For those of us who have taken big, expensive steps in life, such as having a child or taking out a loan to buy a home or go to college, the dizzying shock of uncertainty as you ask yourself what you got yourself into is all too familiar. Many are now experiencing similar doubts upon learning of the $50-plus-million affordable housing deal at the Pilot Knob development. Worse yet, many people in our community, not to mention on the city council, are now saying they weren’t fully aware of the details of what was probably the biggest SMART Housing deal ever done in Austin. To those people, I have a simple message: I get it.
I led the negotiations for the Mayor’s Office on Pilot Knob, and I’ll admit we did a poor job in taking the time to explain this deal to the rest of the city council and the public. I wish we had, because as you’ll see below this investment will deliver a great return to taxpayers on one of our top priorities. The simple fact is the developer, Brookfield Residential, will pay $50 million that the city will use to create more affordable housing where we need it and at a time that it is desperately needed.
Still — and I want this to be crystal clear — everyone should know that the city council can now or at any time in the future undo the deal if it wants. Additionally, the developer has assured us that if we don’t want to purchase these lots at discount prices because we’d rather use the money for the water utility, Brookfield would be only too happy to sell them to other people at market rates.
What has some people upset is the price tag. Make no mistake, it’s a big deal. There’s no way to make $50 million sound like a small amount, and no one should, but this deal more than “pencils out” for the people of Austin:
First, we got a lot of affordable housing at below-market prices, including 650 permanently affordable homes for sale that will help more families become homeowners. Also, we will get 10 percent of all rental units (estimated to be as much as 350) that will be kept affordable for 40 years.
Second, Brookfield will put an additional amount of up to $6 million into affordable housing which may be used for additional affordable units at Pilot Knob, buying down prices so they can be sold or rented to families with lower incomes, down payment assistance, and other affordability programs. Normally, we wouldn’t get this.
Third, Brookfield is providing 10 acres (valued around $2.5 million) for a transit center, so we’re not just addressing affordability but mobility.
Fourth — and this is also unusual — Brookfield is paying for around $30 million in water and wastewater infrastructure. Had the developer not agreed to pay for this infrastructure, likely the water utility would have had to.
Had we not negotiated this affordable housing deal, the $50 million in developer fees would have gone primarily into the water utility’s account. Instead, this money is going where Austin needs it most. As the mayor has said — and most of us have felt personally — Austin has an affordability crisis. That $50 million will build affordable housing that will serve our community for generations to come — and that’s not even counting all the extras in this deal.
After totaling up the plusses and minuses, the question isn’t whether we should undo this deal but whether we should do a lot more of them. Great cities do big things, but it’s natural for a deal of this magnitude to give one pause. Next time, of course, we’ll do a better job of explaining the deal, and that feeling of uncertainty will be replaced with the calm confidence of knowing that we’re spending money wisely on your top priorities.
Cortz is chief of staff for Austin Mayor Steve Adler.