Without Dukes’ support, county to lose out on affordable housing funds

Updated March 07, 2017
Travis County plans to build affordable housing and more offices next to its existing offices on Airport Boulevard, but expects to miss out on the affordable housing tax credits it hoped to receive.

A proposed Travis County affordable housing project in North Austin has hit an $8 million roadblock.

Officials had hoped to secure that amount in tax credits for affordable housing in a mixed-use development on county-owned land. The proposed complex on Airport Boulevard, which would be built next to the existing offices for the county clerk and other departments, would include more offices as well as 145 apartments, with 122 designated for low-income residents.

But officials say that the county is now unlikely to secure those tax credits, mainly because its application lacks a letter of support from state Rep. Dawnna Dukes, D-Austin, whose district includes the site.

County Judge Sarah Eckhardt first hinted at the anticipated loss of the tax credits in her State of the County speech last Wednesday, calling it a “serious but temporary setback.”

Eckhardt said in an interview that the tipping point was the lack of a letter from Dukes, who instead wrote a letter for a 132-unit affordable housing project proposed by nonprofit Foundation Communities within the Mueller development.

The state awards the federal tax credits to projects based on a points system. A letter of support from a state representative is worth up to eight points.

And, under state law, only one of these two projects could get the tax credits, since the projects are within two miles of each other.

A call to ‘level the playing field’

Dukes said she wrote the letter for the Foundation Communities project because she believed strongly in it, and the nonprofit had spent more than eight months informing her about it.

“I will only support a project after thoroughly vetting it,” Dukes said.

County officials didn’t reach out to her until shortly before the letter was due, Dukes added.

JoEllen Smith, executive vice president of DMA Development Co., the developer for the housing portion of the county project, said representatives had reached out to Dukes’ office in January and February but never received an official response. (During that period, Dukes was indicted on corruption charges and was marked absent marked absent 15 times and late seven times in the first 28 days of the legislative session.)

County Commissioner Jeff Travillion said he had a conversation with Dukes days before the application was due and “explained the value of the project” but respected her ultimate decision.

Then the night before the deadline, Dukes said, she received a “stronghanded” voicemail in which Eckhardt urged her to “keep the playing field level” by writing letters for both projects.

“I am hoping for the best,” Eckhardt said in the voicemail message, which was played for the American-Statesman. “If it doesn’t work out, I do want to let you know that I’ll have to bring an item to Commissioners Court to explain to the rest of the court why our project didn’t make (receive funding), and I just wanted to be transparent about that.”

Eckhardt told the Statesman that she “just wanted to give (Dukes) the head’s up about (the Commissioners Court briefing) because it could be public in nature.”

But Dukes said she could “read through the lingo” on what Eckhardt meant by the voicemail.

“I’ve never had anyone call me to (suggest) that it will be presented as your fault if you don’t do what I’m requesting,” Dukes said.

One letter made the difference

The county has been working on a plan, under a proposed long-term lease with developers, to build housing and more offices at the county’s North Campus offices at 5325 and 5335 Airport Blvd.

Staffers from the Department of Health and Human Services and district clerk’s passport office, who currently work downtown, would move into the added office space.

Most of the housing units would go to people making 30 percent to 60 percent of the median family income.

Foundation Communities has been planning a project in Mueller that would feature 132 units for those making about 50 to 60 percent of the median family income and a learning center with after-school and health programming, Executive Director Walter Moreau said. Fourteen of the units will go to families who are homeless or at risk of homelessness as part of a supportive housing program.

Without counting points for a representative’s letter, Foundation Communities self-scored 123 points on its application, and the county self-scored 117, according to state records. So the added points from Dukes’ letter could have made the difference for the county.

“We’re excited about being able to serve families at Mueller,” said Moreau, who reached out last summer to Dukes for her support. “That’s really our focus and mission and our local track record, and we’re really grateful to Rep. Dukes for taking the time to evaluate the opportunity.” He added that “the situation with the county is unfortunate.”

Dukes said she chose to write the letter in part because the Mueller project resonated with her as an East Austin native who is familiar with the goals of the community.

“The city manager at the time negotiated and envisioned that minorities who had lived in the shadow of the airport would have opportunities within the 700-acre redevelopment,” Dukes said. “And the integration was supposed to occur. Now it’s been, what, 10 years or more? And the residential elements of that have much room for improvement.”

She also frowned on the idea of writing two letters, knowing only one project can win funding.

“Sometimes you need to make a decision,” Dukes said.

Searching for more funding

In a briefing to the Commissioners Court on Tuesday, staffers said the county and its developers will seek out a smaller low-income housing tax credit that is guaranteed, not competitive, and look for other funds.

Officials acknowledged that less funding could mean more of the affordable units would go to people making 60 percent of the median family income than 30 percent of the median family income.

At Tuesday’s meeting, Eckhardt reminded commissioners that the county recently did a survey of its properties to identify opportunities for similar affordable housing projects. “This isn’t the last time we’re going to do this,” she said.

“It’s just a lesson learned,” Commissioner Margaret Gómez said.