Austin Advances Missing-Middle Zoning, Clears New Towers, Revisits I-35 Cap Funding
Austin’s growth agenda took several notable turns this week, with City Council moving forward on housing reform, approving major downtown development, and slowing momentum on a high-profile highway project.
Missing-Middle Housing Moves Ahead
On March 30, City Council approved a package of land-use changes designed to accelerate construction of so-called missing-middle housing. The changes aim to make it easier to build duplexes, fourplexes and small apartment buildings in walkable, transit-served areas.
City leaders say expanding these housing types is key to improving affordability and increasing supply after years of stalled code rewrites and legal battles. The move marks another step in Austin’s long-running effort to reshape zoning rules to better match rapid population growth.
Two 400-Foot Towers Approved Downtown
In a separate vote March 31, Council approved entitlements for two new towers exceeding 400 feet near the University of Texas campus. The project, led by a local development group, will rise on a block bounded by Rio Grande and Nueces streets.
The approvals allow additional height and density through the city’s Downtown Density Bonus Program. Supporters say the project reinforces downtown’s role as a jobs and housing hub, while adding to the tax base and long-term economic development pipeline.
I-35 ‘Cap and Stitch’ Faces Funding Questions
Meanwhile, city officials are reassessing next steps for the I-35 Cap and Stitch initiative. Less than a year after approving a $104 million plan to support future highway caps over the interstate, leaders are pumping the brakes amid funding uncertainty and coordination challenges with the state.
The project is intended to reconnect downtown and East Austin with potential parks and development above the highway. However, budget pressures and shifting priorities have clouded the timeline.
Housing Resources in Focus
Outside City Hall, the city also announced an upcoming Housing Affordability Fair set for April 11, aimed at connecting residents with rental assistance, homebuyer programs and other local resources.
Together, the week’s actions reflect a city balancing growth, infrastructure costs and affordability as Austin continues to evolve.
Sources
Austin council pushes new zoning laws for missing middle housing
https://therealdeal.com/texas/2026/03/31/rundog-real-estate-wins-approval-for-two-austin-towers/
https://www.planetizen.com/news/2026/03/137238-austin-officials-pump-brakes-i-35-cap-stitch-project
https://www.yahoo.com/news/articles/upcoming-housing-affordability-fair-highlight-222828133.html
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