of East Riverside as a New Urbanist corridor, built around four major transit hubs.  The hope, of course, is that the "transit" will someday be a light rail line connecting downtown and the airport.  But East Riverside is a natural place for redevelopment of this kind, with or without rail.  East Riverside is close to downtown.  It is already fairly dense yet (paradoxically) has many low-density or undeveloped tracts suitable for redevelopment.  There is proven market demand, as demonstrated by the redevelopment underway on the western end.  While there are single family neighborhoods along the route, there are fewer than along, say, Burnett or Lamar.  And, finally, the existing development consists largely of decaying strip malls; everyone (including area residents) would like to see a better use of the land.  

The Plan basically proposes four types of districts.  "Corridor Mixed Use" (brown in the map below) would contain the major retail and office and provide the highest density.  "Neighborhood Mixed use" would contain less intensive commercial and retail while the "Urban Residential" and "Neighborhood Residential" districts would provide multi-family (exclusively) and single-family housing.

 

 For this to work, the Plan must allow a critical mass of density.  Rail won't have a chance to succeed without lots of people within walking distance of each stop.  And property owners will need an incentive to demolish income-generating (if unglamorous) strip malls.  A plan is not worth anything if no one builds anything.

The planners recognized this.  The solid ovals above represent a five-minute walk from the projected rail stops.  The planners generally filled the ovals with the densest district.

But this is a master plan -- a conceptual plan -- rather than a regulating plan, which would contain all the nitty-gritty regulations.  The plan does not specify the allowable density in the base districts.  It contemplates that districts will retain the existing height limitations, but anticipates a density bonus program that would allow greater height in exchange for "community benefits."   It leaves the details of the density bonus program for the regulating plan.

The plan likewise leaves (or left) the issue of compatibility for the regulating plan.  A single-family home in Austin imposes height restrictions on all properties within 540 feet.  A building can be no taller than 30 feet if it is within 50 feet of the single-family property line.  The height limit rises to 40 feet at 100 feet from the property line; 60 feet at 300 feet from the property line; and 120 feet at 540 feet from the property line.  Most districts have a base zoning height of 60 feet.  A property in one of these districts cannot develop to its full height unless the nearest single-family home is at least a football field away.  

Although East Riverside has fewer single-family homes than other transit corridors, it still has a few subdivisions, including one abutting the western transit hub.  The Plan does not purport to resolve compatibility.  The planners acknowledged that some type of compatibility regulation will be necessary, but did not endorse the existing standards.  It left for the regulating plan the difficult task of negotiating a compromise that leaves neighboring homeowners satisfied while allowing  enough density to keep this from being a merely academic exercise.  That was to be a conversation for another day.

But the Planning Commission concluded that there really is no reason to have that conversation at all.  It approved the plan, but only after insisting on an amendment that would retain all existing compatibility standards.   As this map presented by staff at Council's last briefing shows, insisting on rigid compliance with existing compatibility standards would gut three of the four proposed transit hubs: 

This graphic understates the damage, I think.  Much of the property shaded orange would be held to 30- or 40-foot height limits, which is too short to make mixed-use feasible.  And although each of the transit hubs has plenty of white -- unregulated -- space, the orange and yellow are concentrated on East Riverside itself.  It is silly to believe that we will see walkable, mixed-use neighborhoods spring up around these transit hubs if we hold development on East Riverside itself to 30- or 40-feet.

The Planning Commission in this case actively undercut the planning process.  It should have given a simple "aye," recognizing that compatibility is something that must be worked out in the future by the consultants, staff, neighbors and property owners.  Instead, it has tried to take compatibility off the table completely, to eliminate any flexibility.   And if that dooms the plan?  Shrug, I guess.

Update:  Last night, City Council approved the Master Plan without the Planning Commission's amendments.

A contrary view on density bonuses

Frequent (if involuntary) guest-poster Miggy responds to my criticism of density bonuses.  (Let this be a lesson to those who leave long comments.)

