Austin city planners are revising downtown development rules following the implementation of Senate Bill 840, a state law that prohibits cities from limiting floor-to-area ratios (FAR) for residential projects. This legislation, which took effect in September, removes Austin’s ability to use FAR caps to manage the size and density of new buildings in the Central Business District.
Previously, Austin required developers seeking additional height or density to participate in the Downtown Density Bonus Program. This program allowed greater building size in exchange for public benefits, such as affordable housing units or contributions to housing funds.
With FAR limits no longer enforceable, city officials believe the existing density bonus system could lose its effectiveness unless new restrictions are introduced. “We have to put in a height limit to make the Downtown Density Bonus Program continue to work,” said city planner Alan Pani during a Planning Commission meeting.
City staff have suggested a 350-foot height cap for Central Business District developments, requiring any taller projects to enter the density bonus program. However, the Planning Commission has recommended increasing this cap to 700 feet for downtown’s core and the Rainey Street area. The commission argues this change would provide developers with more flexibility and prevent hindering growth. The City Council will make the final decision.
“I don’t want to see us miss out on additional density, more riders for transit, more tax revenue and more neighbors,” Commissioner Danielle Skidmore said.
Austin’s skyline already features several buildings above these proposed thresholds. Only three towers exceed 700 feet: Waterline at 1,021 feet, Sixth and Guadalupe at 875 feet, and The Republic at 710 feet. Since 2017, the median project height has been over 350 feet, and last year’s average was just above 500 feet, according to city data.
Developers support taller buildings due to limited land availability downtown. Urbanspace CEO Kevin Burns stated that vertical construction is most efficient for towers slightly above 600 feet but noted that “going taller gets expensive fast,” citing increased costs for materials and safety systems.
City officials aim to develop new rules that maintain incentives for downtown development while complying with state law.
