Austin's Bad Party: The Failure of CodeNEXT

Last month, the Austin City Council approved a resolution ending a controversial process to rewrite the city’s land use regulations, a project known as CodeNEXT. This week, Strong Towns is examining issues surrounding land development regulations in Austin and the CodeNEXT process. This is the third installment: read Part 1, Part 2, Part 4, and Part 5 of the series here.

Want to keep talking about this? On October 4 and 5, Strong Towns is hosting a Regional Gathering in Plano, Texas. Space is limited, but, as of today, tickets are still available.

What if you had the chance to fix everything that's wrong with your city's zoning code? The money, the time, and the expert consultants to do a massive overhaul of the whole thing? The notion is undeniably appealing. These codes, even in places with a lot of forward-thinking planners and design professionals, are mostly legacy documents from the peak years of 20th-century suburbanization.

Much of Austin, Texas’ code is decades old. But since it was written, a revolution in thinking about how to build great places has begun, led by groups like the Congress for the New Urbanism. Alongside it has come an increasing recognition of the costs of the massive, uncontrolled experiment upon our cities that is the suburban development pattern. 

Planning schools now teach the case for walkable, human-scale places; mixed-use development integrated into neighborhoods; narrow streets that slow traffic; reducing the proliferation of unnecessary free parking; and a whole variety of things that are nonetheless very difficult to achieve on the ground in most U.S. cities. They're difficult in no small part because of our legacy zoning codes that require traditional, time-tested forms of development—the stuff we know works—to go through a convoluted approval process before it’s built, if it's even allowed at all.

So it's a profoundly tantalizing prospect to hit the reset button. And even more so in a place like Austin, Texas, which is in the throes of a tech-fueled housing boom and housing affordability crisis, as it experiences some of the fastest growth in the country. The urgency of getting growth right in Austin during this window of opportunity is compelling. 

What would a card-carrying urbanist want to do in Austin? What should Strong Towns advocates and readers want to do in Austin?

I suspect your proposal might look a lot like CodeNEXT, the comprehensive rewrite of Austin's land development regulations that was scrapped in August 2018 after three attempts at finding a politically palatable draft.

What was CodeNEXT?

CodeNEXT sought to make room for the housing necessary to accommodate Austin's growing population without skyrocketing housing costs and displacement—a task for which they estimated Austin would need 135,000 new homes to be built over ten years. And it did it through a list of proposals that checked many of the boxes on a New Urbanist's wish list:

 • Implementing a form-based code in the city's traditional urban neighborhoods, which would facilitate a more organic mix of uses rather than the strict separation between residential and commercial that is the status quo. This would allow for what the City's 2012 comprehensive plan, Imagine Austin, called "a city of complete communities."

 • Allowing a greater variety of housing types, including missing middle housing.

• Increasing the city's zoning capacity to enable infill development where demand exists, instead of pushing new growth to the suburban fringe.

• Reducing and eliminating many parking minimums.

• Simplifying the standards for development and making them more predictable for all parties. 

CodeNEXT promised to be a once-in-a-generation opportunity to change Austin's growth trajectory away from what Strong Towns President Chuck Marohn calls a "toxic soup of perverse incentives." But as CodeNEXT evolved, it became something else—something we believe would not have solved Austin's major problems even if it had passed. And the point is moot, because as of September 2018, the CodeNEXT project is dead on the operating table. It's an object lesson in why turning around the ship of bad land-use planning is a nearly impossible task, especially when attempted in this sort of technocratic, fix-everything-at-once way. 

Exploring the Root of the Problem: The Party Analogy

CodeNEXT succumbed to, in a word, politics. And the politics of growth and development in Austin, and nearly every growing American city, can be explained quite well by what we call the party analogy.

A city or neighborhood developed in a traditional way—the way we've built for most of human history—is like a really great party. Guests at a great party are excited when new guests show up, because they bring a dish or beverage to share, and the prospect of good conversation. In a city, new development brings more money to invest in infrastructure and services, which are built out iteratively and incrementally over time as the city itself grows. Your new neighbors become your customers and your favorite local business owners and your classmates and coworkers and friends, and their presence enriches your city and your neighborhood. There's more to do, more to enjoy, and more wealth being generated to help sustain it all in the long run.

This good party depends on places built at a walkable, human scale—in such a place, growth has few negative consequences, and so the slew of positive ones predominates.

The suburban development pattern—which, to be clear, characterizes most of Austin, despite its status as a major city—is a different story. It's built around the car as the near-universal, hegemonic mode of transportation, and around neighborhoods built all at once to a finished state. Those are its defining characteristics.

In the suburban development pattern, growth means traffic. It means disruption. It means dispersed benefits, but concentrated harms. This breeds not-in-my-backyard sentiments, as growth becomes a hot potato—something I've previously called the Neighbor's Dilemma. This is not because residents are selfish or irrational—at least not any more than all of us humans are—but because of the very real incentives they face to oppose development near where they live.

