Oracle: when a tech company expands in Austin

Demolition, it seems, follows Robin Wilkins.

Wilkins, 54, moved into the Lakeview Apartments on South Lakeshore Boulevard after another apartment building she was living in was slated to be torn down. She stayed for five years, paying no more than $720 a month for a two-bedroom apartment. Nonetheless, throughout that stay she knew the fate of the building: oblivion.

“Everybody knew that,” said Wilkins. “Nobody was blindsided by that. We all knew it was going to be demolished.” But what no one knew, according to lawyers representing roughly 30 former Lakeview tenants, was when.

Wilkins renewed her lease for six months at the beginning of June. Two weeks later, she said, she was told she would have to be out by the end of September. In an email, Steve Clark from Cypress Real Estate Advisors – which manages the partnership that owns the property – disputed these claims. “The leases provided that the tenant agree to vacate on 30 days’ notice if we decided to demolish – even so, the property manager allowed tenants to stay through the end of their lease,” he wrote.

According to city documents, an application for demolition was submitted on Sept. 23. The city approved it two weeks later.

“I had three months,” Wilkins said. “I’m like, ‘Wow, three months. My lease says I have until the end of December.’”

The land where once the affordable housing complex sat (it’s now demolished) will become part of technology company Oracle’s new campus. Oracle declined to comment for this article. According to the company’s press release, the move will allow it to increase the number of employees by more than 50 percent. Plus, Oracle says it plans to buy nearby affordable housing for its employees.

Mayor Steve Adler said he welcomes the expansion. “It will increase jobs in this city. It fits with the kind of business expansions we want, the kind of businesses we want to have in the city,” he said. “It fits with Austin’s brand as a tech place. And all those things are good.”

But, he said, the tale of a flourishing economy uprooting lower-income Austin residents is not new – and the city is nowhere near the postscript.

“What happened out on this area, on the Riverside area, is the poster child for where Austin is. There are good things about it, with a company moving in and expanding and the kind of company we want and creating jobs on the east side of town,” said Adler. “But there are challenges that come with that. This is a bittersweet incident.”

For Wilkins, it’s just bitter. By the end of September, she said she was packed and ready to leave – where she was headed, though, was still unclear. “Wherever I was gonna go, whether it was put everything in storage and live out of the car, I was ready to do that,” she said. “But I got lucky – I got into this place, and here we are today.”

Wilkins was able to move her family into a new apartment, and for that she says she is grateful. But her monthly rent today is $1,151 – over $400 more than she paid per month at Lakeview. Plus, she was never refunded her $50 deposit – a common complaint among tenants, said Brian McGiverin, attorney at Dietz, Lawrence and McGiverin. The firm is considering filing a lawsuit against Cypress Real Estate Advisors, as is Texas RioGrande Legal Aid.

Update: The property manager, speaking through Cypress Real Estate Advisors by email, said that Wilkins did not get her deposit because she failed to leave a forwarding address. Wilkins confirmed this, but said she was told that no tenants would be receiving their deposits – and so therefore did not try. The property manager denied this. He said only 17 tenants did not receive their deposits because they left no forwarding address or the address the money was sent to was returned.

“The question I would ask is, does it really make sense that a landlord would hang on to a $50 deposit?” wrote Clark, with Cypress Real Estate Advisors, by email.*

City Council has taken steps to protect residents forced out of low-income housing at the hands of the city’s rapid growth. In November, Council members approved a resolution asking city staff to devise an ordinance including certain protections for tenants of buildings set to be demolished. It would require that tenants be given at least six months’ notice of the deadline for moving out, that a relocation stipend be provided for those who qualify and that housing management allow for flexible move-out dates.

“What happened at Lakeview absolutely ignited the conversation about having a tenants’ rights and tenants’ relocation ordinance in Austin,” said Council Member Greg Casar, a co-sponsor of the measure. Casar also said he was surprised to learn about the city’s demolition application requirements, which do not demand disclosure of whether a building to be demolished is occupied.

“I think that the proposal before the City Council to help tenants with relocation expenses is a step in the right direction because it is very expensive to be displaced,” said McGiverin, adding, “Is it a complete solution? No, because it does nothing to prevent the dislocation itself. It does nothing to begin to rectify or even to limit the economic segregation which we have in the city of Austin.”

Adler said he and city staff are working on several ways to ensure that some current affordable housing will stay in place. “There are 80,000 affordable housing units in the city, and 40,000 of those are on transportation corridors, and if we don’t figure out a way to preserve that housing stock over the next 10 years, we’re going to lose those homes,” he said.

While Adler is staying hush on his ideas for how to achieve this preservation, Council Member Pio Renteria offered one suggestion: the creation of a fund into which private investors could essentially bankroll the city’s quest to buy up current affordable housing units. The city would act as landlord, ensuring that the properties remain affordable while providing investors with some monetary return.

Although what’s left of Wilkins’ Lakeview apartment is nothing but towed-away rubble, there is some hope that Oracle’s presence could bring some people in Wilkins’ financial situation back to the neighborhood.

Oracle’s new campus happens to be one of the city’s newly designated homestead preservation districts. Should the city approve tax increment financing for the district, as it did with an earlier one, a portion of property taxes paid by Oracle would go directly into building affordable housing in the same area.

This story was produced as part of a reporting partnership between KUT and the Austin Monitor.

Update: Audio from the KUT version of this story is embedded below:

Photo by Jorge Sanhueza-Lyon

*This story has been updated with comments from Cypress Real Estate Advisors.