Council members offer mixed reviews of displacement task force recommendations

City Council took its first look Tuesday at a long list of recommendations from a task force focused on reducing displacement of Austin’s low- and middle-income populations.

The report that was unanimously approved by the Anti-Displacement Task Force includes 107 ideas for how to keep people and businesses from being priced out of the city. The report primarily focused on how the city can preserve and create affordable housing in the midst of rapidly rising property values.

The task force recommended the city build more income-restricted housing, both on existing city-owned land and by acquiring more land for the construction of new units. It also recommended that the large majority (85 percent) of affordable housing bond funds be used to house those at or below 50 percent of the median family income ($43,000 for a family of four) and that 42.5 percent be devoted to those at or below 30 percent MFI ($25,800).

The $250 million affordable housing bond that Austin voters approved earlier this month does not specify which income levels will be targeted, though it is restricted to subsidizing rental units below 50 percent MFI and homeownership units at 80 percent MFI and below. The $65 million in the 2013 affordable housing bond has funded 1,075 units at 50 percent MFI, but only 214 at 30 percent MFI. In instances where private developers agree to provide affordable units as part of a density bonus program, rental units most often target those at 60 or 80 percent MFI.

While the focus on creating new housing was warmly received by Council, other recommendations stoked familiar divisions among Council members over land use policy. Notably, the report seemed to endorse the theory, long backed by neighborhood associations and Council members focused on preserving the character of single-family home neighborhoods, that increasing housing supply may exacerbate, rather than alleviate, affordability challenges.

To that end, the report recommended that a new land development code should not facilitate increased density in gentrifying areas “unless those zoning changes are tied to a provision” of income-restricted housing. The task force also suggested creating a “neighborhood stabilization overlay” in gentrifying areas that would impose more stringent development standards “as a way of respecting neighborhood scale and character.”

During a discussion of the task force during a Tuesday Council work session, Council Member Jimmy Flannigan said that policies aimed at preventing density or slowing the construction of housing would simply exacerbate the problem the task force hoped to address. To allow only single-family homes to persist, he said, would “ensure” that current residents will eventually be replaced by wealthier ones.

Council Member Delia Garza similarly argued that increasing land use restrictions would be counterproductive. She noted approvingly that the same report which argues against increased density in low-income areas also recommends encouraging low-income homeowners to build accessory dwelling units (or garage apartments), either to house family members or to generate income by renting them out.

Raul Alvarez, co-chair of the task force, said that he didn’t view ADUs as having the same negative effect as other types of density. He is more worried about major developments with “70 units an acre,” which he said lead to increased land values in the surrounding area.

Alvarez acknowledged, however, that differences of opinion about land use policy were a challenge for the task force.

Council Member Ora Houston bemoaned the lack of action from the city on displacement over the past four decades. She would like to pass her own home on to her children, but knows that they will be unlikely to afford the property taxes. While she and many other seniors can afford to stay in place because their taxes are frozen after age 65, their descendants will not benefit from the same reduced tax rate when they inherit the homes.

“They wouldn’t be able to stay in the home that their grandparents built that I was going to try to pass on to them,” she said of her children.

Mayor Pro Tem Kathie Tovo was particularly excited about the “right to return” policy recommended in the report. The task force suggested that longtime residents or those who have been displaced be given priority in subsidized units or city programs aimed at helping people purchase homes they otherwise couldn’t afford.

In recent years, the city of Portland, Oregon, has put in place a program to help those displaced by gentrification buy homes in their former neighborhoods. The program offers subsidies to cover part of the new homeowners’ down payments.

Council Member Greg Casar said that assisting homeowners and helping people buy homes was important, but stressed that the city should focus mostly on renters. The vast majority of low-income residents are renters, as are 73 percent of African-Americans and 68 percent of Latinos.

In a recommendation that will similarly divide Council, the report warned against increasing the homestead exemption, saying that the popular tax break for homeowners simply shifts the tax burden onto renters and businesses. That was the only recommendation that prompted an objection from some members of the task force. In a minority report, Alvarez, Ann Teich and Ed Wendler Jr. said they were unconvinced that the exemption harms renters and suggested that the claim needs further examination.

This story has been changed since publication to clarify the terms of the 2018 affordable housing bond.

Photo by Larry D. Moore [CC BY-SA 4.0], from Wikimedia Commons.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.