Like Easton Park, the Grove might receive fee waivers on all homes

The developer of the $500 million Grove at Shoal Creek mixed-use project might be the first in Austin’s urban core to take advantage of a city program that allows for fee waivers on all housing units in a development so long as at least 5 percent of the ownership units are permanently affordable, a city official said.

Nothing is final, and it’s too soon to say how much money that could amount to. But waiving these fees would mean less revenue going to support expansions of Austin Water facilities and services by the city’s Development Services Department – though Austin-based ARG Bull Creek Ltd., the Grove developer, says the waivers are necessary to achieve affordable housing in a desirable area.

ARG Bull Creek has committed to making 5 percent of the condos at the 75-acre development affordable to households at or below 80 percent of the area median family income, as well as making 10 percent of the rental units affordable to households at or below 60 percent of the area median family income.

The affordable-rate condos at the closely watched development near Bull Creek Road and 45th Street would range from $160,000 to $200,000, while rentals would start at $753 for a one-bedroom unit to $967 for a three-bedroom unit, ARG Bull Creek said.

The affordable housing plan at the Grove bears some resemblance to the controversial agreement the Austin City Council approved a few months ago for the Easton Park development, also known as Pilot Knob, in southeastern Austin — but there’s at least one key difference.

The Easton Park developer, who is likewise eligible for fee waivers on all roughly 9,500 housing units, agreed to put an amount of money equal to the estimated $69.3 million in waivers over a couple of decades into a fund that could pay for affordable housing.

ARG Bull Creek would keep the savings from not having to pay the city fees, which company owner Garrett Martin noted is typically how the SMART Housing program works. The Grove would also have far fewer units, up to about 1,500 housing units, though the developer doubts that many will materialize.

Martin also said the Grove will be located in neighborhoods where the cost to build is more expensive than around Easton Park. The median home price around the Grove was about $544,870 while it was $168,000 around Easton Park as of the 2010 census, Martin said.

City staffers asked if ARG Bull Creek would consider an affordable housing deal just like Easton Park’s, but Martin said he told them no because of the differences between the two developments.

The developer last year announced a commitment to build more than 180 affordable units at the Grove in a move meant to avoid drawn-out tangling with the council on the amount of development that would trigger a requirement to provide such units. ARG Bull Creek has been “massaging and finessing the commitment for quite some time now,” Martin said.

ARG Bull Creek would make the condos affordable through a community land trust, though it is still figuring out how that trust would work, Martin said. A traditional land trust owns the land under a home, while a family owns the home itself. But with condos, a family owns the unit and has an “undivided interest in a portion of the land,” Martin said.

Rental units would be affordable for decades through deed restrictions, Martin said.

Martin said ARG Bull Creek is looking to partner with developers who build publicly subsidized housing, which would allow some of the Grove’s housing units to be affordable to families making as little as 30 percent of the area median family income.

The amount of affordable housing at the Grove would be in the proposed zoning ordinance for the “planned unit development” — typically a large, master-planned community — and thus subject to change by a city commission or the City Council, said Gina Copic, the city’s real estate and development manager. The city can certify the Grove for the SMART Housing program so long as the development meets certain affordability thresholds and other requirements, Copic said.

“It’s an important site and could provide some meaningful affordability in the central city in a really high-opportunity area and also be able to serve folks that work in that area,” Copic said.

Council Member Leslie Pool, whose District 7 borders the Grove site, said ARG Bull Creek should make at least 30 percent of the housing affordable. Pool echoed comments she made about Easton Park, saying she has “serious reservations over allowing waivers on market rate housing.” The issue has prompted questions from some council members about whether and when the city should allow fee waivers on all units, including market-rate ones.

Council Member Sheri Gallo, whose District 10 includes The Grove, didn’t immediately respond to a request for comment.

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