In early December, the city council of Austin, Texas, adopted an exhaustive downtown plan that will guide every element of the neighborhood's transformation over the next 25 years, from its historic preservation policies to investments in workforce housing to parking and transit infrastructure. Amid all of those potentially touchy topics, though, the loudest row grew out of one program sketched on just five pages of the full 183-page document.

It is the city's new Bonus Density Program. With it, downtown Austin could become both a residential and economic epicenter of the city, a dense and diverse 21st century neighborhood with renewed parks, new businesses and more affordable housing – all if the community will just let developers there build taller buildings.

"It by far drew the most discussion and angst and tension of any element of the downtown plan," says Jim Robertson, one of the plan's co-project managers. "In some ways, that's because of this fundamental question: If a community on the one hand places a high priority on becoming compact and dense and tall and vibrant, but on the other hand, has either restrictions in place or believes some restrictions are appropriate, how do you reconcile those two?"

Density is supposed to be the answer to a whole range of urban challenges, to how cities can become more prosperous, more environmentally sustainable, more livable and more productive. In a denser urban world, people will walk to work, clearing up traffic congestion. That time commuters spent in their cars they can instead spend with their families. Now they're happier. And with all these happy people living in such close proximity to each other, dense communities can support more retail, more restaurants, more transit, more tax base, all of which serves to attract yet more people and businesses.

But how do you grow denser if you can't grow up? At a certain point – whether it's in downtown Austin or near a suburban Boston transit station – communities will exhaust the real estate that exists below building height limits imposed years ago for safety, continuity or aesthetics. And then what? Will people let go of these rules?

As with many of today's urban quandaries, we can blame this one at least in part on urban renewal, a moment in city planning history best associated with hideous mega-block, super-tower public housing projects.

"The urban renewal era left people in many cities with a profound fear – more than resentment – but fear of tall buildings as being ugly, as symbols of the displacement of traditional neighborhoods, as generators of traffic and crowding," says David Dixon, the principal-in-charge of planning and urban design at the Boston firm Goody Clancy.

Height restrictions exist in multiple forms in cities across the world. Paris long lived under one, producing the odd sight of an old, low-lying European city with an American-style downtown at its edge. Washington, D.C., has a particularly draconian limit that tops out at 130 feet. Other cities have baked into their zoning codes "floor area ratio" requirements that peg a building's total square footage to the size of the parcel on which it sits, effectively limiting height.

"The restrictions are ubiquitous," Dixon says. His practice works particularly with dense and transit-oriented development. "We're often dealing with 'what height is workable here?' And it's often a long, hard discussion about buildings sometimes over five floors, sometimes over 12 floors."

Thanks to those urban renewal-era fears, the reasons why communities cling to height restrictions are not necessarily the same reasons they were created in the first place. The District of Columbia's height limits, wonderfully chronicled by Washington City Paper's Lydia DePillis, in fact originally had more to do with the size of old fire-fighting equipment than the city's now-famous sight lines.

Over time, though, the restrictions have been largely responsible for making the city look as it does today, and for that reason, many locals cherish the old law. Architect Roger Lewis suspects some people, particularly the city's older residents by a fear that tall buildings will bring a flood of new residents unlike themselves. "There's no question that there's a socioeconomic motive," he says, "although it's not always stated explicitly by the opponents that this underlies their worries."

Strong local support for keeping the restrictions, though, is directly at odds with other forces shaping the nation's capital. As job growth in D.C. is projected to outpace most other cities in the U.S., the population will only continue to grow.

"There's a diminishing supply of developable land and real estate on which to build new places for people to live and work," says Lewis, a professor emeritus at the University of Maryland School of Architecture, Planning and Preservation. "Looking ahead into the future, where do you grow if you're going to continue to have growth, if people want to continue to live in D.C.? Where are they going to live?"

They will live across the river in Arlington, if they have to, which is great for Northern Virginia but bad for the District itself. Across the country, what will be needed to satisfy this coming influx of city-dwellers isn't necessarily tall new office buildings, but tall new homes. The service economy that once filled office towers in cities like Chicago has now stalled.

"We probably have most of the office towers we're going to have in these cities for a while," Dixon says. The real need is for housing, a fact cities like Washington should note. "If you're not embracing density and amenity and walkability," Dixon says, "you're basically walking away from the only growing portion of the housing market."

