In 2016, Austin passed the tenant notification and relocation ordinance, meant to ensure that tenants receive adequate notice when there’s demolition or renovation of their home so that they can relocate successfully from development-induced displacement. Now the city is trying to figure out how to put the program into practice.
Originally, the city had intended it to be at least partially developer-funded, but state legislation disallowed that. So, in 2023, the city adopted a budget rider (confusingly still called the “developer fee,” though it will be provided by the city) commissioning a study to see what that fee amount should be. The Austin Housing Department, with the help of Oregon-based public policy research firm ECOnorthwest presented the results to Council’s Housing and Planning Committee Tuesday.
Similar programs exist in other cities: In San Antonio, a city-funded program gives renters up to $3,500 and mobile home owners $7,500. Seattle’s program gives renters $5000, funded in equal parts by the property owner and the city, available to people living at 50 percent or below the Area Median Income. In Palo Alto, property owners are responsible for the assistance, and can pay up to almost $20,000 for a three bedroom house.
In Austin, redevelopment of five or more units or mobile home development site plan changes and rezonings trigger a tenant notification requirement. As it stands now, the program’s notice period for multifamily units is 120 days, and for mobile homes is 270 days. The eligibility for assistance sits at 70 percent Median Family Income (MFI) for multifamily residents, 80 percent for mobile home residents. Relocation assistance includes an assigned housing locator within a 50-mile radius of the tenant’s original home, plus financial assistance for moving and storage rental. The cap on that assistance is $6,000.
“We know there is a significant mismatch between renter incomes and available housing,” explained Jade Aguilar, project director for ECOnorthwest. “Most rental units are priced for households earning between 60 to 80 percent of the area median income, while most renters have either very low or very high incomes.”
That means higher-income renters are occupying units that would be affordable to lower-income households, and many low-income renters are paying more than they can afford for higher-cost units. Similar dynamics are at play within a 50-mile radius of Austin.
“Although housing is generally more affordable outside Austin with a lot more units affordable for people making 60 percent of Austin’s area median income, it can still be really challenging for lower-income households to find available housing at prices that are affordable to them,” Aguilar continued, adding that a higher rate of that cost burden falls on Black and brown households.
Displacement is hard to track. Very few people who experience it document it, unless they receive an eviction notice. ECOnorthwest limited its study to permits filed by developers for demolitions in order to focus on the subset of displacement happening specifically because of renovations, rather than factors such as discrimination, loss of neighborhood culture or management neglecting repairs.
Between 2012 and 2022, 50 percent of all of the units demolished were in the neighborhoods of Central and South Austin, in Council Districts 1, 3, and 9. About 95 percent of apartment and mobile home demolitions were concentrated within six miles of downtown. Notably, areas that have lost the most rental units have also seen the largest increases in median income, suggesting “substantial migration of higher income households… possibly accompanied by out migration of lower income households due to direct and indirect displacement pressures,” Aguilar said. And, as the entire city has grown, so has the median household income.
Importantly, for each unit that was demolished during that decade, two new units were added, ECOnorthwest found by cross-referencing construction permits for the same addresses. And as Austin has become more dense, the majority of those displaced relocated south, to places like Buda, Kyle and San Marcos.
About 35 percent of Austin’s rental households – about 100,000 – are currently eligible for the tenant relocation program based on income and the type of housing they’re living in. More than a third of those households are extremely low income, meaning they earn 30 percent or less than the median family income. And, of course, moving is expensive. For the smallest units of housing, a studio or one bedroom, to a bigger unit, ECOnorthwest found it can be as much as $3,100 to $6,300. For a mobile home, because storage is involved, it could be up to $15,000.
“That means unit size is the key driver of the relocation cost difference,” said Aguilar. “Right now, the current program cap of $6,000 per household is unlikely to meet the relocation needs of mobile home owners and those larger households.” Importantly, the majority of those relocated to date, are in the smaller size range.
Because of the discrepancy in cost per unit size, ECOnorthwest recommended the city adjust the compensation based on size and type of housing. They also recommended providing additional support for the large portion of households that are extremely low income and providing them longer notice, “because it is a challenge to find housing, and the more time they have to be locating that, the better,” said Aguilar. “These folks have been evicted from their homes. It’s not easy to find available, adequate apartments, and it takes a lot of time and effort. Some households have additional needs, like accessibility requirements.”
Aguilar said that, according to the study, the 50-mile radius for eligibility is “adequate at this point, and is mostly meeting the needs of the folks who are using the program to stay in the city.” However, they did recommend the city track where these relocated renters end up, and how much new rental costs are by location, to understand whether people are losing their eligibility for assistance as Austin’s affordability crisis extends past the 50-mile limit.
Indeed, that was the biggest sticking point for Council Member Natasha Harper-Madison, chair of the planning committee, who pushed back: “Just having watched the trends from 2019 to now, I was saying, ‘Well, folks, you might as well strap in and get ready for the regional expansion. You’ll be in Niederwald before you know it.’ And now Niederwald is San Marcos. And now Pflugerville is Parker Heights. So I just sort of wonder, if Taylor is already getting to the point where they’re becoming unaffordable, then that means …I don’t think 50 miles is going to cut it for long. So I’m curious how quickly we might be able to make an adjustment there, just based on inflation and the rate of speed that people are moving here and moving out of here.”
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