I, too, have a lot of misgivings on this policy, and yet, while I would agree that this is a marginal tax, so is the ad-hoc system….the unwritten rules that you mention here. Preference therefore cannot be given to the status quo on that basis alone. As you suggest, one way to compare the two systems is by the relative ‘bite’ – have past developments paid more for increased entitlements than they would under this proposal? The monetary value is not an easy comparison to make in most cases, but my layman’s research would indicate that some have paid less but some have definitely paid more and that’s without other factors such as attorney costs for taking it through the exception process or the value reflected back in sales prices from the investment. If this is indeed the case, it also raises a question of equitable treatment – why should one project pay more tax than another on that last square foot based simply on the political winds or the political stroke of their lawyers? We do not leave it to people to hire attorneys to individually negotiate their property, sales or income tax bill on an ad-hoc basis because we punted on creating a systemic, equitable approach to revenue generation. There’s an argument to be made, too, that this situation is not terribly unique – there is a marginal benefit of income, sales, capital gains and the improved value of real property. “Sin taxes” or levies on marginal negatives are great for behavioral modification but also unreliable for public funding which is why they make up relatively little of the overall revenue pie at any level of government.

I cannot speak to anyone else’s motives, but my best supposition for why the development community is objecting to these rules is not necessarily for the cost of what’s proposed. As you say, is not that onerous or, on average, dramatically different than the cost of the status quo… but there is a threat of the unknown. In other words, a failure to object at this juncture will increase the risk of more onerous fees being institutionalized. There is also a very real potential threat of tweaking ROMA’s proposal in the political process to where it definitively falls in the bad policy column.

I would further concur with your assessment that the arguments against the policy that use utility infrastructure costs are a red herring and are likely being used as a mask for other motives. Those infrastructure costs are significant and I realize that they’re paid for in real dollars not relative ones, but a long-term plan should not be bogged down by such obvious short-sightedness.

Bringing this back on topic – I personally believe that the current proposal is an improvement on both the status quo and the interim density bonus (which sends money to a city-wide affordable housing slush fund rather than having the same flexibility to reinvest in the project or immediate area of downtown).  Now…that being said, the proposal is also far from ideal. Density is a necessary component to a vibrant and valuable downtown, but it is also an insufficient quality on its own. While it’s tempting to simply say that the laws should be loosed and no restrictions be placed on a marginal positive, that’s also taking away an important point of leverage for achieving those other qualities that make for a successful downtown. That little bit of leverage is important in a state, that, as I am frequently reminded, has taken away a lot of sticks and leaves municipalities only to dangle their few remaining carrots.

It should be pointed out, too, that not all ‘community benefits’ are budget patches or crutches for poor general fund support from the city that could be made up by the taxable value of the new building. TDRs from the Warehouse district are not possible under an ad-hoc system and other benefits, such as green building or the burying of parking garages, are strictly the preserve of the private developer where incentives need to be in place to move projects in that direction at the time of construction. Moreover, what remains largely un-discussed are the market and construction variables at play and why ‘the sweetspot’ square footage for development is where it is (where density bonuses likely play a minor role). An ideal policy would seek to mitigate those variable costs or market limitations and move that sweetspot higher, but I’ve never heard that approach discussed seriously. There is only the assumption that the developer demand for greater density is insatiable (when we have a lot of empirical evidence of underbuilding and not a lot of empirical evidence of burj dubai’s passing on Austin because of its density bonus program).

In an attempt to wrap up this rambling comment on this wide-ranging topic, let me say that I look forward to hearing the completion of your thoughts on this. From your post here your argument would seem to condemn both the status quo and the density bonus proposal but it leaves open to suggestion what regime could replace both. I mean this more in an inquisitive than a challenging way, but: what is your proposal? What is the third way? Feel free to be ambitious and perhaps make it applicable to TODs / future town center nodes… but keep in mind that a proposal that is great urban planning but so audacious as to be politically DOA is also of little use. Again, I look forward to hearing your ideas on this topic…and thank you, as always, for raising important questions on public policy in Austin. 

I'll respond in a separate entry.

Taxing density

I've owed a comment on this for a while.

ROMA, the outfit charged with developing a plan for downtown Austin, has proposed a density bonus ordinance for downtown residential development (available here).   Austin's had a temporary density bonus program since 2007.  ROMA is proposing to make that program permanent.

All things considered, it is not a particularly onerous proposal.   ROMA would allow commercial and hotel developments an automatic bonus if they comply with "gatekeeper" requirements, which mainly means complying with the city's urban design guidelines and submitting a detailed site plan for review and approval.   ROMA and its economics consultant concluded that the market for office and hotel space will not support a density bonus program.