The guests at a bad party don't want anyone else to show up. New development is perceived as a strictly losing proposition for existing residents. It will congest streets with more traffic. It will get harder to park. It will displace our community. It will cause our rents to go up. The schools will be overcrowded. The newcomers won't be in the same socioeconomic class, or share the same values, as us. New businesses will cater to them and not to us longtime residents. We'll lose our historic architecture. We'll lose our tranquil character. The litany of objections goes on.

Austin has thrown itself a really bad party. This is evident in the extreme hostility to CodeNEXT from multiple corners and accusations of bad faith flying every which way. The CodeNEXT planning process did not achieve its high-minded, and maybe impossible, goal of fostering mutual trust, a consensus about Austin's future form, or the belief that the city government itself had residents' interests in mind.

But it's not clear that a better planning and public engagement process could have prevented this outcome. The problem is deeper. The problem is that development's benefits in Austin are dispersed, while its downsides are concentrated in the immediate neighborhoods where that development occurs.

CodeNEXT's goals were noble, and the people working on it were really smart professionals. CodeNEXT promised to address real problems through the best practices of the planning profession. Instead, through its three revisions and the ensuing waves of protest, the CodeNEXT team was forced to make changes that compromised the plan's ability to deliver on its promises in an attempt to satisfy multiple constituencies.

In the end, those constituencies proved impossible to satisfy regardless. The compromises made satisfied no one. In August, the mayor pronounced the CodeNEXT process dead.

So what happened to it?

1. Mistrust emerged almost immediately from every corner.

In early 2017, the CodeNext team released the first draft of the overhauled zoning code. They did so without detailed explainers of the code's complicated concepts, such as Transect Zones.

Some tried to fill the gaps. Outside blogs such as Austin Contrarian pored over the details and shared more accessible explanations of what was actually proposed for where, as did major news media. But advocacy groups quickly seemed to take control of the narrative. And their reactions to the code present a weird sense of alternate realities existing in parallel.

Here's the reaction of AURA, an urbanist group in favor of infill development and improved public transportation: 

 The CodeNEXT maps revealed yesterday are so deeply flawed that further tinkering block by block around the edges of a few neighborhoods and corridors will not be enough to enable CodeNext to meaningfully address Austin’s worsening affordability, mobility, environmental, and segregation problems.

There is not enough increased housing capacity in Central and West Austin to offset the inequitable housing pressures on East Austin. We must recognize that our current land use code has been a major catalyst for gentrification and displacement. 

Allowable density is actually decreased in some areas of the central city compared to what is allowed under today’s regulations! For example, some homeowners who were previously allowed to construct ADUs now cannot. Heights and zoning capacity in many single family zoned areas are even further restricted. We should not be moving backwards.

On the other hand, advocates representing homeowners in single-family residential neighborhoods near the downtown Austin had a very different reaction: 

A residential teardown in Austin’s Bouldin neighborhood, south of downtown. In neighborhood interiors, virtually the only new housing being built consists of one-for-one replacements of existing homes. (Photo source: Google)

“It’s about as subtle as a wrecking ball,” said Cory Walton, the president of a near-downtown neighborhood association, to the Austin Statesman. “I’m concerned about the effect this would have on our neighborhood’s character and our existing historic housing,” said Gretchen Otto, a nearby neighborhood's association president. “I’m concerned that developers are going to come in hot.”

Anti-development activists formed groups such as Community Not Commodity to protest CodeNEXT as a threat to the integrity of residential neighborhoods.

So which was it? Not far enough, or way too far? 

In terms of the overall distribution of Austin's growth, the answer appears to be that CodeNEXT entailed relatively minor changes—as the Austin Contrarian blog points out, the new zoning maps largely maintained the status quo. Most increases in allowable housing density came in areas that already had a lot of zoned capacity (units that have not yet been built or proposed but are permissible under existing zoning). Only 3% of the new units were in neighborhood interiors within the traditional urban neighborhoods of the city of Austin—the places that are currently off-limits to virtually any new housing other than one-for-one replacement of existing homes.

Future versions of CodeNEXT attempted to quell the widespread mistrust of the plan through what Mayor Adler called a grand bargain. An "Austin bargain." 

2. The "Austin Bargain" failed to mollify critics, while making the plan worse.

Mayor Steve Adler described his proposed "Austin Bargain" as follows:

Maybe it makes sense to agree on a compromise up front. Let’s call it the “Austin Bargain,” an agreement that protects all of us from our worst fears so the community as a whole can achieve the best possible outcome.

