AUSTIN IMPLEMENTATION PLAN IMPLEMENTATION - DRAFT November 19, 2018
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AUSTIN
AUSTIN
STRATEGIC
DRAFT
November 19, 2018
STRATEGIC
HOUSING BLUEPRINT
IMPLEMENTATION
HOUSING BLUEPRINT
IMPLEMENTATION PLAN
www.austintexas.gov/housingblueprint
www.austintexas.gov/housingblueprint
wwwv.austintexas.gov/housingblueprint
Acknowledgments Contents
Executive Summary...........................................................................................................................6
City of Austin Neighborhood Housing and Community Development Department: Implementation Plan..........................................................................................................................4
Community Value I: Prevent Households From Being Priced Out of Austin............................................................................ 6
Erica Leak, Manager, Planning, Policy, and Outreach Objective I.1: Expand the Use of Community Land Trusts and other forms of Shared Equity Ownership...............................................................................8
Jonathan Tomko, Principal Planner Objective I.2: Support Legislation for a Flat Dollar Homestead Exemption for All Taxing Entities...........................................................................................9
Objective I.3: Support Legislation or other Mechanisms to Create a Preservation Property Tax Abatement........................................................................10
Objective I.4: Prevent Displacement of Low- and Moderate-Income Homeowners...............................................................................................................11
Thank you to the stakeholders that Objective I.5: Preserve and Create Ownership Options for Households at 80-120% MFI......................................................................................................14
participated: Objective I.6: Coordinate Preservation Strategies with Infrastructure Investments...............................................................................................................15
Austin Chamber of Commerce Objective I.7: Use Incentives to Support the Production of Living Wage Jobs........................................................................................................................16
City of Austin, Code Department Objective I.8: Make Strategic Investments to Minimize Displacement...................................................................................................................................19
Austin Habitat Objective I.9: Allow Homeowners to Rent a Portion of their House as a Separate Housing Unit...........................................................................................27
City of Austin, Commission on Seniors Community Value II: Foster Equitable, Integrated, And Diverse Communities..................................................................... 28
Austin Tenants Council
Objective II.1: Develop a Strike Fund ..................................................................................................................................................................................... 29
City of Austin, Corridor Program Office
Austin UP Objective II.2: Implement the City of Austin’s Fair Housing Action Plan and Bolster Enforcement of Existing Fair Housing Requirements...........................30
City of Austin, Development Services Objective II.3: Undertake Strategic Land Banking...................................................................................................................................................................33
Bank of America Objective II.4: Implement Tenant Relocation Assistance Program..........................................................................................................................................34
City of Austin, Economic Development Objective II.5: Protect Renters from Discrimination Based on Source of Income...................................................................................................................35
Cap METRO Objective II.6: Implement Recommendations in the Austin/Travis County Reentry Roundtable Report...............................................................................36
City of Austin, Equity Office Objective II.7: Add Flexibility to Occupancy Limits.................................................................................................................................................................37
Capital Area Council of Governments (CAPCOG) Objective II.8: Fully Utilize Homestead Preservation District Tools.........................................................................................................................................39
City of Austin, Financial Service Objective II.9: Develop Programs, Resources, and Guides to Aid with Small Scale Preservation...........................................................................................40
Caritas of Austin Objective II.10: Pursue Legislation to Allow Rent Control.......................................................................................................................................................41
City of Austin, Intergovernmental Relations Objective II.11: Pursue Legislation to Allow Inclusionary Zoning............................................................................................................................................42
Central Health
City of Austin, Law Department Community Value III: Invest In Housing For Those Most In Need......................................................................................... 44
Community Advancement Network Objective III.1: Pursue Future General Obligation Bond Elections for Affordable Housing.....................................................................................................45
City of Austin, Office of Real Estate Services Objective III.2: Provide Additional Local Fund Appropriations for Affordable Housing..........................................................................................................46
Community Wheelhouse Objective III.3: Leverage Low Income Housing Tax Credits and Seek Legislative Changes......................................................................................................47
City of Austin, Office of Sustainability Objective III.4: Objective III.4: Challenge the Private Sector to Participate in a Fund for Affordable and/or Workforce Housing..........................................48
ECHO Objective III.5: Maximize Public Property to Build or Include Affordable Housing.................................................................................................................50
City of Austin, Planning and Zoning Objective III.6: Utilize TIFs for Affordable Housing..................................................................................................................................................................54
Foundation Communities
Objective III.7: Utilize Social Impact Bonds/Pay for Success Models for People Experiencing Homelessness........................................................................56
City of Austin, Public Health
Guadalupe Neighborhood Development Corporation Objective III.8: Utilize the National Housing Trust Fund.........................................................................................................................................................57
City of Austin, Public Works Objective III.9: Support the Creation of Deeply Affordable Units Serving People at 20% MFI and Below..............................................................................58
Home Builder Association of Greater Austin Objective III.10: Support Efforts to Prevent and End Homelessness.......................................................................................................................................59
City of Austin, Real Estate Objective III.11: Focus Federal Funds in Housing Investments...............................................................................................................................................60
Housing Works Objective III.12: Incentive Programs....................................................................................................................................................................................... 61