In Austin, Robertson estimates, only two significant downtown office buildings have gone up over the last 10 to 12 years. But about 10 residential buildings have. In a decade, 6,000 new residents have moved downtown, and for the first time demand has started to build there to push the zoning limits.

The central business district has no height limit but a floor area ratio of 8:1, meaning that a building that takes up an entire parcel of land could rise eight floors, while one that sits on just half of that land could rise 16. The city council has the power to grant developers exceptions, but the process is not exactly ideal.

"In some ways, a deal is being made," Robertson says. A developer wants to, say, double the FAR, and the city wants maybe a new park. "Then there's some negotiating and hemming and hawing."

Of course, none of this is very transparent, or predictable. In the new downtown Austin plan, the city decided it didn't want to dramatically alter the zoning code, even as it aims for greater density. But it has essentially formalized those ad-hoc negotiations, creating a system by which developers can earn "bonus density" on top of the current restrictions in exchange for specific community benefits. Developers must either include some affordable housing or contribute to an affordable housing fund. In addition, they can choose from several other options to gain more height that include creating publicly accessible open space, child or elder care or cultural venues.

If this sounds like a quid pro quo – well, that's basically what it is.

"Some people say 'you're penalizing density, and isn't density what we want downtown?'" Robertson says. The downtown business alliance, for one, has made this argument. "Why are you proposing to extract additional community benefits from a project that wants to be higher or taller, because isn't density in and of itself a community goal and a benefit to our community?"

In the abstract, Robertson admits, these people are right. But the city has limited resources to pay for things like new sidewalks and better parks. And this system can help fund some of that. In another sense, denser, taller development also imposes costs on communities (services used, rents driven up, sunlight blotted out). And these community benefits are a way of paying for those burdens. It's a "fairness question," Robertson says. The benefits can help sell skeptical residents on the idea of greater height and density – which is what the developers want, too.

Other cities, including Seattle and Portland, have established similar programs. A central piece of the idea's success is that cities ask for something, but not everything. Demand a million dollars for an affordable housing fund when the developer is only going to profit a million dollars from adding five more floors of apartments, and the whole concept collapses. Developers still have to make money.

"Otherwise, they won't do it," Robertson says, "and we won't get the very thing we want, which is [to go] denser and taller."

It's worth noting that none of these people are talking about building tall everywhere. Serious density advocates don't want to put skyscrapers next to scenic parkways, or mega-projects amid bungalows. As in Austin, city planners are focusing on the downtown. Today, it looks like this:

By 2039, parcels that could be redeveloped for greater density could transform the area into this:

Elsewhere, residential communities immediately around transit stops are prime places to build up. These are also the places where people are clamoring to live, and where that demand makes costly, taller projects feasible to build in the first place. Until the supply in these places comes more in line with demand, these types of walkable neighborhoods will remain affordable only for the most affluent, and that's not good for a community, either.

Dixon offers one other suggestion for where to look: Put density wherever you don't like what you currently have, whether that's older strip retail, surface parking or brownfields. Beyond location, the other key to making denser development palatable is of course to ensure that it's not awful.

"What I've found is that what people envision has nothing to do with the reality," Lewis says. "What they envision is ugly buildings, more traffic."

This sounds counter-intuitive, but taller buildings that are part of a walkable, transit-oriented community can actually help ease congestion. And there's no reason for these places to be ugly. Tall buildings that make the best neighbors don't feel like tall buildings at street level. They're wrapped there in lively retail, townhouse fronts or inviting public space. Take an intersection like this at Kendall Square in Cambridge, Massachusetts:

And it could look instead like this:

Courtesy Goody Clancy

The parallel argument, in a place like D.C., is that buildings strictly limited by height can be architecturally dull, too. There's not much you can do with the geometry of a building that has a floor area ratio of 6:1 and a code requiring 15 percent of the parcel remain open to the sky.

"Immediately, it creates a box with a courtyard in it, before you even start drawing anything," Lewis says. Washington is covered in such boxes. "When you look at some of the wonderful examples of tall urban development like Rockefeller Center in New York, you can't do that in D.C."

Plenty of people in D.C. will probably insist they don't want their own Rockefeller Center. But they surely want a lot of the other things that can come with density: the tax proceeds, the efficient transit, the jobs. One day, they may not be able to have all of that, and the historic height limit, too.

"Communities are increasingly aware that the costs they perceive are less a concern than they imaged," Dixon says, "and the benefits are greater than they imagined."