Austin, Texas

Austin, (population 913,000), the capital of Texas, is located 200 miles south of Dallas-Ft. Worth and 100 miles north of San Antonio. The City has had a TDR program for years aimed primarily at protecting groundwater recharge areas. For a description of groundwater protection TDR program, please scroll down on this page to the section entitled Groundwater Protection. Immediately below is a profile of Austin’s separate Downtown program.

Austin - Driskill Hotel

The Austin DTC program can be used to fund the preservation of historic structures like the Driskill Hotel shown here.

 Austin - Shoal Creek

One observer reports that Austin has used DTC revenues to improve water quality and restore native vegetation in Shoal Creek.


For many years, Austin used a process called Central Urban REdevelopment, or CURE, to capture and redirect some of the windfalls from upzoning to community benefits; however, CURE did not formally specify the kind or amount of community benefit worthy of density bonus. This informal approach resulted, according to critics, in ad hoc deal making between the City and developers. In 2008, the City adopted an interim density bonus program. Three years later, the 2011 Downtown Austin Plan called for replacing the interim program with a predictable system aimed at producing the most “at risk” community benefits, including affordable housing, climate change measures, historic preservation, cultural vitality, pedestrian facilities and downtown open space.

The term “density bonus” often is used to describe mechanisms in which a project is allowed additional density when the development provides community benefits on site, an outcome that this web site does not consider to be TDR. And in fact, Austin’s current Downtown Density Bonus Program (25-2-586), (adopted in 2014) allows bonus density when developments include the following on site community benefits:

  • (E)(1) Affordable housing
  • (E)(2) Rainey Street historic preservation
  • (E)(3) Day care
  • (E)(4) Cultural uses
  • (E)(5) Live music
  • (E)(6) On site historic preservation
  • (E)(8) Green building
  • (E)(9) Publicly accessible on-site plaza
  • (E)(11) Green roof
  • (E)(12) Other (possibly off- as well as onsite).

This web site takes the position that a TDR mechanism occurs when density bonus is awarded for off-site community benefits. Austin’s Downtown Density Bonus Program in fact allows bonus for three types of off-site community benefits. Importantly, these off-site benefits are achieved through payment of an in-lieu fee, which this web site refers to as a Density Transfer Charge or DTC.

  • (E)(1)(a)(iii) Affordable housing – Developers achieve bonus by paying a development bonus fee at a dollar per square foot amount set by ordinance and deposited in the Affordable Housing Trust Fund. According to a 2013 article, the fee varies from $3 to $10 per bonus square foot of floor area depending on the location of the receiving site (Pagano 2013).
  • (E)(7) Development Bonus Fee for Off-Site Historic Preservation – This code section grants bonus density when developers pay a dollar per square foot amount set by ordinance based on the district in which the receiving site is proposed. The fee is deposited in the Historic Preservation Fund.
  • (E)(10) Off-site Open Space Development Bonus Fee – The project can achieve bonus density through payment of a development bonus fee for off-site open space at a dollar per square foot amount set by ordinance based on the district in which the proposed development is located. These fees are deposited in the Downtown Open Space Fund administered by the City.

A recent article reports that both projects that have taken advantage of the DDBP as of May 2015 used the cash-in-lieu or DTC option; this has caused some City Council Members to suspect that the DTC option is cheaper than the other alternatives and to call for a fresh analysis of the cash-in-lieu amounts. Nevertheless, these two projects alone were reported to generate $1.3 million in DTC (Pagano 2015).

One article reports that the entire $1.3 million will be paid to the Affordable Housing Trust Fund. But another author reports that the Fifth and West Residences project will pay $500,000 to affordable housing and $330,000 into the Downtown Open Space Fund for improvements to Shoal Creek (Grattan 2014). The City has already embarked on restoration of Shoal Creek between 15th and 28th streets to improve floodwater control, reduce erosion, improve water quality and re-introduce native vegetation to the riparian corridor. In 2014, the City also approved a $4 million project to close gaps in the Shoal Creek trail as well as stream bank stabilization and revegetation.

Grattan, Robert. 2014. “Robert’s Take: Downtown density plan a windfall for affordable housing, nonprofits.” Austin Business Journal. May 30, 2014.

Pagano, Elizabeth. 2013. “Density Bonus Program ‘Interim’ No More.” Austin Chronicle. July 5, 2013.

Pagano, Elizabeth. 2015. “Committee considers density bonus revamp.” Austin Monitor. May 21, 2015.

Groundwater Protection

The Water Quality section of Austin’s Land Development Code designates the most sensitive portions of watersheds as critical water quality zones, often including flood plains and other areas closest to streams and lakes. In all watersheds, development in critical water quality zones is limited to parks, golf courses and open space or water-related uses, such as docks and marinas, in selected areas. Adjacent to the critical water quality zone, a water quality transition zone extends outward another 100, 200 or 300 feet depending on whether the waterway is considered minor, intermediate or major. In a water quality transition zone, maximum impervious cover limits vary depending on the sensitivity of the watershed, ranging from 18 to 30 percent impervious cover. Land outside of critical water quality zones and transition zones are considered uplands. Again, depending on the sensitivity of the watershed, impervious cover limits can range from 30 percent to 65 percent and can increase as detailed below when coverage rights are transferred. Transfers are not allowed in the Barton Springs Zone but can occur in three other watershed categories: Suburban Watershed, Water Supply Suburban Watershed and Water Supply Rural Watershed.

In areas defined as Suburban Watersheds, 20,000 square feet of impervious cover can be transferred to an uplands zone for each acre of land in critical water quality zones that are dedicated to the city. Similarly 20,000 square feet of impervious cover can be transferred for each acre left undeveloped in a water quality transition zone, for each acre of land preserved in the buffer area for a critical environmental feature and for each acre of upland land used for wastewater irrigation and restricted against future development. Furthermore, 17,000 square feet of cover can be transferred per acre of land restored with native plants and used as a golf course or some other recreational facility and 10,000 square feet can be transferred for each acre of land in a water quality transitional zone used for wastewater disposal. The receiving tract must be within one mile of the transferring tract. Finally, the applicant must concurrently plat the transferring and receiving tracts and must transfer all development intensity at that time.

In another land category named Water Supply Suburban Watersheds, impervious cover is more limited than in the Suburban Watershed category described above. The transferable coverage per acre of sending area land is lower than in the Suburban Watershed category. Likewise the maximum cover achievable with TDR is lower: for single-family development, coverage can increase from 30 to 40 percent; and for commercial or multiple family residential, cover can increase from 40 to 55 percent. However, the restrictions on transfer distance and concurrent platting or sending and receiving areas is similar to those found in the Suburban Watershed category.

In another category named Water Supply Rural Watersheds, the receiving areas in the Uplands Zones can go from one unit per two acres to one unit per acre for single-family residential uses that use TDR and from one unit per acre to two units per acre for clustered housing that uses TDR. For commercial or multiple family residential development, TDR can be used to increase cover from 20 to 25 percent. The amount of development intensity that can be transferred is different from that allowed per acre preserved in the Suburban Watershed or the Water Supply Suburban Watershed categories.

Pat Murphy of the City of Austin reported in April 2005 that these transfer provisions had been used many times but that the City had not attempted a formal inventory of the land preserved as a result. He also mentioned that preservation occurred on a case-by-case basis in the Barton Springs Zone even though the formal transfer mechanism does not apply in that zone.