Austin approves Dog’s Head TIRZ, paving way for $5.6B in infrastructure investments

The Austin City Council is advancing plans to facilitate major infrastructure development in Dog’s Head after establishing a new tax increment reinvestment zone (TIRZ). The zone will finance construction within Dog’s Head over the next 35 years, contributing to infrastructure improvements costing approximately $5.6 billion. 

The city annexed the land earlier this year in May, incorporating the site into its city limits. With the TIRZ in place, the city will unlock new mixed-use development opportunities across more than 2,600 acres of Dog’s Head. Current plans include building: 

• Housing. 

• Retail space. 

• Office space. 

• Hospitality land use. 

• Industrial land use. 

Planned infrastructure projects needed to support Dog’s Head development will include building and refurbishing multimodal roadways, regional water quality and drainage infrastructure, public water, wastewater, electrical utilities trails and open spaces. 

TIRZs record all taxable value of property in firmly defined sectors, basing any increased property values off the tax increment base established the first year the zone is created. The more development occurs, the higher the appraised value of properties will be, resulting in a captured appraised value that rises with each year. 

Tax increments are collected from this rising captured appraised value, placing a portion of those collections in a Tax Increment Fund (TIF). These funds are exclusively available for use in improvement projects located within the jurisdiction of that TIRZ. Any additional property and sales tax created through redevelopment will remain within Austin’s budget. 

The TIRZ document notes that Austin will contribute 75% of its property and sales tax increment over the next 20 years, followed by 66% between years 21 through 35. If Travis County agrees to contribute through a separate County Participation Agreement, it has been requested to provide 50% of its property tax increment to the fund. Austin and Dog’s Head will review infrastructure requirements and reconsider contribution rates after the city has committed $1.5 billion toward infrastructure. 

City Council members moved forward with the TIRZ after securing updated commitments from the site’s developer, including: 

• Broadening the Critical Water Quality Zone along the Colorado River shoreline.
• Expanding required open space throughout Dog’s Head. 
• Lowering the allowed impervious cover to 79% of the roughly 4-square-mile zone. 
• Enhancing flood control infrastructure for the watershed. 
• Following worker pay, safety and training standards backed by labor groups. 
• Funding a $100,000 Displacement and Needs Assessment for the area. 

Photo by Valentin Ivantsov from Pexels