Austin is in a housing crisis. The poor cannot afford rents that are the third-highest in Texas. Middle-income families must look to the suburbs for affordable housing. Within 10 years, the city will need 60,000 new housing units for low-income families, plus another 75,000 market-rate units, according to the city of Austin’s Strategic Housing Blueprint, which the City Council adopted last April.
What are city officials doing to address the crisis? Not much — other than adopting plans, creating task forces and recycling old ideas. Also, and paradoxically, many city actions have made housing even less affordable. Examples follow:
• Endless increases in city property taxes have driven up the cost of housing for all. The City Council raised taxes every year during the past 10 years and is poised to increase taxes yet again this month.
CONTINUING COVERAGE: Proposed Austin budget raises taxes, fees $178 for typical homeowner.
• Claims that relentless tax hikes are driven by population growth are political rhetoric. Though the city’s population has increased by 13 percent since 2011, property tax collections grew by 31 percent.
• High property taxes are perpetuated by the city’s tiny homestead exemption. Recently, the council “indefinitely postponed” an increase in the exemption from six to 14 percent because of the revenue “loss” that would result. More City Council spending trumped housing affordability. (Note: Travis County provides a 20-percent homestead exemption.)
• The City Council also rejected the use of property tax caps to bolster housing affordability. On a 6-5 vote, the City Council defeated a proposal to begin the annual budget process with a static, no-increase property tax rate. Concerns over limiting spending carried the day.
• Though they have little hands-on construction knowledge, city officials shun the builders and developers who hold the key to the affordable-housing kingdom. This is the reason there are no builders or developers on the City Council nor Zoning and Platting Commission. Also notable: The city has never hosted an inclusive meeting of the experts who actually put housing on the ground.
• Despite its urgency, the city is taking a leisurely approach to the housing crisis. CodeNext, which revises the city’s disjointed zoning regulations to incentivize housing construction, was completed last January, but the City Council approval won’t be until April 2018. Adopting administrative rules will add more delay as the housing crisis exacerbates.
• The city is doubling down on flawed affordable housing options that don’t work. A premier example is the city’s “density bonus” program, which grants zoning waivers to developers willing to fund low-income housing. Since 2007, the program has produced a miniscule average of 128 low-income units per year. Nevertheless, the program will be continued.
• Many in the housing industry say the city has the toughest anti-affordability development regulations in the state. Also, Austin’s development fees, which have almost doubled since 2012, are the highest in the state among major cities.
• Building homes is impossible in many areas due to minimum lot sizes and other restrictions that have been put in place over the years. Reforms have not been forthcoming.
• The City Council is unwilling to put meaningful fiscal skin in the affordable housing game, which is why fewer general fund dollars are spent on housing than on animal shelters. Instead, the city relies on no-cost federal housing tax credits and developer incentives.
• Ironically, neighborhood associations may undermine CodeNext, whose main purpose is to increase central city density. Fearing a wave of more people and more businesses, some groups are insisting that their areas be grandfathered out of CodeNext.
The City Council approved a housing master plan four months ago. Rather than waiting months or years to implement the plan, the council must commence a reregulation of its land development requirements. Per the plan, the council should enact a timely variety of simple changes, such as reducing parking requirements (at a savings of $20,000 to $30,000 per space), allowing smaller homes on smaller lots and allowing “granny flats” and other accessory dwelling units citywide.
Curiously, many of the reforms recommended in the master plan might be opposed by the same City Council members who adopted the targeted policies in the first place.
Brown is a governmental consultant who lives in West Lake Hills.