Made popular by the nonprofit affordable housing developer Foundation Communities, micro-unit housing has been permitted in Austin for years due to the city’s relatively small minimum unit size requirement. In 2014, the city council amended the municipal zoning code to further reduce regulatory costs and barriers to smaller units, as well as to impose affordability requirements. These changes were prompted by developer concerns about density and parking restrictions, and by the city’s interest in increasing the affordable housing supply in downtown Austin and attracting more single adults to the city center.
The micro-unit code amendment reduces the parking and density requirements for dwelling units of 500 square feet or less if they meet the city’s affordability requirements. For owner-occupied units, developers are required to reserve 10 percent of units as affordable for households earning 80 percent of area median income (AMI), for no less than 99 years. For rental units, developers must reserve 10 percent of units as affordable for households earning 50 percent of AMI, for no less than 40 years. Developments that meet these requirements receive relief from zoning regulations; the minimum site area, which dictates allowed density for developments, is reduced to zero, while the minimum parking requirement is reduced to a ratio of .25 spaces per unit. Additionally, parking is required to be leased separately from the unit to allow for greater affordability and flexibility.
Two micro-unit developments have been permitted in the city since 2014. Capital Studios in downtown Austin will offer 135 micro-apartments with 100 percent of the units made affordable to individuals earning 50 percent of AMI. A more recent development of 260 micro-unit apartments, the first to be developed without public financial assistance, is set to be complete in 2016. While most units will be rented at market rate, 25 percent will be reserved as affordable to individuals earning 50 to 70 percent of AMI.
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City of Austin Development Services Department
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