The big change is for residential.   Residential properties seeking an increase from the district's base zoning must not only comply with the gatekeeper requirements but also must pay a bonus on the extra square footage.   Half the bonus must be satisfied by providing on-site affordable housing or an in-lieu fee of $10/sf.   The other half must be satisfied by providing a "community benefit," chosen from a menu of public space (fine), music venues (dumb), daycare or senior-care (dumber), or "family-friendly," three-bedroom apartments (dumbest).

The "temporary" density bonus scheme retained CURE zoning, a tool for obtaining additional square footage by providing ad hoc benefits, subject to city approval.   Some have criticized that exception as an ad hoc loophole for allowing developers to "get away" with providing merely nominal community benefits.

ROMA claims the new scheme will benefit even developers/property owners by providing certainty.  But my understanding is that every increase in entitlements since 2007 has been obtained through the CURE exception.   There is already a predictable way to get more entitlements, in other words, but developers and property owners have opted for ad hoc. This hardly supports ROMA's claim.  No, the evidence is that the bonuses have bite.

I was befuddled by the initial density bonus plan and I'm befuddled now.

A density bonus is a tax on marginal increases in density.  Don't be confused by the rhetoric.   It is a tax.  The plan raises the cost of that last square foot.   The claim that it does not raise the price because no one is entitled to an increase in density is a bit of misdirection.   The fact is that the city has an unwritten policy allowing increases in base square footage.   A property owner who wants more square footage can reasonably expect to get it for the payment of a nominal amount.   And it is expectations that determine property values, not the words written in the code.   Raising that cost -- frustrating those expectations -- reduces the incentive to build that last square foot.

The density bonus program is a bad idea because extra space downtown is an unmitigated good.   We shouldn't tax economic goods; we should tax economic bads.

More space means room for more people.  And more is better, at least for downtown.   More people means more demand for downtown businesses, a livelier streetscape, more eyes on the street.   We should encourage the clustering of people downtown.  Density bonuses shunt people elsewhere.

Density is downtown's reason for being.   That's why businesses and residents pay a premium to be there.  Agglomerations are valuable.   While they sometimes generate negative externalities, they do not downtown.  Downtown is not a desirable place despite the crowding together of people; it is a desirable place because of the crowding together of people and businesses.   Residents like being close to other people and to downtown establishments.  Downtown businesses like being close to other businesses.   That's why law firms, advertising agencies, government workers, accounting firms and others cluster downtown despite the cost.

Then there's the fiscal benefit.   Every extra square foot of downtown space generates gobs of revenue for the city.   Another square foot, valued at $400, generates $10 per year in extra taxes -- twice the proposed density surcharge.  And that's an annual payment.   If we use the city's cost of money as the discount rate, the present value of that square foot to the city, county and school district is $200 or so.   Why risk that for a one-time payment of $5?

That extra square foot imposes no cost on the city.   Adding twenty residents to a 200-resident project imposes no extra burden on our schools.  Nor on the fire department.   Nor on our streets or utilities.   By contrast, without the extra space, these twenty residents will need twenty homes in the 'burbs (or displace twenty other central Austin households who will land in the 'burbs), with the new infrastructure necessary to support them.

I've heard the argument that all the new downtown development will require the city to make massive upgrades in downtown infrastructure.  That's an argument for another day.  But we're concerned here with the impact of a marginal resident.  How much will that last resident cost the city in addition to the investments it must make anyway? Anyone who blames that last resident (or ten or hundred) for new infrastructure investments is engaging in hand-waiving, not evidence-based argument.

And then there's the argument that the new condos are making downtown less affordable.  What people really mean is that the new condos are not adding to the supply of affordable housing.  They are expensive (relative to the city's MFI) but that does not imply that they are raising the cost of the existing stock of affordable housing.  I suppose they are reducing the relative share of the existing stock of affordable housing (and there is some older, affordable stuff downtown).  But many central Austin neighborhoods have little affordable housing.  No one is pushing to require property owners in Pemberton Heights or Tarrytown to pony up money for affordable housing.  Many of these property owners have seen a windfall of hundreds of thousands of dollars from the run-up in property values during the last decade.  I'm not suggesting that we tax those windfalls, but it makes no sense to saddle downtown properties with the responsibility of providing affordable housing while letting relatively wealthy central Austin homeowners -- the main beneficiaries of central Austin's pricey real estate -- off the hook.   

