Austin leaders weigh how to keep proposed affordable homes low-cost

City officials are still working on a problem they thought they solved a year ago: How can Austin ensure the affordable homes in the Easton Park development at Pilot Knob remain affordable?

After a judge last month invalidated the December vote on the project, finding the public didn’t have proper notice about the millions of dollars in fee waivers at stake, City Council members this week took the first steps toward putting the project back on track. They voted Thursday to redo a public utility district for the Southeast Austin development, where construction is well underway.

But the portion of the former agreement that involved waiving fees to make housing permanently affordable is awaiting further staff review — and could take a new form.

Brian Rodgers, a local civic activist, sued the city in February, upset that council members agreed to waive as much as $80 million in water utility and development review fees for Easton Park without the meeting agenda saying so. The meeting notice mentioned only a zoning change.

Under the original deal, the city would waive the fees in exchange for the developer putting an equal amount of money toward housing that was permanently affordable, not just on its first sale.

The development is planned to be built out over 30 years to include a total of 6,500 single-family homes and 1,500 apartments.

Rodgers’ attorney, former Travis County Judge Bill Aleshire, offered to drop the suit if council members would agree to vote again on the measures and include more detailed wording in future agenda items. The city passed on that and the matter went to court, where a judge ruled Oct. 14 that leaders had violated the Open Meetings Act.

“Unfortunate, however, there are lessons that should be learned about how business should be facilitated in a council/manager form of government,” former City Manager Marc Ott wrote in an email to Mayor Steve Adler the day after the judge’s ruling.

Adler and Council Member Delia Garza, whose staffs orchestrated the original deal, called a revote merely a matter of housekeeping, and said the affordable housing policy wouldn’t change. Rodgers and Aleshire said they would sue again if it didn’t. Part of their argument involved the claim that state law didn’t allow the city to waive fees on the whole development, but the court’s striking down of the initial vote made that portion of their first lawsuit moot.

Existing agreements with the developer require that at least 10 percent of housing in the development be affordable — but only when it is initially sold. The fee waivers would have provided funding to keep those units affordable in perpetuity.

Last month, city staffers went back and forth with developers to create an affordable housing agreement, indicating they wanted it finalized as quickly as possible.

Adler proposed pulling out the fee waiver provisions and sending them back to the staff.

“To see if there’s something we can do that would pass muster,” he said. “Some questions that have been raised go beyond Pilot Knob and, rather than reacting quickly, I think we should take a more measured approach.”

Aleshire praised that move Friday, saying, “I’m glad we don’t have to go back and fight.”

Richard Suttle, an attorney for developer Carma Easton who’s been involved in negotiations, said he believes there are mechanisms to use fee waivers to make the housing permanently affordable, but lawyers are still researching how to best do that. All options are still on the table, he said.

Council Member Greg Casar said he appreciated buying time to talk about the housing components of the agreement.

“(The deal) represents tens of millions of dollars in affordable housing opportunities, not just at Pilot Knob, but all over the city, and I would like for us to figure out the best ways to still achieve that,” he said. “That does cost money, or require creative solutions.”

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