Officials: Hastening Onion Creek buyouts could cost up to $10 million

Austin officials said Wednesday it could cost $6 million to $10 million more to speed up the buyouts of remaining homes in the Onion Creek flood plain.

With that money, officials said, they could make offers in the next six months to buy houses in the 100-year flood plain, which has a 1 percent chance of flooding each year, and to pay an additional sum that would help residents relocate to another home.

It would otherwise take about a year to make those offers, officials said.

The City Council’s four-member Public Utilities Committee heard this information at its Wednesday meeting — about a month and a half after flooding devastated some Southeast Austin neighborhoods for the second time in two years — but took no action.

The extra expense to accelerate buyouts, which would be on top of the roughly $61.5 million budget the city has to acquire 232 homes, stems from Austin’s tight housing market, said Alex Gale, assistant director in the city’s Office of Real Estate Services.

The city had budgeted about $250,000 per home. Of that, about $200,000 is for acquiring the house in the flood plain and providing relocation assistance, with the rest for costs such as demolition and appraisal, officials said.

There are 204 properties still in the flood plain the city is trying to acquire, but Gale said as of last week there were only nine homes in the Austin school district for sale for less than $220,000.

And a downside of moving to a more expensive home is that residents have to pay more in property taxes, Gale said. The typical Onion Creek home is worth $125,000, he said.

Though there are more homes at lower prices in suburbs such as Buda and Kyle, Gale said the city currently only searches for “comparable” properties of about the same size and close to similar amenities within 10 miles of the Onion Creek area.

The city tries to search for comparable homes $200,000 or lower, meaning households usually receive up to $200,000 for the purchase of their home and relocation assistance.

Gale said the city could expand where it searches for comparable homes, but cautioned that could lead to higher number of appeals or rejections of buyout offers.

Council Member Delia Garza, who represents the Southeast Austin District 2 that contains neighborhoods next to Onion Creek, said her office would work on finding “creative solutions.”

“I want to get these folks out of harm’s way as soon as possible,” Garza said. She also said she’s worried about legal liability if the city changes the way buyouts work partway through.

Stuart Hersh, a retired city employee who spoke to the committee Wednesday, said the city is more focused on complying with federal restrictions it’s not required to abide by, rather than opening up a conversation with Onion Creek residents about the housing they can afford.

“We’re artificially constraining ourselves in ways that make no sense at all,” Hersh said.

Joseph Peña, who lives near Onion Creek, is frustrated by how long the city’s taken to buy out his neighbors and him. The city contacted him to begin the buyout process in August, he said.

Peña said the city offered him about $151,000 for his house and about an additional $41,000 in relocation assistance. He said he thought the offer would be higher, as he spent $72,000 fixing his house after the 2013 Halloween flood, including about $50,000 paid by flood insurance and $22,000 out of his own pocket.

Onion Creek runs behind his house, Peña said.

“They should have bought the houses closest to the creek first,” Pena said. “That’s just common sense.”

At its Thursday meeting, the City Council will consider a resolution asking the Travis Central Appraisal District to reappraise properties damaged in this year’s flooding. Ed Van Eenoo, a deputy chief financial officer with the city, said the city is still working on a list of properties but has about 450 right now.

The resolution means the affected property owners would have lower payments for the 2015 tax bill in the months of November and December because of their properties’ lower, post-flood values. Though the resolution only affects the city portion of the tax bill, Van Eenoo said both Travis County and the Austin school district have approved similar measures.

Correction: This story has been updated to correct the amount of money budgeted per home. Austin officials initially said they set aside $220,000 for acquiring and providing relocation benefits to each home, but clarified Thursday that they actually budgeted $200,000 per home.

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