An increasing number of cities are using density bonuses as a way to incentivize the production of affordable housing. In exchange for including some number of affordable units in the new project, affordable density bonuses allow developers to build larger buildings than zoning would otherwise permit. However, improperly calibrated density bonuses can lead to less overall or affordable housing production than otherwise would have occurred.
As part of a complete overhaul of the City of Austin’s zoning code, ECONorthwest analyzed how the City could most effectively use density bonuses to create affordable housing. The project team used MapCraft Labs to design and calibrate targeted density bonuses in more than 120 new zones across the city. The Lab analyzed the financial feasibility of more than 300 building prototypes, including small-scale residential (accessory dwellings units, plexes), multifamily, and commercial developments. ECONorthwest also analyzed appropriate fee in-lieu payments for off-site affordable housing.