Next month, the Austin City Council will consider proposals that would significantly change the rules for building downtown, requiring developers who want to build taller, larger buildings than city rules allow to offer in return specific public benefits, such as park space, live music venues or affordable housing.

Currently, developers can request variances to zoning rules, and the city decides on a case-by-case basis. Developers seeking more square footage or height for their projects are expected, although not required, to offer something in exchange — such as building a park nearby or setting aside some of the housing for people who make less than the area's median income.

Some other cities have adopted formal versions of these tradeoffs, called density bonuses. Austin City Council Member Chris Riley said they have worked well in places such as Vancouver, British Columbia, and Seattle.

Now, with Austin's skyline being reshaped by ever-taller high-rises, some city leaders say Austin needs such a program, too.

City leaders say they want to encourage even more density in certain parts of downtown — to generate jobs and tax revenue and counter sprawl — while adding amenities as downtown becomes a vertical neighborhood as well as a place to work.

We want height, but we want height that is supported by other amenities that people need to have a high quality of life living downtown, said Council Member Randi Shade. We're trying to incentivize a vibrant, active, urban core. We're trying to find the balance ... between density, amenities and cost.

But some developers say the plan is shortsighted. Adding costs to their projects, they say, will result in fewer, and smaller, projects getting built, countering the goal of a denser downtown.

A density bonus acts like a tax on downtown property owners, said Taylor Andrews, co-developer of the 360 condominium high-rise on Nueces Street. A developer increases sales prices or rents to pay additional municipal fees. If the market will not bear higher sales prices or rents, a developer will not build a project. So the effect of density bonuses right now could mean stopping downtown development.

Instead, Andrews said, the city could achieve the public benefits included in the program outlines by using tax revenue generated downtown. He said most of that revenue is now being spent outside of downtown.

The city asked the ROMA Austin consulting firm to come up with the proposals as part of developing a downtown master plan. ROMA consultants have been working for a year on a plan, talking to developers, property owners, neighborhood and historic preservation groups, and cities that have density plans.

Jim Adams, a principal with ROMA, said the plan will create a more predictable and transparent way for developers to attain additional density.

Adams said the public benefits as proposed would not be cost-prohibitive for developers or deter them from building denser projects.

We are trying to make sure that any community benefit we ask for does not unduly penalize a developer or property owner for achieving additional density, Adams said.

An Oct. 15 council vote would start the process of turning the recommendations into city codes and ordinances. Over the next six to nine months, the public, developers, various city commissions and boards, and business owners and others with an interest in downtown will have a chance to weigh in on the plan.

The plan would not alter the restrictions that protect views of the Capitol or the restrictions for designated areas such as the East Sixth Street entertainment district.

Under the proposal, developers of condominium or apartment projects who want additional height or space would have to rent or sell some units at below-market rates or pay a fee that the city would use to build more moderately priced housing in or near downtown.

To earn even more height or building area, developers could provide other public benefits from a menu of choices, including creating public open space or including on-site child care or elder care or a live music or cultural venue.

Developers of hotels and office buildings could qualify for up to 50 percent more space without having to provide extra public benefits, because their projects create downtown jobs and tax revenue. If they want to exceed that number, they would have to provide some of the public benefits.

Some areas of downtown, including its centermost core, would have no height limits.

A 45-foot height limit would be set in the Warehouse District area to preserve the character of an entertainment district that has mostly two-story older buildings.

And no bonuses would be available in much of northwest downtown, which includes residential neighborhoods and streets lined with historic homes.

Austin is growing, and vertical density downtown makes some sense in terms of traffic and pollution, as long as we can save the good parts of downtown, said Jay Tassin, a member of the Judges' Hill Neighborhood Association, which represents an area south of MLK Jr. Boulevard, north of 15th Street and east of Lamar Boulevard.

The proposal also includes incentives to encourage more housing within the reach of middle-income families.

But Jeff Jack, a longtime Austin neighborhood advocate, said those bonus plan provisions are insufficient.

Developers could pay $5 or $10 for each additional square foot of space they want, money the city would use to build or provide moderate-priced housing in or within two miles of downtown.

Jack said the fee amounts to chump change and is nowhere near the amount necessary to pay for other housing.

Larry Warshaw, a developer of the Spring condominium tower on West Third Street, said the plan requires developers to spend more to create projects that already are adding tax revenue and other benefits downtown.

The conversation in Austin has been What can we extract from these developments in exchange for more density? Warshaw said. Instead, given all the positive benefits, I think the city should be saying, What can we do to help and encourage more density downtown? This is even more true now that we are in a downturn and obtaining financing for downtown projects is going to be much harder in the future.

Before Spring was built, the site generated $38,000 per year in tax revenue, Warshaw said. Going forward, the project will generate more than $2.5 million in annual tax revenue, he said.

Council Member Bill Spelman said he thinks that the council needs to review and discuss the details of the proposal more carefully, but said: The basic ideas behind the density bonus proposal are very reasonable. I think it will certainly help because one thing we keep hearing from developers and builders is, We don't know what the rules are. This will stabilize the process.

Responding to Warshaw's concerns, Spelman said: I think we will know in a couple of years whether it's working. If Larry is right and the density bonuses are needlessly restrictive, we can always change them.