Council is scheduled to consider the density bonus program at its next meeting.  The Planning Commission at its last meeting recommended deferring a decision for more study.  I suspect that the members who pushed for it are not worried that the plan is too onerous; they want to make it more onerous and need time to generate more public opposition to the plan.

I've heard some Council members are growing skeptical of the plan, for just the reasons laid out here.  Here's hoping they do the right thing.

The historic landmark tax dodge

While scanning today's City Council agenda, I was struck by the number of applications for historic landmark designation.  Twenty-five of the 93 agenda items, to be exact.

According to City code, the purpose of a historic landmark designation "is to protect, enhance, and preserve individual structures or sites that are of architectural, historical, archaeological, or cultural significance."  It is not a synonym for "old."  And it shouldn't be:  the owners of historic landmarks get generous tax breaks.   A historic designation, in other words, is a straight cash transaction; the owners get cash, we taxpayers get preservation.  So we should try to get our money's worth.  That ought to mean, at a minum, that we give two snaps about the structure we are paying to preserve.

Most of these don't rate one snap.  Here is a sampling of the items on today's shopping list:

For $10,325 in annual tax abatements, we are buying the preservation of Pemberton Heights' ca. 1938 "Lolla Peterson House."  (Step one in any landmark designation application is to name the house.)   The staff report gives this summary of its reason for recommending historic landmark status:

The house is a good example of a Tudor Revival-syle stone cottage and is associated with Lolla Paterson, who headed the Travis County Welfare Department for many years, and was known for her kindness and treatment of the needy. 

Mind you, the historic structure was not actually built for Ms. Peterson; she did not move in until 1957.

For $11,777, we are buying the preservation of Old West Austin's "Sutton-Bailey House."   This 1938 house "is an excellent example of severe Colonial Revival architecture" and is associated with William S. Sutton, a leader in the field of education and Dean of the College of Education at UT.  Mr. Sutton, unfortunately, died before the historic structure he imbued with significance could be built, but it was occupied by his wife and daughter ten years after he died.   Sort of a "one degree of separation" test of historic significance.

For $5,359 in annual tax abatements, we are buying the preservation of the ca. 1924 home of Madison Benson, a "pioneer automobile dealer in Austin."  The home was also "associated" with Godfrey Flury, who was responsible for the painted interior of St. Mary's Catholic Church in Praha (wherever that is) and who then established an "outdoor advertising business in Austin" (i.e., billboards).   (Like Ms. Peterson, Mr. Flury never actually lived in the house; his widow bought the house 10 years after he died.)

Come on.  Who will get a special tingle from viewing the home of  the proprietor of Austin's first cash-only building materials business ($34,772 in annual tax abatements).  Or the home of an oilman whose wife was "prominent in Austin social circles" and a charter member of the Junior League (and whose historically significant home was built in 1947) ($28,381 per annum).  Or the home of the proprietor of one of the city's "leading women's clothing stores" ($17,841) or of prominent  clothing store owners who were leaders in the city's Jewish community ($15,058) or of  a "prominent insurance man" ($12,627).

Staff recommended the historic landmark designation in each of these cases.  I'm frankly surprised they could do it with a straight face.  I'm surprised at the Planning Commission and Council's willing complicity.   The only significance of most of these homes is that they lie in tony Pemberton Heights or Old Enfield and in many cases are appraised at well over $1 million.   The historic landmark ordinance has somehow been contorted into a tax-break scheme for the members of Austin's upper middle class smart enough to work the system.   Who can blame them for asking?  But I don't see why those of us relegated to less prestigious neighborhoods should stand for it.

You can access the staff reports from the City Council agenda page. They are items 60-84.

Using asphalt more efficiently

Most mornings on my way into work, I stop at Coffee Bean & Tea Leaf on South Lamar, a new coffee shop between Riverside and Barton Springs, one door down from Bridges on the Park.  (The building used to be a soccer store.)

If you are looking for an example of how code mandates too much parking, here you go.

According to Travis County tax records, Coffee Bean & Tea Leaf occupies an 8,861 sf building.   City code requires restaurants to have 1 parking spot for every 100 sf for the first 2,500 sf, and 1 spot for every 75 sf over that.   This means that CBTL, had it built on a suburban greenfield, would have needed 30 parking spots to comply with code. 

