Per Bloomberg Media; As Gentrification Sweeps Austin, Texas Zoning Reform Remain Elusive

 

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Housing

Desperate for Housing, Austin, Texas seeks Relief in Rezoning

The booming Texas capital’s efforts to revise its land development code and build more affordable housing have been thwarted by protests from homeowners. 

Megan Kimble

April 29, 2022, 10:38 AM CDT

Kemp Street runs along a bluff in a quiet residential neighborhood in southeast Austin called Montopolis. On the west side of the street, the backyards of a dozen single-family homes look over a lush nature preserve and, beyond, a stunning view of downtown Austin, the sightline extending miles away to the pink dome of the Texas State Capitol.“We just want to stay in our homes,” says Frances Acuña, the lead plaintiff in the lawsuit. She lives in a predominantly Hispanic neighborhood called Dove Springs, about five miles southwest of Montopolis. Her street used to be full of families, with children playing outside and cumbia music wafting across yards at night, she says. Now, many of those low-income families have left, moving farther from the city where housing is more affordable. She saw the city’s plans for her neighborhood, which included upzoning some lots along Pleasant Valley Road, a busy north-south corridor, and balked. “If they’re planning to take our homes so they could do development, what’s going to happen to us?”

But the gentrification that transformed Acuña’s neighborhood — the development pressure that the homeowners on Kemp were trying to resist — happened under Austin’s existing zoning code, says João Paulo Connolly, co-director for housing and community development at the Austin Justice Coalition. “All of the displacement that took place in Austin took place under the current code, which the lawsuit protects,” Connolly says. 

The right to protest zoning changes is as old as zoning itself. In 1922, under Secretary Herbert Hoover, the Department of Commerce issued the Standard State Zoning Enabling Act, a model statute that gave states the power “to regulate and restrict” certain land uses and building types. Recognizing that zoning would need to change as cities did, the act laid out a process for local governments to make updates — and hear public feedback on those updates. If owners of “20 per cent or more either of the area of the lots included in such a proposed change, or of those immediately adjacent” opposed the zoning change, “such amendment shall not become effective except by the favorable vote of three-fourths of all members of the legislative body of such municipality.” Requiring a three-fourths vote in the event of opposition to change, a revised edition stated in a footnote, “has tended to stabilize the ordinance.”

Many states, including Texas, adopted this act into law essentially verbatim. In 1927, the same year the Texas legislature legalized comprehensive zoning, it also passed a law that gave “towns and cities the right to withhold building permits to such firms or individuals as seek to build houses for negro inhabitants in white communities.” The law was ruled unconstitutional, but it enabled the creation of Austin’s 1928 comprehensive plan, which divided the city by race and created a “Negro district” in East Austin. 

A former Freedman’s Town, today Montopolis is a low-income, majority-Hispanic neighborhood on the front lines of the city’s rapid gentrification: Home prices have skyrocketed across Austin, nearly tripling since 2011 and hitting a median of $624,000 in March — a 40% increase from two years prior. Median rents have also increased by 40% in the same time period, according to Redfin data. 

In Montopolis, two-bedroom houses valued at $200,000 are being listed for twice that; stark new modernist homes tower over older ranch homes nearby. In the summer of 2020, lawyers representing a developer submitted a rezoning request for 508 Kemp Street, a 2.16-acre parcel of land fronted by a single-story, limestone brick home. When the rezoning case came before Austin City Council, the developer proposed building 33 condominiums on the site, 17 of which would be developed by Austin Habitat for Humanity and sold starting at $140,000 to low-income families. 

Nearby residents opposed the project, filing more than a dozen petitions against the rezoning. Together, the opponents represented 31% of the land within 200 feet of the property, triggering a state law that would require Austin City Council to pass any rezoning with a three-fourths majority rather than a simple two-thirds majority. Perhaps reading the writing on the wall — namely, that city council did not have the nine votes to pass the rezoning — the development company withdrew its request. Three days later, a two-bedroom house across the street was listed for $785,000. 

The home on 508 Kemp Street in the Montopolis neighborhood of East Austin.

Photographer: Jordan Vonderhaar/Bloomberg

“Nobody won here,” said Austin City Council member Natasha Harper-Madison, who represents a historically Black neighborhood in East Austin, in response. “There’s only so much land to go around. The rarer buildable land becomes, as our city grows, the more expensive that land and subsequently housing will be. Zoning laws that make it illegal to construct new homes, to accommodate more neighbors on smaller lots, contributes to both climate-destructive sprawl and gentrification … At what point do we say, do we want housing or don’t we?”

That’s a question echoing in cities across the country that are increasingly desperate to build more places for people to live. In states like Texas, homeowners can successfully block new housing construction in their neighborhoods because of century-old statutes that give them the right to protest individual zoning changes. According to a 2022 report from the Mercatus Center at George Mason University, 20 states have laws that enable protest petitions. 

As land use regulations throttled new housing within city limits, Austin’s boom has been defined by a surge of sprawl.

