Poor tenants vs. development: Case microcosm of changing East Austin

Battle over site of Cactus Rose mobile home park highlights Austin’s affordability issues


For the past 3 1/2 years, Kerry Arrant has lived in the Cactus Rose Mobile Home Park in East Austin. His dwelling is a 1954 Spartan — a “stripped-out” mobile home he describes as “post-apocalypse-looking.”

In the mobile home park — off U.S. 183 near Vargas Street in the Montopolis area — Arrant is surrounded by residents who have lived there much longer. They are mostly Hispanic and non-English speaking — and they might not be living there much longer.

The Cactus Rose Mobile Home Park case is the latest battleground in Austin’s ongoing wave of development — a tide that has sometimes led to residents being forced to move from older residences to make way for new projects.

The owner of the 23 acres where the mobile home park now sits has filed for a zoning change with the city of Austin that, if approved, would allow developer Oden Hughes to build Lenox Oaks, a project with 356 apartments and 20,500 square feet of commercial space. Oden Hughes has a contract to buy the land from 500 Bastrop Highway Ltd., whose owners include Jimmy Nassour, an Austin lawyer and real estate investor.

The new development would displace more than 50 households — many families with children — who pay on average between $400 and $700 a month, not including utilities, to rent a space in the mobile home park, said Susana Almanza, a community activist who, as president of the Montopolis Neighborhood Association, has been working to help the residents.

The city’s Planning Commission heard testimony on the zoning case Feb. 2 but did not make a recommendation before sending it on to the City Council for consideration. The issue has not yet been placed on a City Council agenda, though it could come up in March.

Much of the displacement has taken place in East Austin, historically home to much of the city’s minority population. The area is rapidly gentrifying as development spills east of Interstate 35.

The displacement issue is a thorny one for a region facing growing affordability problems. Home prices in Central Texas have risen sharply in recent years as the supply of housing hasn’t kept up with demand that is being fueled in part by the region’s population growth, which includes a large influx of high-wage earners.

Developers have torn down many older apartment complexes — and some mobile home parks — to make way for new upscale projects, leaving the former tenants hard pressed to find shelter within their means.

With that scenario playing out with increasing frequency, the city of Austin is working to create an ordinance that would provide relocation assistance to tenants forced to move when apartments or other multifamily properties are torn down for redevelopment or renovated.

The ordinance could include assistance for temporary and emergency relocations that result from repairs or the need for residents to vacate a unit due to code violations. City staff members are due to present draft policy recommendations to the City Council on May 19.

‘A major hit to these families’

In the Cactus Rose case, the developer initially offered each household $1,000 to help residents relocate and has since offered additional financial assistance, though the amount has not been disclosed.

Mac McElwrath, managing director of Austin-based Oden Hughes, said the company has hired a third-party consultant experienced in handling mobile home relocations and the parties are moving toward a mutually agreed upon relocation plan.

“We intend to offer significant funds and assistance toward relocating residents affected by the future development,” McElwrath said. “We’re actively engaged with representatives of the neighborhood as well as residents themselves in identifying the right solution for all.”

Robert Doggett, a lawyer with Texas RioGrande Legal Aid Inc. who is representing the residents, said the $1,000 relocation payment offer was “not realistic at all given the situation here.” He said $10,000 per unit is more in the ballpark, because residents will be faced with “absorbing a fairly large increase in the cost of living.”

Doggett said many of the mobile homes are too dilapidated to be moved. And even if some could be moved, many mobile home parks only accept newer models, he and Almanza said.

Complicating matters is the “hodgepodge” of different situations for the residents, which “makes it harder to come up with a plan,” Doggett said.

“Most of the residents are looking at losing the asset that is their home,” Doggett said. “This is a major hit to these families.”

Doggett said he remains “confident they will make us an offer that involves a sum that would make a difference.”

Arrant, a 58-year-old handyman, pays $410 a month to rent a space at Cactus Rose, plus about $50 for utilities. He said he is ready to move and will land on his feet.

“I was raised in the backwoods, and I’m ready to move back into the woods myself anyway and go off the grid,” Arrant said.

Arrant said he is concerned that options are more limited for his neighbors, who include disabled people and residents whose RVs and mobile homes are in “various stages of disrepair.”

“We’re just one step above a mud hovel here,” Arrant said. “There’s all kinds of people in desperate straits here.”

Steve Portnoy, a representative of the landowners, said residents will be given “plenty of advance notification — certainly more than 30 days — to transition to a new location… and the owner has offered some monetary contribution to assist current residents in the relocation process.”

“Nobody’s going to have a surprise,” Portnoy said.

Asked what the plan is for the property should the City Council reject the zoning change, Portnoy said, “Undetermined, but the current use is not economically sustainable … and the site will be redeveloped.”

‘We need new housing’

Chito Vela, a member of the city of Austin’s Planning Commission, said the city needs to increase its housing supply to bring it more in line with demand and help ease rising housing costs. For that reason, he said, he supports the new units Oden Hughes would bring to market, but he also wants to protect the mobile home park residents.

