The Travis County Commissioners Court may consider changes to the county's affordable housing program to encourage home developers to make major rent cuts in exchange for property tax breaks.
Commissioner Brigid Shea proposed future changes when Commissioners discussed two public-private housing partnerships at their June 29 meeting. Both proposals were postponed to Tuesday's meeting.
The Dallas-based Developer Bureau's proposals include the Edison Apartments and the River Park / Block 15 Apartments at 4711 and 4700 E. Riverside, respectively; both are part of an extensive multipurpose development. The property on River Park is currently the Tempo at Riverside Apartments, formerly the Ballpark South Student Apartments.
In order to achieve a reduction in property tax for the two developments, the Bureau has proposed making a range of units available for households with incomes between 30 and 60 percent of the region's median income, with the majority of the affordable units earmarked for higher-income households is, the income ranges achieve between 80 percent and 120 percent AMI. According to calculations for Austin and Travis Counties for 2020, the AMI for a family of four is $ 97,600.
The county has approved a handful of similar shared apartments, but housing advocates claim taxpayers are losing out. Heather Way, UT law professor and advocate for affordable housing, has been following this national trend closely since 2015, the year that an eleventh hour was added to a bill to update state finance laws. The change paved the way for an explosion of public-private housing offers in Houston and San Antonio and smaller towns with generous property tax exemptions for property developers.
Way was the lead author of a 2020 UT report examining this practice. "While the exemption received little attention from the Texas legislature in 2015, the use of this exemption is growing rapidly, offering home developers annual property tax breaks averaging nearly $ 1 million per property," the report said.
Travis County Housing Finance Corporation doesn't rely on the 2015 loophole in its partnerships, but Way and other housing advocates say the benefits for housing developers far outweigh rental disruptions for tenants.
Both Way and Walter Moreau, executive directors of the nonprofit Foundation Communities, acknowledge that these types of partnerships are largely uncharted territory for Travis County, which began with cases like this only a few years ago.
At the June 29 commissioners' meeting, Shea had the most to say about the proposals: “We need to send a clear message to developers – the rental savings need to be greater. This is something of tremendous value that we add by giving developers a full tax exemption. "
Urged by advocates of affordable housing, Shea suggested that the county begin submitting quotes, which would result in a more competitive process that could deliver more affordable housing units. Commissioners Margaret Gómez and Jeff Travillion also expressed an interest in moving in this direction.
On behalf of the Bureau, Austin attorney Michael Whellan agreed that while an RFP process is a great idea, the Bureau's proposal would easily compete with what many other developers could offer. “The difference here is location, location, location. And given this particular location and the ability to place the flag with 600 affordable units, this particular project is different from anything else you will see given its location on a railroad line and an HEB right across the street, ”he said. "It seems to hit what is on your list of guidelines for affordable housing, especially for workers' housing for teachers and firefighters who, given the starting salaries for those positions, would all qualify for housing."
Commissioner Ann Howard also expressed a desire to secure more affordable housing through the Bureau's partnerships. At the same time, Howard praised the Presidium for fulfilling its obligation to ECHO (Ending Community Homelessness Coalition) in 2019 and making some of its existing housing units available for unoccupied people. "Many, many people who have been homeless … have actually found rental apartments through the promise made by the Bureau a few years ago," she said.
However, Way remains skeptical of the affordability angle the Bureau is pursuing. “The county can and should get a lot more affordable units at the two locations,” she said. “The combined property tax exemption for these two properties is nearly $ 4 million per year, with a monthly tax subsidy of more than $ 300,000. But only 35 of the 354 units at the Edison will have rents affordable to renters under $ 53,000, and only six of those units will be available to families with children on that income. "
Way found that the greatest need for affordable housing in the community is 60 percent AMI and below, or $ 53,000 for a three-person household. "But the majority of the tax-subsidized units in the two properties are for renters who earn 80 to 120 percent of the median income in the area," said Way. "Even a teacher who is starting out cannot afford these so-called workers' apartments with rents of up to $ 2,600 a month."
Caption: The Edison Apartments at 4711 E. Riverside.
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