Council to consider tool that would bring permanently affordable housing to East Austin

Today, City Council is set to consider implementing a tool that would bring more affordable housing units to the east side. It’s called a community land trust, and it could create homes that remain affordable for decades to come.

If approved, the measure would designate two local nonprofits, the Chestnut Neighborhood Revitalization Corporation and the Guadalupe Neighborhood Development Corporation, as new community land trusts. Certain homes built by these groups would be sold to people who earn 80 percent or less of the median family income. For a family of four in Austin, that’s about $77,000 a year.

Here’s how the system works. If you buy a home that’s part of a community land trust, you’ll pay taxes on the house, but not on the land. Sandra Harkins is with the city’s Neighborhood Housing and Community Development Office.

“It provides low- and moderate-income residents the opportunity to build equity through home ownership, and one of the more important things is it ensures that these homeowners are not displaced due to rising property taxes,” Harkins said.

Homeowners would own the homes but lease the land from the city. Harkins said they would pay an initial leasing fee of $250 and then $50 a month, instead of paying the much more expensive land taxes, and that lease would remain in place for 99 years.

The city’s first community land trust homes were sold in 2015, though there are none on the market currently. If approved by Council, this measure would add 51 new homes for sale, along with six new rental units, in East Austin. Harkins said even though homeowners would be exempt from paying property taxes on the land, these new units would still generate new tax revenue.

“These are currently vacant lots,” she said. “So you’re taking a piece of property that wasn’t at all on the tax roll, and adding it to the tax roll. Even though its going to be limited to the improvement taxes … it’s a piece of property that wasn’t previously on the tax roll.”

One of the properties that would be included in the land trusts is the Chicon, a 43-unit mixed-income development near East 13th and Chicon streets. Construction was stalled for about nine months after developers ran into issues with the land titles and sought additional funding. Sean Garretson is board president of the Chestnut Neighborhood Revitalization Corporation, which is constructing the property. He said the first residential building should be ready for move-in by the end of the year.

“All the residential units are pre-sold, and all the commercial units, all but one unit had been pre-sold, and we still have a couple of people we’re talking to about that commercial unit,” Garretson said.

The properties that would be a part of these new community land trusts are all located within Council districts 1 and 3. District 1 Council Member Ora Houston did not make herself available for an interview. But District 3 Council Member Pio Renteria said the city has to take advantage of whatever methods state law will allow when it comes to adding affordable units.

“They have tied our hands in all kinds of ways to fight for our low-income Austinites, so you know, we have to be creative,” Renteria said.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT. Photo by Gabriel Cristóver Pérez/KUT News.

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