Rising costs ID’D as threat city fabric

Housing

forces driving up the cost of living and stressing low-income residents as Austin becomes a larger and increasingly affluent city.

Imagine Austin, a 30year “comprehensive plan” adopted by the council earlier this year, identifies rising costs as a central threat to the fabric of Austin. It is one of the most philosophically and politically tangled issues facing the city. For instance, there is disagreement about whether adding more apartment and condominium units would ease an overheated housing market, as supply-and-demand wisdom holds, or whether allowing denser development would simply cause more people with money to crowd into established neighborhoods and drive up prices.

As people on the periphery of City Hall have debated the dynamics of the housing market, city leaders’ main approach to the issue has been to provide money to help nonprofits build relatively inexpensive housing for poor residents, subsidize rents and make homes more energy efficient.

In 2006, Austin became one of the first U.S. cities to include money for affordable housing in a bond package. Since then, nearly all of the $55 million approved by voters has been awarded to nonprofit and for-profit housing developers who have built, renovated or repaired about three dozen properties totaling 1,700 low-income apartments, condos and singlefamily homes. An additional 900 housing units are planned or under construction.

But in November, a larger affordable-housing bond proposal failed. It was the first bond proposition to fail in Austin since light rail in 2000.

The council was in agreement that affordable housing remains an important need, though. Morrison said she sees that November vote as a rejection of the amount of spending, not the notion of government trying to counteract the rising cost of housing.

“We’re talking about people who serve you at restaurants, work at our kids’ schools, drive buses,” Morrison said. “There are many lowincome jobs in Austin, and we should make an effort to ensure the people who work them can live here.”

But the failed bond proposal reveals a city with sharply different opinions on affordable housing — a disagreement that will probably become increasingly relevant as the City Council transitions to a system in which council members represent districts rather than all of Austin.

Following the November election, City Demographer Ryan Robinson studied the housing-bond results by dividing the city into four rings, like a dart board. The inner circle, the most liberal part of the city, overwhelmingly supported the housing bonds. That is the part of Austin that, because of its relatively high turnout, is primarily responsible for the election of all seven council members.

Robinson found that the farther from the city’s core a voter lives, the less likely he or she was to support the affordable-housing proposal. The outer ring was overwhelmingly opposed. With the coming switch to a district-based system, those areas far from the city center are likely to have a bigger say in council matters.

Morrison said she and Tovo arrived at the $10 million amount because city staffers told them that is the amount of money the city can properly manage for affordable housing at a given time.

Betsy Spencer, head of the city’s Neighborhood Housing and Community Development Office, said that if the city could find $4.3 million, Austin would be eligible for and would likely receive $30 million in federal affordable-housing grants earmarked for Central Texas.

But it’s not clear where that city money would come from.

Leffingwell said it would likely have to come from other city departments or from the city’s reserves, which he said should be off-limits. Council Member Mike Martinez, on the other hand, said leveraging federal money might be a good reason to dip into reserves.

City Manager Marc Ott said he didn’t want to speculate on potential funding sources until his staff had researched the matter, but he cautioned, in light of council requests to fund other initiatives, that the budget is already stretched.

“Our (tendency) to go back into the budget … on a repeated basis is just not sustainable from a financial perspective,” Ott told the council.