The Rubik’s Cube: CodeNext, New Urbanism, and the Effects on Neighborhoods

Editor’s Note: In May, HPNA welcomed Jeff Jack, architect, member of CodeNext Citizens Advisory Group (CAG), chair of the Board of Adjustment, and ex-officio member of the Planning Commission. Jeff spoke about the CodeNext process and its potential threats to neighborhoods. Excerpts of his remarks appear below.

The CodeNext Background

Know what this is? It’s a Rubik’s Cube. The Rubik’s Cube is a good analogy for what we’ve been doing in the city of Austin for a long time. I was president of the Austin Neighborhoods Council when we started neighborhood planning. It was supposed to be a vehicle to address the conflict between neighborhoods, environmentalists, and the development community, where the community would come together and map out the future and get codified into a neighborhood plan. Then that neighborhood plan would be respected by the Council.

It didn’t work that way. After the first couple neighborhood plans were created, the staff began to take the process in a different direction. Staff’s intention was simple – new urbanism, density. What we’ve had over the last 20 years is a process where each turn of the Rubik’s Cube was lining up for an inevitable conclusion. That is going to play out in the last step of the process called CodeNext.

Imagine Austin was one of the steps in this process. We went through this great community gathering of people interested in shaping our city. Out of that came some recommendations, but a lot of the voices in the neighborhoods weren’t heard. Many felt that the staff already had a foregone conclusion of where they wanted the process the end. At the very last of the process, council members Tovo and Morrison put in page 207. Page 207 is critical for our neighborhoods because it said that the neighborhoods plans that had been created by the communities, codified by the vote of the council, would be respected in the CodeNext process. Well, maybe and maybe not.

When we started dealing with smart growth, in 2000, Kirk Watson had just become mayor and he brought with him all of the smart growth initiatives. He had about a dozen that he wanted to get implemented immediately. The Neighborhoods Council at the time said, wait a second. We’re doing neighborhood plans, we really shouldn’t be doing this as a one-size-fits-all in the city. So the only one that he got through was a secondary unit on a 7000-square-foot SF3 lot. All of the other infill options were made optional for the neighborhood planning process. It was essentially a zoning change, but staff’s legal department said no, it’s not a zoning change, so you didn’t have to get notified.

Forces Driving New Urbanism in Austin

The new urbanist idea has been around for a long time, but in Austin we have essentially five groups of people who support the idea. There are those people who like the urban lifestyle. They want a bar on every other corner and a coffee shop on the corners in between. Now I’m an old urbanist. When I lived in Denver, I lived downtown in a high rise, my office was in a high rise, I didn’t take a car, I rode the bus between, and I could walk to the neighborhood bar if I wanted to. But when I came to Austin I joined the Zilker Neighborhood Association. I realized neighborhood are more than just buildings, it’s the people who live in the neighborhoods that really count and define the neighborhood. If you start from that position, neighborhoods really need to be respected.

We also have people who believe in economics 101. You simply have supply and demand. All we have to do is increase the supply of housing in the city and the price of housing’s going to go down. The problem is, what we have done is encourage an in-migration of much wealthier people over the last 20 years, so instead of the demand curve simply moving out, it’s moved up.

One thing I’ve been advocating in the city of Austin for many years is to have a city economist. We’re a $3 billion a year corporation with no economic expertise on staff. When they want to prove something, they hire a consultant and tell him what they want him to do, and he gives them a report giving them what they want. We have nobody on the city staff who has the ability to do an analysis of any of the deals that we’ve made, any of the code changes that we’re proposing, to know whether they really work or not. It’s total resistance from city staff to have that expertise available, because they don’t know what the answer’s going to be.

Third group of people. There are environmentalists who believe that the automobile is the root sin of sprawl and if we can just get enough density in Austin, we can stop sprawling. Now I don’t know about you, but I know that capitalism doesn’t stop at the city limits. If you drive out 71, 290, 183, as soon as you get past the city limits you’re going to see development. The developers know they can go out there, buy the land cheaper, build the houses that people want, and make money. Sprawl’s not going to stop by densifying our neighborhoods. It’s just going to change the nature of the sprawl.