It has 13.

And -- surprise! -- thirteen is enough most of the time.   Most mornings there is at least one  empty spot to the side of the shop.   Some mornings there is not, but even then I manage to get my coffee.   I park on Lee Barton Drive.  Or I park in the Taco Bell parking lot next door -- which is no big deal since Taco Bell lets CBTL use its parking lot before 10 a.m.  I doubt CBTL loses any business because it is "short" 17 parking spots.

I'm not sure how CBTL got away with fewer than code requires.  Perhaps it got a variance.  It sits on a narrow lot and could not have added another 17 spots without tearing down the building.  Perhaps the number of parking spots were grandfathered.

Regardless, CBTL illustrates how our code requires too much parking.

It illustrates another point, too.  Businesses want their customers to have a place to park.  Sometimes they might prefer to provide another 2,000 sf of asphalt.  Sometimes, though, they might prefer to find space elsewhere that is not being used.  The asphalt on Lee Barton Drive, rather than lying  empty, is now being used productively.  Taco Bell's asphalt, rather than lying empty before lunch time, is now being used more productively.  CBTL avoided pouring a bunch of concrete that would have lain empty 23 out of every 24 hours.   Each square foot of asphalt provides more value now than before.  And that's all because CBTL was allowed to figure out an informal solution to its "shortage" of parking.  

If there, why not everywhere?

Parking math

One of the things I enjoyed about The High Cost of Free Parking was the way Shoup explains the practical effects of parking requirements.   For example, requiring one parking space per X square feet is equivalent to setting a cap on building coverage.

Take Austin.  For most retail, it requires one parking spot per 250 sf.   According to Shoup, a parking space requires a minimum of 325 sf  (and I've been told by some architects that the minimum is actually higher).   Austin's parking requirement is thus equivalent to mandating 1.18 sf of asphalt for every one square foot of building.   It ensures that building coverage will always be less than 50% of the lot.   Much less when one counts front setbacks and a 25' rear, no-parking setback when single-family homes are close by.  Although retail zoning districts theoretically allow a 1.0 floor-to-area ratio, the parking requirement ensures that the floor-to-area ratio will always be much less than that.  And so we get buildings relegated to the rear of lots, segregated from sidewalks by a swath of parking.

Most ridiculous are the parking requirements for cocktail lounges.   The ordinance requires one space per 100 sf for the first 2,500 sf, one space per 50 sf for the next 7,500, and one per 25 sf for anything over that.   Hence, a 5,000 sf bar must be surrounded by nearly 25,000 sf of parking.  

Another way of putting the city's parking requirement for cocktail lounges:  "Sure, you build a bar, but only if you guarantee each patron that he can drive there for free."

Super Duper Neighborhood Objectors and Appealers Organization

A reader has pointed me to this registered neighborhood organization.  (Go to the city registry and scroll down to Super Duper).  The organization's "main contact"  identifies himself as the "Great and Powerful Oz."  The "organization's" declared boundary includes virtually all of Austin and much of its extra-territorial jurisdiction.  

Anyone in Austin can form and register a "neighborhood organization" and define its boundaries as arbitrarily as he pleases.   The Great and Powerful Oz figured this out and evidently is enjoying a little joke.

Except this joke is costing the rest of us.  City code entitles "interested parties" to notice of public hearings before the city can act, and registered neighborhood organizations are "interested parties" when the property falls within their boundaries.   This applies not only to Council hearings, but to boards and commission hearings, such as the Board of Adjustment and the Planning Commission.

Notice is expensive.  City staff must print and mail a separate notice for each hearing.  There can be  dozens of hearings per week -- zoning changes, variances, site plan approvals, subdivision approvals, and a host of others.  And the Super Duper Neighborhood Objectors and Appealers Organization is entitled to written, mailed notice of each and every one.  (If you doubt SDNOAO is entitled to notice, go to the city's GIS, pull up the zoning map, check the circle next to "neighborhood association," and click "identify" on any point on the map.)  

The Great and Powerful Oz might object that lots of other organizations get free notice of citywide hearings (e.g., ANC, the Homebuilders Association of Greater Austin, the Homeless Neighborhood Organization.)  If they can ask for free notice, why not me?

