ARE HOUS­ING IN­CEN­TIVES WORK­ING?

Austin American-Statesman Sunday - - INSIGHT -

As the city rewrites its lan­duse rules, one gad­get in Austin’s tool­box to ex­pand af­ford­able hous­ing — the den­sity bonus pro­gram — is rais­ing ques­tions about whether it ad­dresses the needs of low-in­come fam­i­lies with chil­dren, among those most in need of hous­ing help.

It’s an im­por­tant ques­tion the city can’t an­swer now, but the an­swer would go a long way in de­ter­min­ing the strengths — and weak­nesses — of den­sity bonus pro­grams and oth­ers aimed at ex­pand­ing the city’s af­ford­able hous­ing stock. The an­swer also is strate­gic in de­ci­sions re­gard­ing the ongoing over­haul of city land-use rules, called CodeNext.

Den­sity bonus pro­grams per­mit de­vel­op­ers to build larger hous­ing projects than ex­ist­ing zon­ing al­lows, if about 5 to 10 per­cent of the hous­ing units they cre­ate are af­ford­able to peo­ple earn­ing less than Austin’s me­dian in­come.

At this point, city of­fi­cials told us they don’t know whether hous­ing gen­er­ated by den­sity bonus pro­grams is mostly serv­ing col­lege grad­u­ates work­ing in cof­fee shops, se­niors on fixed in­comes or low-in­come work­ing moth­ers. El­i­gi­bil­ity re­quire­ments are based on in­come, which is capped for renters at 60 per­cent of Austin’s me­dian fam­ily in­come.

If the size or type of units is any in­di­ca­tion of who is rent­ing them, then there is cause for con­cern, be­cause the lion’s share are ef­fi­cien­cies, stu­dios or one-bed­room apart­ments. In other words, they aren’t fam­ily-friendly.

We urge the city to do its home­work by col­lect­ing data to help sort out the pros and cons to strengthen den­sity bonus pro­grams and CodeNext mea­sures, which pro­pose to ramp up these pro­grams.

Without data on who is ben­e­fit­ing, Austin is in the dark about whether the pro­grams are ef­fec­tively yield­ing the com­mu­nity ben­e­fits in­tended.

The city en­cour­ages de­vel­op­ers to build af­ford­able units on­site, but there are other ways to meet den­sity re­quire­ments, such as pay­ing a fee to the city’s hous­ing trust fund or build­ing units else­where in the city.

Con­cerns over how to align such in­cen­tives sur­faced re­cently as the City Coun­cil con­sid­ered a den­sity bonus in­cen­tive for Habi­tat for Hu­man­ity.

Ear­lier this month, the coun­cil unan­i­mously approved Coun­cil Mem­ber Sabino “Pio” Ren­te­ria’s pro­posal to give Habi­tat ex­tra den­sity bonuses on prop­er­ties at 1409 and 1411 E. Fourth St., but not be­fore Coun­cil Mem­ber Kathie Tovo tried and failed to add a re­quire­ment that most units have mul­ti­ple bed­rooms.

Clearly, the city is re­ceiv­ing a com­mu­nity ben­e­fit in exchange for per­mit­ting the non­profit to add den­sity to its project: Habi­tat in­tends to build about 80 con­do­mini­ums — with about a third be­ing fam­ily-friendly units with two or three bed­rooms, a Habi­tat of­fi­cial told the coun­cil.

Without the zon­ing change, Habi­tat would have been limited to 19 units with a good chance of all of them be­ing just one-bed­room units.

But as Tovo rightly noted, there is a gam­ble when the size and type of hous­ing units are a goal in­stead of a re­quire­ment.

That distinction might not make much dif­fer­ence in the Habi­tat case, given the non­profit’s record in ad­dress­ing hous­ing needs of poor and low-in­come res­i­dents. But city of­fi­cials ac­knowl­edge that the size and type of units that are built through den­sity bonus pro­grams largely are driven by mar­ket fac­tors.

Smaller units that ac­com­mo­date sin­gle peo­ple are in high de­mand. More­over, they cost less to build. Hence, the trade­off be­tween the city and de­vel­op­ers typ­i­cally boils down to get­ting more, smaller af­ford­able units that aren’t fam­ily-friendly and fewer mul­ti­ple-bed­room units that ac­com­mo­date fam­i­lies with chil­dren.

That bal­ance tilts to­ward smaller units, city of­fi­cials ac­knowl­edged, say­ing while they might not have spe­cific ra­tios for the var­i­ous cat­e­gories of af­ford­able hous­ing cre­ated by de­vel­oper in­cen­tives, they know most are sin­gle-per­son units.

Ques­tions about the ef­fec­tive­ness of den­sity bonuses in serv­ing Austin’s low-in­come fam­i­lies are ones Nuria Zaragoza, a mem­ber of the city’s Plan­ning Com­mis­sion, has grap­pled with for some time. That cu­rios­ity led her to part­ner with a lo­cal de­vel­oper to sur­vey apart­ments in Austin’s busy traf­fic cor­ri­dors to find some an­swers. Though it is not sci­en­tific, the sur­vey backs up con­clu­sions by city of­fi­cials.

Us­ing data from Ax­io­met­rics, an apart­ment and mar­ket re­search firm, the sur­vey of 25 apart­ment com­plexes in the ar­eas of South Congress, Bur­net Road and La­mar, South La­mar, East River­side and east-cen­tral Austin found that out of 6,895 units, just 216 were af­ford­able and gen­er­ated by den­sity bonuses. Of the 216 af­ford­able units in seven com­plexes that used in­cen­tives, 196 were ei­ther ef­fi­cien­cies or one-bed­room apart­ments. The re­main­ing 20 were two-bed­room units.

What stunned her was the num­ber of chil­dren en­rolled in the Austin In­de­pen­dent School Dis­trict in the to­tal 6,895 units: 46. Some com­plexes, such as The Arnold in East Austin that had 55 af­ford­able units from in­cen­tives, had no Austin ISD kids, ac­cord­ing to data supplied by the dis­trict.

Zaragoza be­lieves the lack of af­ford­able hous­ing for Austin fam­i­lies is a key driver of en­roll­ment de­clines, as well as un­der-en­rolled schools in East Austin, fac­tors dis­trict of­fi­cials also have cited.

Given the stakes, the city should slow its march in ex­pand­ing den­sity bonus pro­grams un­til it can an­swer the ques­tion about who is be­ing served.

JAY JANNER / AMER­I­CAN-STATES­MAN

Do hous­ing den­sity bonuses for de­vel­op­ers help fam­i­lies? A study of the res­i­dents of 6,895 apart­ment units found that only 46 chil­dren were en­rolled in Austin pub­lic schools.

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