McElwrath said rents for the new apartments are expected to range from $800 a month to $1,700 a month, depending on the type and size of the units. “Though this would be a market-rate community without subsidized affordable housing, it would be far more affordable than any recent or new market-rate multifamily developments in the East Riverside Corridor or comparable infill locations,” McElwrath said.

Vela said apartment units in those price ranges are much-needed in Austin.

“I don’t think there’s any question whatsoever that we need new housing of all types in Central Austin if we want to control rent prices,” Vela said. “Rents are too high.”

Although city staffers recommended approval of the zoning change for the Cactus Rose site, Vela said the Planning Commission fell short of the votes needed to recommend that the City Council approve the change because “we needed a more concrete agreement between the residents and the developer as to what was going to happen to the residents who were going to be displaced.”

Stephen Oliver, the Planning Commission’s chairman, said the Cactus Rose situation differs from many projects where market-rate housing has been proposed because there would be room to relocate the existing homes or residents on-site, “rather than displace them to the affordable suburban locations without access to transit and services that the current site offers.

Oliver said the commission supported additional density for a proposed project in South Austin a couple of years ago because of the developer’s plan to relocate existing tenants into the new apartments.

“I hope on-site relocation is more closely studied, because I think it is a strategy that can win over so many opponents to redevelopment in areas where we have some of our deepest levels of existing affordable housing,” Oliver said.

‘Still up in the air’

Lauren Avioli, a planner in the city’s Neighborhood Housing and Community Development department, said it’s too soon to say if the city’s relocation ordinance — if it is approved — would apply to mobile home parks. It also hasn’t been decided how it would work — whether the city or a developer would pay the stipend for relocation costs, or if it would be split between them.

“It’s still up in the air at this point who would be responsible,” Avioli said. She said many cities have ordinances that provide payment for “reasonable moving and relocation expenses.”

In Austin, she said, “everybody recognizes affordability is an issue and has been for some time. We need to continue the current programs and policies we have for affordable housing, such as down payment assistance and home repair, while also considering new ideas, such as these potential new tenant protections.”

Sabino “Pio” Renteria, the City Council member whose district includes Cactus Rose, echoed that and said he is working on initiatives “to address the underlying affordability issues that have become a crisis in our city.”

In the meantime, Renteria said he is working with the city manager’s office “to help provide relief for residents who are being displaced by looking into allocating a portion of the $740,000 Rental Assistance fund that the council approved during last year’s budget drafting process to help residents who find themselves in situations like this.”

“Tenant displacement affects families in a very disruptive and immediate way and places massive financial burdens on the backs of vulnerable communities,” Renteria said. “Unfortunately, this will remain a serious issue so long as our city continues to grow at this rate.”

Heather Way, a housing advocate and University of Texas law professor, directs a law clinic that in 2007 produced a report listing practices in the area of tenant displacement from rental properties.

Way said some states and cities have statutes that give mobile home tenants a right of first refusal to buy their mobile home park when it’s up for sale or undergoing a change in use. Another tool is relocation assistance to offset the cost of moving.

“This is a very important issue for Austin,” Way said. “Mobile home tenants are typically among the most vulnerable renters in our community. And without protections, many will face homelessness when they are evicted from their mobile home community.”

Dani Tristan, a commercial real estate broker with McAllister & Associates, said that although the city has a valid concern regarding affordable housing, “there is a companion concern, equally valid,” about improving and expanding the supply of housing in the part of town where Cactus Rose is, which he said has long been neglected.

“These situations will continue to come up as our city grows. These are called growing pains,” said Tristan, who is not involved with the Cactus Rose project. “In this case, there is an effort to pioneer upgraded housing that is close to schools and employment centers. The proposed project will also bring some new retail to an underserved area.”

If the city really wants to expand affordable housing options, Tristan said, it needs to consider options such as subsidizing land costs for more, newer and better mobile home parks and modular housing units, and dedicating future property tax revenue from projects like the one proposed for Cactus Rose to sustain affordable housing in the areas that undergo gentrification.

“The path forward is not to preserve 40- and 50-year-old dilapidated trailer homes on close-in land where there is demand for appropriate revitalization,” Tristan said. “Displacing 50 families to place 250 families seems like a no-brainer to me.”

Almanza, the neighborhood activist, said that the displacement issue is a moral one involving “equity, fairness and justice.”

“We’re supposed to care for the poor and most vulnerable,” Almanza said. “A lot of people are saying they don’t want Austin becoming a segregated city. There should be a place for everybody inside the urban core.”

Arrant, the Cactus Rose resident, said one of the biggest problems he and his neighbors are facing “is we don’t know where we’re going to go, and they haven’t told us when we need to move.”

“I’m not like the typical resident — I could drag my trailer away from here,” Arrant said. “Most people can’t. I’m not saying I’m going to be homeless, but I’m not saying I’m not going to be homeless either.”


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