Development Incentives and Agreements
The City of Austin may provide developers with incentives—such as fee waivers, density bonuses, tax incentives, and development agreements—to build and to set aside affordable rental and ownership housing for low- and moderate-income households in developments.
The City of Austin SMART Housing program provides fee waivers for development permits in exchange for onsite income-restricted units.
- Learn about SMART Housing
The S.M.A.R.T. (Safe, Mixed-Income, Accessible, Reasonably-priced, Transit-Oriented) Housing program is designed to stimulate the production of housing for low-and-moderate income residents of Austin. To participate in S.M.A.R.T. Housing, developments must provide a certain level of affordable housing, meet certain accessibility and green building standards, and satisfy requirements related to proximity to transit. The City of Austin provides certain fee waivers (including Permit, Capital Recovery, and Construction Inspection fees) and S.M.A.R.T. Housing development review for certified developments.
For further information, please see the S.M.A.R.T. Housing guide and S.M.A.R.T. Housing section of the Land Development Code. Development within the University Neighborhood Overlay (UNO) is also required to meet certain S.M.A.R.T. Housing thresholds. For further information, see UNO information under the Overlays tab.
- Apply for SMART Housing
To apply for SMART Housing or UNO certification, please visit the application website (Web).
Density Bonuses allow developers to build more units than are allowed by a site’s base zoning if the developer agrees to set aside a portion of units for income-restricted affordable housing or, in some cases, pay a fee, known as a fee-in-lieu. The affordable housing units must be income-restricted and leased or sold to a low-income or moderate-income household for the required affordability period.
You may view details on the City of Austin’s density bonus programs by viewing the Developer Incentive Matrix or visiting the drop-down menus below. Examples of density bonuses include the Downtown Density Bonus, University Neighborhood Overlay (UNO), Transit-Oriented Development, East Riverside Corridor, and North Burnet Gateway Density Bonus.
- Affordability Unlocked
Affordability Unlocked is a development bonus program that waives or modifies some development restrictions in exchange for providing affordable housing. In return for setting aside half of a development’s total units as affordable, developments can receive increased height and density limits, parking and compatibility waivers, and reductions in minimum lot sizes. The program is designed to increase the number of affordable housing units being developed in Austin and fully leverage public resources by allowing housing providers to build more units in their developments when significant amounts of affordable housing are included.
To apply for Affordability Unlocked, please fill out the online application.
Please visit the Affordability Unlocked program website for more information, including a program guide.
- Vertical Mixed Use (VMU)
The Vertical Mixed Use (VMU) density bonus is a voluntary density bonus available to properties with the -V combining district in their zoning string. The bonus provides various modifications to development regulations including setbacks, FAR, permitted uses, and parking. VMU buildings must provide a mix of uses and on-site affordable residential units. Different requirements may apply depending on site location and whether the applicant opts into VMU 1 or VMU 2.
Overlays apply to specific areas within the City of Austin. The boundaries and requirements for these programs are established by ordinance and enshrined in the City’s Land Development Code.
University Neighborhood Overlay
Residential development in the University Neighborhood Overlay (UNO) is required to meet certain SMART Housing thresholds. By providing additional on-site affordability, applicants can obtain a density bonus that provides additional height, FAR, and modifications to compatibility and parking standards.
The University Neighborhood Overlay is located in West Campus. To determine whether a site falls within the UNO boundary, or to determine which UNO Subdistrict applies to a site, please visit the UNO Boundaries section of the Land Development Code.
If you hope to participate in the University Neighborhood Overlay, please review the UNO District Requirements section of the Land Development Code, the Post-2014 UNO Affordability Requirements, and the UNO Height Bonus. To apply, please complete the application web form. For an updated list of need-based financial aid awards that may be used to qualify for S.M.A.R.T. Housing, please see the updated SMART Awards List.
Downtown Density Bonus
The Downtown Density Bonus program covers the downtown area. This program provides an increase in maximum height and FAR in exchange for on-site affordable housing units, a fee-in-lieu of affordable housing units, community benefits, or some combination of the three.
