Texas Attorney General concludes Austin’s project duration ordinance conflicts with state law

I wrote about Austin’s project duration ordinance in August. The prompt was a state representative’s request for a formal opinion from the Texas Attorney General that Austin is expiring real estate development projects in violation of the state vested rights statute.

The Attorney General yesterday concluded that, yes, the City’s project duration ordinance conflicts with state law.  

You can read my original post for more background, but the basic question is, When can a city force a development project to start over under current regulations? The City has a “project duration ordinance” that imposes either a hard three-year or five-year deadline on projects (depending on where they’re located) before they must start over under current regulations. The City also has a sort of “dynamic” deadline that purports to require projects to start over under current regulations if a building permit expires.

The AG concluded that this ordinance conflicts with Chapter 245 of the Local Government Code, the state statute that creates vested rights. Chapter 245 allows cities to expire those rights after five years if the developer has made no “progress towards completion of the project.” But the statute lists a fairly specific set of things that constitute “progress towards completion.” The City ordinance purports to expire projects regardless of whether the developer has met any of those benchmarks. The AG essentially determined (correctly, I think) that the City’s ordinance conflicts with Chapter 245 for this reason.

It is important to bear in mind the distinction between a “permit” and “project rights.” This opinion does not address what sort of expiration  dates a city can put on a building permit or site plan. But it does mean that if, say, a site plan expires, the city should evaluate a new site plan application under the original regulations unless the project has become dormant, the project has changed, or a Chapter 245 exception applies. Vested rights do not expire merely because a permit or site plan expires.

The AG opinion is merely advisory, of course, but it should still carry some intellectual and moral weight. It will be interesting to see whether the City continues to enforce its project duration ordinance.