Rather than attempt to distinguish between "legitimate" and "nonsense" organizations, the City should simply charge notice recipients a fee.  I'm sure that applicants are entitled to free notice.  Nearby property owners may have a good argument for free notice as well.  But everyone else should monitor the city's posted notices  like the rest of us, particularly since the typical organization cares about only a small fraction of the hearings.  If they want premium service, they should pay for it.

Update:  Karl-Thomas Musselman identifies the Great and Powerful Oz as 1993 Special Election City Council candidate Bill Gammon.  (The registry lists Oz as William Gammon without further ID.)

Grayco

Sorry for the light posting, but I've been on a beach for the past few days without computer internet access.   I'll try to catch up.

First up is the fight over the Grayco project on East Riverside, which Council is scheduled to consider today.  Although the Grayco property is nearly 400 feet from Lady Bird Lake at its closest point, it still sits within the Waterfront Overlay.  The developer has proposed a PUD allowing 1,200 units.  It is asking for an exception to the overlay's height limit to build to 90 feet rather than the 60 feet allowed by the Overlay. 

View Grayco in a larger map

Save Town Lake, predictably, opposes the exemption.  The Statesman and Shilli have full coverage, which I won't rehash here.  

But this argument needs rebutting:   

[O]pponents say the project would set a troublesome precedent for development along the lake, where the new city rules would limit building heights on part of the Grayco site to 60 feet.

Tom Cooke, chairman of Save Town Lake, which was created several years ago to protect the lakefront against intense development, said the project would set a "dangerous precedent" for developers to circumvent the rules by seeking approval for their projects on a "case-by-case basis" as planned unit developments.

"The message needs to be clear to the development community that the community has made themselves very clear" in favor of ordinances protecting the waterfront, Cooke said.

We can debate whether the Grayco project provides enough community benefit.  We can debate whether the  Grayco design passes muster.  But Cooke's argument is a bit of misdirection.  When Council passed the ordinance on June 11, it debated whether to exempt PUDs from the height limits.  Save Town Lake pushed hard to hold PUDs to the height limits.  Council ultimately made PUDs subject to the ordinance, but explicitly provided that "[t]his does not limit a PUD's ability to modify the Waterfront Overlay exemption."  In other words, Council decided then to allow exemptions for PUDs on a "case-by-case basis."  Save Town Lake lost that one.

The debate over the Grayco project should focus on whether it is good enough for an exception.  But stating that  the Grayco project would establish a "dangerous precedent" for case-by-case exceptions is misleading when Council has already resolved to allow case-by-case exceptions.

Here's a strategy for preserving the Warehouse District

I’ve seen only two serious proposals for preserving the Warehouse District.   Neither, it seems to me, has much chance of working.<

Both involve preserving the entire district (the precise boundary of which has yet to be defined).   The first strategy is to designate the district as a historic district, which would give the property owners tax abatements but no other compensation.   The second is preserve district properties but compensate property owners with transferable development rights.  These would be credits for additional floor-to-area ratio (FAR) that could be sold to developers elsewhere to increase their entitlements.

But I think the property owners would bitterly resist both.   Neither provides enough compensation to make them happy.  Transferable development rights would have little value because FAR is not particularly scarce downtown.   Because approving a district over the property owners’ objection would require a super-majority vote on Council, neither is likely to happen.

But I think there might be a way for the city could do this on the cheap without any contentious public hearings.

The individual lots in the Warehouse District are too small to redevelop unless they are assembled into larger lots because you can’t get much density with just a partial block.   Because the blocks in this district are so short (only 300’ or so), a developer would probably have to assemble most or all of a half-block.   If the city were to purchase conservation easements from strategically located property owners — in the middle of the blocks, say — it could forestall the assembly of large parcels and thus the possibility of redevelopment.

At first blush, this might seem an expensive strategy.  Property owners would demand a premium to sell a conservation easement on their lots.  After all, if a developer were to approach them to assemble a large tract, they would demand a premium — which the developer would have to pay because it would need every lot on the block.

But a conservation easement would be different.  The city would only need one or two per block. Once it bought one easement, the redevelopment premium for the other properties would vanish.

Suppose the city were to approach three owners of centrally-located lots.   It could offer the following deal:   “We will buy one, and only one, conservation easement.  We will compensate you with tax abatements and no more than $_________ in cash.   Let the (open, multi-round) bidding begin.”