For starters, let’s agree we will not force density in the middle of neighborhoods. There’s no sense in shoving density where it would ruin the character of the city we’re trying to save in the first place, where it’s not wanted by its neighbors, and where we would never get enough of the additional housing supply we need anyway.

And in exchange, let’s also agree that we will adopt a code rewrite that will give us the housing supply we need by focusing along our major corridors like Lamar, Burnet, and Airport Boulevard and our major activity centers like the area around the Domain, Mueller, and downtown.

That will enable the mixed-income housing supply that creates opportunities for more Austinites to stay in Austin, and also to give us the concentration we need to make transit work.

Concentrating density on a few major corridors has a number of fatal flaws as a proposal. Particularly nasty is how intensely upzoning a limited area can distort land prices. Strong Towns President Chuck Marohn has previously written about this phenomenon.

Many commercial corridors in Austin are dominated by low-rise buildings. Suppose a commercial strip is upzoned dramatically to allow 5-story mixed use. Suppose an entire city's worth of new housing demand is to be funneled to a few such areas. Suppose the city lets people know in advance that it's going to be doing this. What is likely to happen to land prices? 

The answer is they go through the roof. Even adjacent to the upzoned area, where there's some reasonable expectation or probability of future upzones, land values increase. Targeted, intense upzoning presents the perfect invitation to land speculators.

To make matters worse, large mixed-use buildings are a relatively expensive way to provide new housing. The cost per square foot of such construction is far greater than that of a duplex, fourplex, or accessory dwelling unit (ADU). 

All of this directly translates into unaffordable housing, and it concentrates the disruptive impacts of development, such as increases in traffic on arterial streets. It's a dramatic disruption to the handful of neighborhoods targeted to bear the heavy load of Austin's housing needs, so that others can be kept under glass. 

And in the end, it didn't even mollify the homeowners and neighborhood associations so concerned that their neighborhoods would be upzoned. Community Not Commodity remained stalwart in its opposition to every version of CodeNEXT. Plan opponents even persuaded Texas Attorney General Ken Paxton to file a lawsuit against eight volunteer members of Austin's planning commission, alleging that the number of members connected to the real-estate development community (if nonprofits such as Habitat For Humanity are included) violated the city charter.

3. The politics of hyper-parochialism prevailed.

A system which took effect in 2015 reorganized the structure of Austin's City Council, from six city-wide seats to ten single-member districts. This rewards candidates and elected officials for intense concern on what's going on in their own districts, to the detriment of focusing on what's best for the city as a whole.

The result was a plan that couldn't attract the support it needed, because it was being pitched as a grand bargain, but many neighborhoods didn't perceive it as one for them. Neighborhood activists and homeowners can dominate the politics of a single-member district much more easily than they can that of the city as a whole.

Everything comes down to politics. I spoke with an architect for a major national firm who worked on a master plan for a large infill site in West Austin. This individual asked not to be identified, but told me that at least a half dozen times, they have been told face-to-face by Austin elected officials, "I love everything you're proposing. I fully support what you want to do. But I need you to understand, I'm going to denounce it publicly, because I have to."

In the end, neighborhood activists remained unhappy with CodeNEXT, even though it had been watered down to eliminate most meaningful changes to single-family zones. With a mayoral election coming up, and mistrust of the process from every corner, mayor Adler pronounced CodeNEXT dead before arrival. DBA.

Why did CodeNEXT fail?

Austin fell victim to the bad party problem. Maybe a better public process could have produced a transformative result for the city, untangled the knot of perverse incentives that have driven its development. 

But this is an unbelievably difficult uphill battle. And the politics aren't unfamiliar—nearly everything that a pro- or anti-CodeNEXT activist group has said about the reform effort is something I've heard in San Francisco, something I've heard in Seattle, something I've even heard in Minneapolis (which has far lower housing costs and slower growth than any of those tech-boom-fueled cities). Before I began any research, I had already guessed what the different constituencies involved—homeowners and neighborhood activists, racial justice and anti-displacement activists, YIMBYs and urbanists, development interests—would be saying about CodeNEXT. It's the same story all over the place. 

Car-centric development is a bad party. Everyone's incentive is to pass growth off—growth that the city needs, to accommodate housing demand and to make productive use of its infrastructure investments—on someone else like a hot potato. 

And so Austin has so far failed to deliver a form-based code that can re-legalize walkable, traditional, highly productive development throughout the city. The same perverse incentive problems persist, in which fiscally unproductive areas aren't allowed to get more productive. Suburban fringe development will continue at breakneck pace if Austin can't figure out a way to absorb more of the region's growth.

There is a way it can. We have a few suggestions about how a Strong Towns approach could fix Austin's broken zoning, and we will talk about them this Friday. The politics aren't necessarily easier. But CodeNEXT didn't work: isn't it time for a new approach? A Strong Towns approach?

(Cover photo: Wikimedia Commons)