There are also people who are advocates for transit. They believe we have to dense pack the neighborhoods in order to have enough ridership in our neighborhoods to support rail. Those four are sort of the vanguard for the discussion about new urbanism, CodeNext, and density in our neighborhoods.

But you know what’s really driving it? Money. The development community, the homebuilders, the land speculators, the engineers, they’re salivating at Austin becoming a gold mine to be mined for our real estate. Because they understand that the lot that you own today is going to be worth a lot more if they tear down that house and build something else on it.

Zucker Report

One of the first things that we heard in pushing the new code was that the code is difficult, it’s expensive, and it’s time-consuming for the development community. We suggested that you look at the administrative, managerial, and procedural issues with the code that we have today and fix that first, then deal with the substantive issues. Staff would not do that. When they wrote the RFQ for CodeNext, they excluded that work totally.

A year after we’d started CodeNext, they hired a California consultant, Zucker Systems, to look at those issues. They came up with a 700 page indictment of the city staff. It’s taken the mask off of what the agenda was. But the city staff hasn’t embraced it. They’re trying to say, maybe the consultant didn’t have all the facts, but the fact of the matter is they don’t want to acknowledge that most of the claims by the development community about time and money for getting things permitted was really managerial in nature. It hid the real agenda of getting rid of the neighborhood protection parts of the code.

I think the Zucker report scared the city management. One of the things that’s happening in the CodeNext process is a shakeup in our staff. For the last two years we’ve dealt with staff members who basically pushed the new urbanist creed. We hired a new assistant director for planning and he has a little bit different perspective. He says that the new code should be based on the DNA of your neighborhood.

The CodeNext Process

Back in November I proposed a resolution that clarified that the CAG supported being able to replicate your neighborhood plan with a new code. The pushback was amazing. The staff said, this is all bad, and I said, wait a second, in Imagine Austin it says we’re going to be able to do this. Staff said, respect, it’s not the same thing as replicate. If you don’t think that “replicate” means what you want, what does “respect” mean? We can’t get answers.

CodeNext went through a couple things. One of the important ones is the community character analysis. But they didn’t take it very far. They didn’t show you what percentage of your lots was in different classifications. But they did give you a bunch of pictures showing this house or this little corner grocery store that you like, and they’re going to use that to justify future changes in the code that affect your neighborhood. Oh, you like that picture of that house with the big tree and the nice Victorian roof? By the way, it had a granny flat in the back, so you automatically like granny flats, don’t you? It’s called a visual preferencing survey and it’s very manipulative. Another part of the Rubik’s Cube.

One of the big disappointments is that they didn’t do anything really data-drive. This is Zilker (pointing to a map). Those color-coded districts are each different service areas for sewers. And this yellow area right here? The load is 1320 LUEs, living unit equivalents. The capacity is 1340. So if we were to put density in that area, somebody’s going to have to pay to increase that sewer capacity, from there practically all the way to Govalle. When asked about this in the Imagine Austin process, city staff said, we’ll deal with the cost of infrastructure later. It’s called a bond election.

We were also supposed to have some code talks because we understood that there were issues unresolved, like compatibility standards. What’s the relationship between residential property and commercial property? Right now our code says that commercial property will step back and step down adjacent to residential property so that there is not an adverse effect on the residential. That is a huge problem for commercial development. We had code talks, there’s no consensus, haven’t had another code talk since. So about three months ago the city staff came up with another bright idea called working groups – three working groups and they got to pick the topics. The CAG didn’t have any say about it.

One of the good things that’s come out of this is that they hired an innovation officer for the city of Austin, somebody who’s been in federal government, dealt with bureaucracies and trying to create new ways of doing things. She basically led the working group exercise. At the end everybody could agree on only the beginning questions. She called them, “How might we do something?” How might we respect deed restrictions? How might we assure that if we build units for affordability, they actually are affordable? A whole slew of questions like that didn’t get answers. The staff trotted out a bunch of best practices. They were doing this in San Diego, they were doing this in Eugene, and the problem is that they weren’t contextually the same as Austin.