And property owners should bid down the price.   Getting cash and a permanent tax abatement in exchange for continuing business as usual is a pretty sweet deal.  But even if a property owner wanted to hold out for a redevelopment premium someday, he’d have to worry about his neighbor.   If his neighbor took the deal, then the property owner would lose forever any chance of a redevelopment premium and the cash and tax abatements.   No, he’d be better off trying to underbid his neighbor.

Open, multi-round bidding would drive down the cost of the conservation easement.  In fact, I’m not sure there’s an equilibrium price above zero.

Note this strategy would not require any rezoning, special districts or even public hearing, other than authorization and approval of the purchase.

Perhaps the property owners could collude to avoid being pitted against one another.  A high initial offer might cause one to break ranks, though.

If this strategy succeeded, I’d still offer all of the property owners tax abatements in exchange for agreeing to a historic district.  The city shouldn’t be too prickish.

An infill developer's perspective

I do not have any firsthand experience with the development or permitting process in Austin.   Frequent commenter "Don Johnson," a local infill developer, does.   He left the following comment in response to my entry on Austin's gerrymandered zoning districts.  I think an infill developer's perspective on the development process in Austin is interesting, so I repost it here.

If I may take this opportunity to vent a little more about our subdivision process here in Austin and why central urban infill is so difficult.  The owner of Red Bird is in store for much more than this zoning fight.  Even if they are granted SF3 they can look forward to a subdivision process where they dump about $20k fee-in-lieu of water quality controls and detention if they can't get a waiver.  They will need to hire an engineer.  It boggles my mind that Austin Code currently expects residential lots to make room for detention ponds and water quality controls and how high the fees are to bypass this.  Imagine your residential street actually lined with big pits in every front yard like you see outside of commercial properties.  Not to mention the argument that this piecemeal approach to detention can actually have negative effects on downstream flow.  "Regional" detention and WQ seems more rational; i.e., build a larger facility to serve the neighborhood as a whole (which allows for a more macro design approach).

Then you have the ten subdivision reviewers who seemingly have conflicting goals in what they want to commandeer or impose on the applicant.  You have the ROW reviewer wanting to commandeer 10' of property at the frontage, the transportation reviewer wanting you to build sidewalks to nowhere, the electric reviewer wanting to commandeer another 10' in easements, and heaven forbid you have any trees because you can't build near them or cut them down (although the electric company may cut it down after you try to save it).  Then throw building set back requirements, impervious cover limits, and the McMansion envelope on top of everything.  Your clean palate dwindles down to an unworkable anomaly in the end and hence some of the weird $400k houses around town with single car carports and terrible layouts.  I won’t even go into some of the funny catch-22 scenarios that come up between reviewers leaving the applicant to sort it out in order to move forward.

What you end up with is really difficult use of space, and you are in it for about $20k to $30k in city fees and related expenses as well as 6 months minimum in holding costs before you even start really.  Or maybe you are in for more than that if you were smart enough to include an architect in the process so that you can start heading off the design problems early.  All this for something with such subtle impact as taking a 20,000sf lot and cutting it in half to build two duplexes instead of one (and really with the same exact limits of construction pre and post subdivision, just with an extra two residents).

You would also be amazed at how many lots the city considers "illegal".  Go look at any TCAD plat map and look around for "tildes" that bring portions of lots together.  Or when the lot legal description reads as part of two lots (Examle: W25ft of lot 24 and E25ft of lot 23.)  This would be filed under the "landmine" comment [in this entry -- AC] as well.  This can take you down many an unexpected road due to grandfathering scenarios, and notification issues that are built into code, as well as more carrying costs as it gets sorted out.  I won't get into it, but beware.  Trust me.

It sure is fun I'll tell you what.   The sad part is that by the time you actually start concentrating on the house design and construction, you have used up about 60% of your juice (energy and emotion), and really you need everything you’ve got in construction.

People not involved in this stuff will brush all of this off and paint builders/developers as greedy for complaining, but I'm telling you it is almost impossible to get from old stock to newer up to code stock in a streamlined affordable manner because of our system in Austin.  All the while the neighbors are nipping at your heels on top of this.  And this is why you see trees go down on Saturday.  The builders would love to stay off trees (they add value), but every other code seemingly begs you to cut down trees.  That is simply one negative manifestation, though.