Different standards apply depending on the site’s location within the Downtown Density Bonus program area. Please review the Downtown Density Bonus Program section of the Land Development Code for information on program requirements and a map of the boundaries. For projects within the Rainey Street Subdistrict, additional requirements apply.
Please utilize these resources for guidance on the applicable community bonus calculations in Ordinance and fee-in-lieu rates.
Residential in Commercial
The Residential in Commercial program applies to certain commercial base zoning districts. Participation in this voluntary program permits residential uses in these commercial base zoning districts.
Compatibility on Corridors
The voluntary Compatibility on Corridors affordable housing bonus program relaxes compatibility standards and parking requirements for properties along certain corridors which agree to meet the affordable housing requirements of the program.
For further information, please see Ordinance No. 20221201-056. For general questions about compatibility along corridors, please see the Compatibility on Corridors Overview. To apply, please utilize the Density Bonus Application and return it to HPDReview@austintexas.gov.
Micro-Unit Density Bonus
The Micro-Unit Density Bonus is a voluntary program that offers relaxed site area and parking requirements for eligible units in a development that provides the required on-site affordable housing. These bonuses and requirements apply to dwelling units that contain 500 sq. ft. or less, or three-bedroom units. The development site must be located in a transit-oriented development district, a core transit corridor, or a future core transit corridor.
- Regulating Plans
Regulating Plans are comprehensive planning documents which set standards for new development in key areas within the City. The standards within these areas are fully spelled out within the Regulating Plans and only apply within the Regulating Plan boundaries. Regulating Plans feature voluntary development bonus programs.
Transit Oriented Development (TOD)
The City of Austin currently has three designated Transit Oriented Development (TOD) districts. Developments within these TOD districts is regulated by individual Regulating Plans. Each Regulating Plan includes a voluntary affordable housing bonus.
Applicants interested in developing near the MLK Red Line Station should consult the MLK TOD Regulating Plan.
Applicants interested in developing near the Plaza Saltillo Red Line Station should consult the Plaza Saltillo TOD Regulating Plan.
Applicants interested in developing near the Crestview Red Line Station should consult the Lamar/Justin TOD Regulating Plan.
North Burnet/Gateway (NBG) refers to the approximately 2,300 acre area in north Austin bounded by Walnut Creek on the north, Metric Boulevard on the east, US 183 (Research Boulevard) on the south and southwest, Braker Lane on the northwest, and MoPac (Loop 1) on the west. This Regulating Plan includes a voluntary affordable housing bonus.
Applicants interested in developing within the NBG Boundaries should reference the NBG Regulating Plan. To apply for the bonus, please utilize the Density Bonus Application and return it to HPDReview@austintexas.gov.
East Riverside Corridor
The East Riverside Corridor (ERC) covers properties along East Riverside Drive bounded by IH-35 to the west and Highway 71 to the east. This Regulating Plan includes a voluntary affordable housing bonus.
Applicants interested in developing within the ERC boundaries should reference the ERC Regulating Plan. To apply for the bonus, please utilize the Density Bonus Application and return it to HPDReview@austintexas.gov.
- Density Bonus Calibration
Density bonuses are calibrated based on a number of relevant factors. To learn more, download the Density Bonus Program Calibration Model (XLS-April 2022), learn more about the model in this memo from economic consultants EcoNorthwest, or review EcoNorthwest’s economic analysis related to hotels and density bonus programs.
Affordability is also promoted through Development Agreements which may produce affordable units and/or fees-in-lieu. Learn more about the Current Development Agreements (PDF).
Funding options exist through the City’s Rental Housing Development Assistance (RHDA) and Ownership Housing Development Assistance (OHDA) programs. Affordable housing developers may also require the City’s involvement in support of applications to the State of Texas for Low-Income Housing Tax Credits (LIHTCs) or Private Activity Bonds (PABs). To learn more about the City’s RHDA and OHDA programs, or State LIHTCs and PABs, please visit the program website (Web).