Our entire city government budget is based on mainly property, sales, and franchise tax, unlike a lot of cities that have income from state income tax. So when you say that you’re going to do affordable housing in Oklahoma City by having a sales tax, does that work in Austin? Is the gap between income levels and cost of living the same in Oklahoma City as it is in Austin? Well, there’s no data. It was just thrown out there as, well, they’re doing it over there, why don’t we do it? So that came to a screeching halt and the “How might we?” questions are the only thing that got forwarded to Opticos, the consultants doing CodeNext.

In the fall of this year, they’re going to do some testing of the code ideas. They are going to pick four areas of town. We asked to see the RFQ about this testing. They won’t show it to us, because I understand what they’re going to do: They’ll give you a dog-and-pony show about how wonderful it’s going to be if we do it this way. My suggestion is that we take a neighborhood that has an adopted neighborhood plan with a core transit corridor through it and really test it. Will the character of this neighborhood be the same if we adopt all of these infill tools? That’s the kind of question I’m hoping that the core exercises charrettes are going to address. If we don’t do it, my resolution goes back on the table. We’re not going to let the last piece of the Rubik’s Cube fall into place and end up with a picture we don’t want.

Missing Middle Housing & Effects of Entitlements

The consultants and the city staff said we don’t have enough missing middle housing to accommodate our growth. In most neighborhoods, you want to have a variety of housing, but where do you do it? If you look at some of the examples of form based code that have been adopted in other cities, they come in and say, in this transect, we’re going to allow these different types of housing units and we’re going to put them in your neighborhood somewhere. It doesn’t mean that people are going to bulldoze your houses immediately, but it does change the entitlements. In time the investment community is going to buy up those properties at the value of housing and tear them down and build something denser.

When you do that, what happens with your evaluations of your property? I have a site next to me. Guy bought a house for $800 thousand, tore it down, built six units, each one is priced at $600 thousand to $1 million. My property taxes went up $58 thousand. When TCAD looks at the sales price of the properties around you, they put that into the pool of comparables and it raises everybody’s property taxes. Increasing tax is directly related to increasing entitlements.

If you look at the city of Austin, how much land area do we have in the city full purpose, when we look at our ETJ, our extra territorial jurisdiction? The amount of land area in neighborhoods with neighborhood plans, what percentage all total do you think it is? 17%. So 83% of the opportunity to accommodate growth is outside of our planning areas. We’re focusing all of this attention to densify these urban core neighborhoods when we’re paying almost no attention to all of that 83% of land area that we control that is out there beyond us. I rail about this at the Planning Commission every time we have to approve a low density large lot subdivision at the edge of town in one case and in the next case we’re trying to push entitlements to densify an urban core neighborhood.

Deed Restrictions & HOAs

We’ve been asking the city since the beginning of neighborhood planning to do an analysis of deed restrictions in these planning areas. It does us no good as a community to put neighbor against neighbor by not acknowledging deed restrictions. If you live in a subdivision that says you’re not going to have a second story unit and you build a 2-story ADU, you get sued if you have a strong enough neighborhood association or HOA. In the South Austin Combined Neighborhood Plan, for the first time, the city staff looked at deed restrictions in one part of the neighborhood and the infill options that were in conflict with the deed restrictions were taken out of the plan. So we have a precedent. If you look at most of our older neighborhoods we’re going to find out that the deed restrictions are pretty extensive.

We have a new city council because there’s little trust in this community in our city staff. Those council members are going to be faced with a huge problem because a lot of the neighborhood plans are in essentially four of the ten council districts. Don Zimmerman doesn’t have any neighborhood plans in his entire district but he’s got a lot of HOAs that have deed restrictions. The other council members all have to understand that some of the pushing they feel, they’re going to have to push back and say, wait a second, my neighborhood doesn’t allow that.

Conclusion

It’s not all bleak. We do have a new city council. I think that we do have to engage them, make them understand our issues. And hopefully they’re not tied as previous councils have been to the development community, and maybe we’ll get some traction out of this and we’ll get a new code that actually works for the community.