To encourage more multi-family housing development, local governments have lately focused their energies on updating laws governing land use citywide rather than parcel by parcel, lifting restrictions that have long limited development to single-family homes — a process known as upzoning. Several cities, led by Minneapolis in 2018, have eliminated single-family zoning in the hopes of increasing housing supply. 

Austin’s zoning code hasn’t been updated since 1984, when the city was less than half its current population. In 2012, the city launched an effort to revise these rules, with a goal of creating a more “compact and connected city,” but the process, dubbed CodeNEXT, met fierce resistance and consumed nearly a decade and more than $10 million. As land use regulations throttled new housing within city limits, Austin’s boom has been defined by a surge of sprawl: Between 2001 and 2019, Travis County added 71 square miles of new development.

In 2020, with the city council on the verge of finally approving a new code, a district judge sided with a group of homeowners who had sued the city, saying it had denied them the right to protest zoning changes that affected their properties. The City of Austin maintained those rights didn’t apply in a comprehensive zoning update, which impacted every property owner in the city, and appealed the ruling. This March, an appellate court in Houston upheld the lower court’s decision, saying that the city had violated state law by failing to notify property owners across the city of proposed changes and offering them the opportunity to protest those changes. 

“If you’re going to do a fundamental change and there’s lots of protests because people don’t like fundamental changes, then you’ve got to have a three-quarters majority vote,” says attorney Doug Becker, who represented the homeowners. He says his clients felt like the city was trying to “drastically change the nature of their neighborhoods,” without their input. “Many of them who have been zoned [in] low-density areas suddenly were at risk of apartments and condominium complexes,” he says. 

Just as on Kemp Street, many homeowners involved in the lawsuit believed that development in their neighborhoods would bring displacement.

“We just want to stay in our homes,” says Frances Acuña, the lead plaintiff in the lawsuit. She lives in a predominantly Hispanic neighborhood called Dove Springs, about five miles southwest of Montopolis. Her street used to be full of families, with children playing outside and cumbia music wafting across yards at night, she says. Now, many of those low-income families have left, moving farther from the city where housing is more affordable. She saw the city’s plans for her neighborhood, which included upzoning some lots along Pleasant Valley Road, a busy north-south corridor, and balked. “If they’re planning to take our homes so they could do development, what’s going to happen to us?”

But the gentrification that transformed Acuña’s neighborhood — the development pressure that the homeowners on Kemp were trying to resist — happened under Austin’s existing zoning code, says João Paulo Connolly, co-director for housing and community development at the Austin Justice Coalition. “All of the displacement that took place in Austin took place under the current code, which the lawsuit protects,” Connolly says. 

The right to protest zoning changes is as old as zoning itself. In 1922, under Secretary Herbert Hoover, the Department of Commerce issued the Standard State Zoning Enabling Act, a model statute that gave states the power “to regulate and restrict” certain land uses and building types. Recognizing that zoning would need to change as cities did, the act laid out a process for local governments to make updates — and hear public feedback on those updates. If owners of “20 per cent or more either of the area of the lots included in such a proposed change, or of those immediately adjacent” opposed the zoning change, “such amendment shall not become effective except by the favorable vote of three-fourths of all members of the legislative body of such municipality.” Requiring a three-fourths vote in the event of opposition to change, a revised edition stated in a footnote, “has tended to stabilize the ordinance.”

Many states, including Texas, adopted this act into law essentially verbatim. In 1927, the same year the Texas legislature legalized comprehensive zoning, it also passed a law that gave “towns and cities the right to withhold building permits to such firms or individuals as seek to build houses for negro inhabitants in white communities.” The law was ruled unconstitutional, but it enabled the creation of Austin’s 1928 comprehensive plan, which divided the city by race and created a “Negro district” in East Austin. 

Austin’s current city council doesn’t appear to have the appetite to appeal the court’s ruling to the Texas Supreme Court. Instead, housing advocates are looking to council elections in November and, improbably, to the Texas state legislature, which will convene again in 2023. In March, Texas House Speaker Dade Phelan’s list of initial priorities for the next session included a directive to the committee on land and resource management to “study the effect of governmental land-use regulations and controls on the availability and affordability of residential housing in Texas.” 

Zoning reform has the potential for bipartisan appeal, says Dan Keshet, the co-founder and president of Texans for Housing, a statewide advocacy group. “Texas is a property rights state. Far and away the most aggressive intrusion into property rights is zoning,” Keshet says. “What is zoning if not a central government coming in and telling every person in the city what they can do with their own house, what they can do with their own property?”

Meanwhile, the house at 508 Kemp Street sits unchanged in the spring of 2022, bluebonnets sprouting around its perimeter. Earlier this year, the property’s new owner submitted a site plan as part of its request to subdivide the parcel, with sketches showing 11 units of new housing spread across seven lots. Across the street, a three-bedroom home from the same developer was listed for sale for just over $1 million.