Austin city planners are adjusting development rules for downtown after a new Texas law removed local authority to regulate density. Senate Bill 840, which became effective in September, prohibits cities from setting floor-to-area ratio (FAR) limits on residential projects. This change disrupts Austin’s previous method of managing growth in the Central Business District.
Previously, Austin required developers to participate in the Downtown Density Bonus Program if they wanted to exceed FAR caps. In exchange for greater height and density, developers provided public benefits such as affordable housing or contributions to housing funds. With the state’s removal of FAR restrictions, city planners are concerned that the density program may lose its effectiveness unless new height limits 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 projects, with taller buildings needing approval through the density bonus program. However, the Planning Commission has recommended increasing this limit to 700 feet for projects located in downtown’s core and the Rainey Street area. The commission believes this would provide developers with more flexibility and help sustain growth.
“I don’t want to see us miss out on additional density, more riders for transit, more tax revenue and more neighbors,” said Commissioner Danielle Skidmore.
Currently, only three towers in Austin surpass 700 feet: Waterline at 1,021 feet, Meta’s Sixth and Guadalupe at 875 feet, and The Republic at 710 feet. The median height of buildings constructed since 2017 exceeds 350 feet, with last year’s average just over 500 feet according to city data.
Developers argue that taller buildings are both necessary and efficient due to limited land availability. Kevin Burns, CEO of Urbanspace, stated that vertical construction is favored for “optimal efficiency” at heights slightly above 600 feet but noted that “going taller gets expensive fast,” referencing increased costs for materials and systems such as elevators and fire suppression.
City officials are working to establish a new framework that maintains incentives for downtown density while complying with state law.
