breaking news

UT announces settlement amount in Bev Kearney discrimination case

How one Austin affordable housing district escaped Abbott’s veto


Highlights

City has one “homestead preservation district” in East Austin that puts tax dollars toward affordable housing.

Abbott vetoed HB 3281, which would have allowed Austin to expand taxation authority in three other districts.

Abbott said the bill would “stymie” the free market and exacerbate the city’s housing affordability problems.

Council Member Sabino “Pio” Renteria said veto was part of a “Trumpian tantrum” by Abbott.

Gov. Greg Abbott and his veto pen will not kill the city’s “homestead preservation district” program, city officials said. But the veto will keep it from growing.

Over the past few years, Austin has been working on establishing such districts to raise money for affordable housing in certain gentrifying areas. As the tax base in a district grows, the city puts a portion of the extra tax revenue toward repairing and building affordable housing in that district.

The first district the city created, covering about 4.5 square miles of East Austin, is expected to raise $240,000 for affordable housing this fiscal year, according to Greg Canally, the city’s chief financial officer. The City Council set the boundaries for three more districts in December 2015 but hasn’t yet set up the taxing component.

RELATED: Ten years later, homestead preservation districts still in flux

As Austin grew, however, there was a problem: The 2005 legislation allowing cities to create such districts limited this power to cities with fewer than 550,000 homes. Austin has outgrown that limit.

So state Rep. Eddie Rodriguez, D-Austin, who authored the 2005 legislation, passed a bill this session extending this power to cities with fewer than 800,000 homes, which would have allowed Austin to retain all of the original bill’s authority. To Rodriguez’s surprise, House Bill 3281 was among the 50 bills that Abbott vetoed Thursday.

“It’s Austin-bashing at its finest,” said Rodriguez, noting Abbott’s antipathy to various city policies and even the Austin air, which the governor recently said lacks “the smell of freedom.”

RELATED: Gov. Abbott: Austin stinks and so does ‘Sanctuary Sally’

“He has been very open to his disdain for Austin and his opposition to local control,” Rodriguez said.

In his veto message, Abbott said the bill would “stymie” the free market and exacerbate the city’s housing affordability problems.

“Directing large amounts of property tax revenue to select city projects has the effect of increasing the tax burden on other property owners,” Abbott said in a statement. “We should not empower cities to spend taxpayer money in a futile effort to hold back the free market.”

Council Member Sabino “Pio” Renteria, whose East Austin district has faced intense gentrification, pushed for expansion of the homestead preservation districts after joining the City Council in 2015. He said the bill’s veto was part of a “Trumpian tantrum” by Abbott.

Renteria said the governor “proved that he has a dangerous misunderstanding of basic housing policy and was unable to grasp the intent and mechanics of this program.”

RELATED: Austin mayor: Abbott’s call for special session is ‘a war against cities’

City officials say the fully established East Austin district — roughly bounded by Interstate 35, Lady Bird Lake, Springdale Road and Martin Luther King Jr. Boulevard — won’t be affected by the veto because it is grandfathered in. The city in 2015 estimated that area, which the city calls district A, could raise about $5.7 million over the next decade for affordable housing in that area.

That money represents 10 percent of the new property taxes generated by the growing tax base there. The revenue started flowing last year.

But the city won’t be able to do anything with districts B, C and D in Southeast, East and North Austin, as the council hadn’t yet set up the mechanism to channel some of the tax revenue toward affordable housing. Those zones didn’t meet the 2005 criteria for such a district, but Rodriguez’s bill this session would have fixed that.

State Sen. Kirk Watson, D-Austin, called the governor’s veto “petty politics.” Watson, who carried the homestead preservation district bill in the Senate, said Abbott staffers told his office that if a certain amendment preventing the city from capping property values was added in the Senate, the governor would support the bill.

“And even though we added that, the bill was still vetoed,” Watson said Friday.

RELATED: Gov. Abbott slams Austin as he talks up special session

HB 3281 was not without legislative opponents. It passed the Senate 23-8 and the House 123-20 in its final form.

“The homestead preservation district has been an important tool for Austin to help low-income residents of quickly gentrifying neighborhoods,” Watson said in an emailed statement. “While this veto is clearly designed to punish the city of Austin, the real effect is to punish families who are struggling to find affordable housing in their community.”



Reader Comments ...


Next Up in Politics

Trump speechwriter fired amid scrutiny of appearance with white nationalists
Trump speechwriter fired amid scrutiny of appearance with white nationalists

A White House speechwriter for President Donald Trump was terminated last week after revelations that he had spoken at a conference attended by well-known white nationalists, according to three people familiar with the decision who were not authorized to speak publicly.  Darren Beattie, who was a visiting instructor at Duke University before he...
McCarthy quietly wages the other midterm campaign - for House speaker
McCarthy quietly wages the other midterm campaign - for House speaker

House Majority Leader Kevin McCarthy is hardly the first politician with national aspirations to find himself flipping pork chops here at the Iowa State Fair. But it's the speaker's gavel, not the presidency, that has brought the California Republican to the Pork Tent.  Donning a red monogrammed apron and standing alongside Rep. David Young -...
Montana Gov. Steve Bullock, considering 2020 White House bid, now says he supports assault weapons ban
Montana Gov. Steve Bullock, considering 2020 White House bid, now says he supports assault weapons ban

Montana Gov. Steve Bullock said Sunday that he supports an assault weapons ban, in a signal that the moderate Democrat is seeking to appeal to progressives as he tests the waters of a potential 2020 White House bid.  "You know, I would, Jake," Bullock said when asked by CNN's Jake Tapper during an appearance on "State of the Union"...
Trump lashes out at Russia probe, compares it to McCarthyism
Trump lashes out at Russia probe, compares it to McCarthyism

President Donald Trump reacted angrily Sunday to a new report that the White House counsel has cooperated extensively in the Russia investigation without Trump's full knowledge, calling it a "Fake Story" and comparing the probe to McCarthyism.  In tweets, the president lashed out at a New York Times report that White House lawyer Donald...
Brennan says he’s willing to take Trump to court over security clearances
Brennan says he’s willing to take Trump to court over security clearances

Former CIA director John Brennan said Sunday that he is willing to take President Donald Trump to court to prevent other current and former officials from having their security clearances revoked, escalating a battle over whether the president is misusing the power of his office to retaliate against opponents.  "I am going to do whatever...
More Stories