Image via city of Austin Parks and Recreation Department

Any new development in Austin is supposed to come with a chunk of parkland, and when that’s not possible, developers must pay “parkland dedication fees,” which go into a pot of money used to acquire public parkland in the area of the new development.

That fund is about to be slashed, thanks to a bill passed this legislative session that limits how much money cities can demand from developers to put toward parks.

House Bill 1526 creates caps on parkland dedication fees only for cities with a population greater than 800,000 (so, it targets Houston, San Antonio, Dallas, Austin, and Fort Worth). Austin’s Parks and Recreation Department estimates that the new fees per dwelling unit will be 30 to 60% lower than current fees, meaning PARD won’t meet its parkland goals unless it finds new funding sources. The biggest change, though, is that the city can’t place parkland requirements on any commercial development anymore, nullifying Council’s amendments from October 2022.

About one in 10 of Austin’s parkland has been purchased through parkland dedication fees, and with additional easements, they have supported, in some way, roughly a third of the city’s parks. But builders say that increasing fees in recent years create barriers to more affordable development. In response, last fall Council enacted a new ordinance lowering the overall fees for 2023 by 45% from the 2022 cost. But the new law decreases them much more severely. Currently, parkland dedication fees are enough to dedicate roughly 9 acres for every 1,000 residents a development serves. The new law changes that to less than a tenth of an acre per 1,000 residents in the Central Business District, three-quarters of an acre per 1,000 in the urban area, and 3 acres per 1,000 in the suburban area. A city release notes that these changes “may limit the City’s ability to meet parkland dedication targets,” most directly affecting areas designated CBD and urban areas. The city’s eventual goal is to provide 24 acres per 1,000 residents.

The Parks and Recreation Department is working to draft a new ordinance to comply with the law, which must be adopted no later than December 1 of this year, and will apply to all multifamily, hotel, and motel applications submitted on or after January 1, 2024.

Other than the ordinance, Council will hold a public hearing on proposed boundaries for CBD, urban, and suburban areas at the October 19 meeting. Proposed boundaries can be viewed at AustinTexas.gov/PLD.