With the fate of a $350 million affordable housing bond now in the hands of Austin's voters, the referendum carries the potential to inject a substantial sum of money into the hands of developers and contractors — while also addressing a mounting housing crisis.
But the idea has its opponents.
The $350 million bond, the largest of its type proposed in city history, if approved would increase property taxes by more than $45 a year for a "typical" Austin home, valued at $448,000 with a taxable value of $358,400, assuming there's a homestead exemption.
Such a gain could cause pain during this time of drastically rising prices. Yet proponents argue that is why now is the time to invest in much-needed housing for essential workers.
Affordability is widely recognized as the biggest challenge facing Austin. Nearly 60% of respondents identified it as the most pressing issue in a poll earlier this year commissioned by social entrepreneurship group Notley for the Austin Monitor, soundly beating out things like crime, homelessness and traffic.
Early voting in Travis County begins Oct. 24 and Election Day is Nov. 8.
Results of past bonds
An analysis of the city’s previous bonds conducted by HousingWorks Austin, one of the primary supporters of the new proposed borrowing plan, found that the city’s bonds funded in 2013 and 2018 created close to 7,500 jobs and generated more than $1 billion in the local economy.
Austin has dedicated $370 million in bonds to affordable housing. In 2006, Austin asked for $55 million, the bond in 2013 was for $65 million and the 2018 bond was for $250 million.
The housing constructed and rehabilitated through the last two bonds generated more than $100 million for the local economy annually and sustained 700 long-term jobs, including 300 roles in supportive services with those workers spending more than $42 million on an annual basis, according to HousingWorks.
Between the bonds approved in 2006, 2013 and 2018, a total of 6,754 new homes were built in Austin.
More than 3,700 new homes were offered to households at deeply affordable rates and 830 were established as permanent supportive homes.
The people living in those homes have saved more than $18.5 million, according to the report.
"The $350 million affordable housing bond is one of many steps toward unlocking a more affordable Austin," said Fayez Kazi, founder and CEO of Capital A Housing, an Austin-based affordable housing developer. "Housing projects resulting from these bonds also have a secondary impact in the form of economic growth and job creation in the construction trades."
Capital A Housing was created as part of Civilitude Group, an engineering firm, to contribute to Austin’s strategic housing blueprint. The company is co-developing Seabrook Square, an affordable housing community near the Mueller neighborhood.
"For the first time, the community and city leadership are truly committed to tackling the generational crisis of housing affordability and homelessness," Kazi said. "Through leveraging resources like these and other creative partnerships, and continued focus on this issue as a community, I believe that we can reach equilibrium in the next several years."
At the time of the bond's initial proposal in mid-July, the Austin Justice Coalition, a grassroots organization promoting criminal justice reform as well as economic and social justice efforts, conducted a poll that found 68% of respondents support a large affordable housing bond this November.
The same poll determined that 83% of participants agreed that Austin should be actively working to address the affordability crisis.
The 2018 bond passed with nearly 73% approval from Austin's voters.
Not all are on board
Political action committee Save Austin Now opposes the bond package and tells local news outlets that it is in the process of raising funds to oppose it.
The group, which also backed the re-implementation of the homeless camping ban, said the bond would make Austin less affordable. Co-founders Matt Mackowiak and Cleo Petricek argue the city taking on more debt would further burden homeowners. They argue that Austin will become more affordable when it stops increasing real estate development fees and streamlines the permitting processing.
Austin has the highest development fees among the largest metropolitan areas in Texas, according to a report from the Texas Real Estate Research Center at Texas A&M University.
The Texas Public Policy Foundation also opposes the bond package and argues that in the affordability crisis, the city should focus on homelessness as a public health issue.
"Homelessness is one if not the single largest crisis that Austin faces," said Michele Steeb, a senior fellow with the Texas Public Policy Foundation, overseeing the organization's initiative to transform homelessness policies in the state and nation.
Established in 1989 by San Antonio physician and businessman James Leininger, the foundation is a conservative think tank based in Austin.
Expressing criticism for Mayor Steve Adler's ambitious goal for Austin to end homelessness shared during his final State of the City address, Steeb said that the city should focus on working closer with the Travis County government, which provides health and human services in the city.
"This is a health and human services crisis, and those services need to be provided," Steeb said. "That needs to be the focus — building a much stronger partnership with the county.”
Why now?
Rising real estate prices are exactly why now is the time to push forward with another bond package, said Alice Woods, a development associate at Saigebrook Development, an Austin-based consulting firm focused on affordable housing development.
"This bond is especially important right now, while construction pricing is still high and interest rates and rising — affordable developers need gap financing from the city to make our deals feasible," she said.
Saigebrook — which has worked on affordable communities in Austin such as Aria Grand and Vi Collina on the south side and The Abali off I-35 near 51st Street — has supported the bond since it was first proposed earlier this year, alongside Capital A Housing and Diana McIver & Associates.
"This bond has the potential to support the development of a lot of affordable projects in Austin — for each of those there will be jobs created associated with design, construction, and property management," Woods said.
But she said the larger impact will come from the individuals living in this new housing: those who want to live and work in Austin but otherwise cannot afford to, as well as longtime families that work in crucial industries like restaurants or schools but are on the verge of being priced out of the city.
"We need everyone who keeps our city and our economy running — health care workers, teachers, sanitation workers, musicians, service industry workers — to be able to live here, and at the moment many cannot," Woods said.
Although the bond would help pay for more housing, the geographic dispersion of affordable projects remains a major challenge. Such housing remains in extremely short supply in affluent neighborhoods in Central and West Austin.
According to a 2021 report from HousingWorks, West Austin’s City Council District 10 produced just 24 affordable units between 2018 and the end of 2020, less than 1% of a district-wide goal of 8,456 units by 2028.
"Historically, we have built most of our affordable and multifamily housing in the eastern crescent because it has been so difficult to build in every other part of town due to single-family zoning, land prices, and neighborhood opposition," Woods said. "The city has done a lot in recent years to try to distribute affordable housing more equitably throughout Austin, but these areas still lag way behind."
Source: Austin Business Journal
Posted by Grossman & Jones Group on
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