Officials, Experts and Key Figures Speak Out as City Council Pushes Through Controversial South Congress Zoning Changes

The Austin City Council voted 7-4 late Thursday to rezone a 12-block stretch of South Congress Avenue, clearing the way for mixed-use towers up to 150 feet tall despite warnings from preservationists and city planners that the move could displace longtime businesses and accelerate gentrification in the 78704 ZIP code.

The decision comes as Austin grapples with a housing shortage that has pushed the median home price above $575,000, a 60% increase since 2020, and as the city's population swells past 1.1 million. South Congress, once a gritty strip of thrift stores and taco joints, now draws tourists from around the world to shops like Uncommon Objects and the Continental Club. But critics argue that the new zoning rules will erase the very character that makes the area a destination.

What City Hall Says, and What It Doesn't

Interim Planning Director Julia Moreno told the council that the rezoning is necessary to meet state-mandated housing targets under House Bill 3435, which requires Austin to permit at least 100,000 new dwelling units by 2030. “We cannot build our way out of this crisis by limiting density to single-family lots,” Moreno said during the hearing, noting that 40% of Austin renters now spend more than 30% of their income on housing. Council Member Ryan Alter, who represents District 5 where South Congress runs, argued the change would bring more affordable housing options within walking distance of the future Blue Line light rail station at Oltorf Street.

But the council's vote flew in the face of a recommendation from the city's own Zoning and Platting Commission, which had voted 6-3 against the plan in May. Commissioner Elena Rosalez, who voted no, told The Daily Austin that the commission had flagged concerns about traffic congestion on Congress Avenue, which already sees 35,000 vehicles daily between Oltorf and Elizabeth streets. “We asked for a traffic impact analysis and a shadow study to protect the historic bungalows on Elizabeth,” Rosalez said. “Neither was done before this vote.”

Development Community Cheers, But Neighborhood Groups Bristle

The Austin Board of Realtors praised the decision in a statement, calling it “a step toward a more walkable, transit-oriented city.” South Congress developer James K. Polk, whose firm Polk Properties owns three parcels within the rezoned area, told local radio that the new height limits would allow him to build a 12-story mixed-use project with 200 apartments, 20% of them designated as affordable for households earning up to 80% of the area median income, or about $62,000 for a family of three. “This is exactly what the city needs,” Polk said. “We can't freeze Austin in amber.”

But the Save South Congress coalition, which includes the Bouldin Creek Neighborhood Association and the South Congress Merchants Association, is vowing to fight. Organizer Sarah Templeton, a 15-year resident of nearby Travis Heights, noted that a similar upzoning of the Rainey Street district in 2013 led to the demolition of every single historic bungalow there. “South Congress is not Rainey Street,” she said. “We have 80-year-old family-run businesses like the Texas Chili Parlor and Allen's Boots. The council didn't even model what a 150-foot building would look like from the Ann W. Richards Congress Avenue Bridge.”

The dissenting council members, Vanessa Fuentes, Zo Qadri, Leslie Pool and Kathie Tovo, cited the lack of a comprehensive neighborhood plan. Fuentes pointed out that the area lacks a single supermarket within a half-mile radius, meaning new residents would still need to drive for groceries. Pool, whose District 8 includes parts of South Congress, warned that the new height limits could cast a shadow over the planned South Central Waterfront District, a $1.2 billion park-and-trail project expected to break ground in 2027.

What happens next is less clear. The rezoning takes effect in 30 days, but the Save South Congress coalition plans to file a lawsuit under the Texas Local Government Code, arguing that the city failed to properly notify 47 property owners within 200 feet of the rezoned parcels. Separately, state Representative Gina Hinojosa, whose House District 51 covers much of South Congress, has introduced a bill that would suspend the rezoning until a full environmental impact statement is completed. She expects the bill to be taken up when the Texas Legislature reconvenes in January 2027.

For now, the message from City Hall is clear: Austin is building up, and South Congress will not be left out. But as Council Member Tovo put it, “We are losing the soul of this city one vote at a time.” For residents like Templeton, the fight is only beginning. “We'll see them in court,” she said.