City of Austin, Telecommunications and Regulatory Objective III.13: Expand the Supply of Housing for People with Disabilities..........................................................................................................................62
Legal Aid/BASTA
Affairs Community Value IV: Create New And Affordable Housing Choices For All Austinites In All Parts Of Austin...................... 64
Meals on Wheels Objective IV.1: Adopt Affordable Housing Goals to Guide Policy*..........................................................................................................................................65
City of Austin, Transportation Objective IV.2: Implement Consistent Density Bonus Programs for Centers and Corridors*.................................................................................................70
Six Square Objective IV.3: Streamline City Codes and Permit Processes*................................................................................................................................................71
Objective IV.4: Provide Additional Funding to Monitor Austin’s Affordable Housing Investments*.......................................................................................72
Travis County Objective IV.5: Better Utilize Land for Affordable Housing.....................................................................................................................................................73
Objective IV.6: Revise S.M.A.R.T. Housing Program................................................................................................................................................................74
UT Austin, Law and Community and Regional Planning Objective IV.7: Implement Density Bonus Program for Mid-density Housing........................................................................................................................75
Objective IV.8: Allow the Development of Smaller Houses on Smaller Lots...........................................................................................................................76
Objective IV.9: Create Pre-Approved Standard Plans for Infill Development..........................................................................................................................76
Objective IV.10: Relax Regulations on Internal and External Accessory Dwelling Units.........................................................................................................77
Objective IV.11: Objective IV.11: Relax Regulations on More Affordable Housing Products...................................................................................................78
Objective IV.12: Relax Regulations on Housing Cooperatives.................................................................................................................................................79
Objective IV.13: Utilize Planned Unit Developments (PUDs) to Provide a Range of Affordability..........................................................................................79
Objective IV.14: Increase Housing Diversity in New Subdivisions...........................................................................................................................................80
Objective IV.15: Support Legislation to Create a Multifamily Property Tax Exemption Program............................................................................................81
Objective IV.16: Complete an Affordable Housing Nexus Study.............................................................................................................................................81
Objective IV.17: Consider Building and Fire Code Modifications to Allow Six Stories of Wood Frame Construction.............................................................82
Objective IV.18: Develop Real-Time Database of Housing......................................................................................................................................................82
Community Value V: Help Austinites Reduce Their Household Costs.................................................................................. 84
Objective V.1: Strengthen Scoring Criteria and Develop Policies for Housing Near Current and Future Transit Service........................................................85
Objective V.2: Minimize the Displacement of Core Transit Riders..........................................................................................................................................86
www.austintexas.gov/housingblueprint Objective V.3: Link Housing Choices with Transportation Choices..........................................................................................................................................87
Objective V.4: Comprehensive Parking Reform.......................................................................................................................................................................88
City of Austin: Jonathan.Tomko@austintexas.com Objective V.5: Increase Bikeability and Walkability.................................................................................................................................................................90
Asakura Robinson (lead consultant): Alexandra@asakurarobinson.com Objective V.6: Align Sidewalk Master Plan with Imagine Austin.............................................................................................................................................91
Austin Community Design and Development Center (sub consultant): Nicole.Joslin@acddc.org Objective V.7: Ensure Access to Affordable Care and a Healthful Environment.....................................................................................................................91
Objective V.8: Increase Opportunities for Households to Reduce Utility Costs......................................................................................................................92
Objective V.9: Increase Access to Healthy, Affordable Food for All Residents........................................................................................................................94
Objective V.10: Improve Access to Affordable, Quality Communications and Digital Services...............................................................................................95
Implementation Matrix......................................................................................................................96
List of Abbreviations
ACD – City of Austin Code Department
AE – Austin Energy
AEO – City of Austin Equity Office
AFD – City of Austin Finance Department
ALD – City of Austin Law Department
APH – City of Austin Public Health
ATD – City of Austin Transportation Department
AW – Austin Water
CPO – City of Austin Corridor Program Office
DSD – City of Austin Development Services Department
EDD – City of Austin Economic Development Department
EE/FHO – City of Austin Equal Employment and Fair Housing Office
HACA – Housing Authority City of Austin
IGR – City of Austin Intergovernmental Relations Office
NHCD – City of Austin Neighborhood Housing and Community Development Department
OTRA – City of Austin Office of Telecommunications and Regulatory Affairs
ORES – City of Austin Office of Real Estate Services
OoS – City of Austin Office of Sustainability
PARD – City of Austin Parks and Recreation Department
PAZ – City of Austin Planning and Zoning Department
PWD – City of Austin Public Works Department
SMBR – City of Austin Small and Minority Business Resources Department
TDHCA - Texas Department of Housing and Community Affairs
WPD – City of Austin Watershed Protection Department
Austin Strategic Housing Blueprint Implementation: Implementation Plan
EXECUTIVE SUMMARY
vi Austin Strategic Housing Blueprint Implementation: Implementation Plan This plan will outline strategies to meet Austin’s housing goals, which include a1
variety if housing types, as seen here in Mueller.
The Austin Strategic Housing Blueprint, adopted • Resolution 20170413-024 acknowledges that this housing production, are also incorporated into this
in 2017, provides a vision for the City of Austin to is the first ever Housing Blueprint that will provide Implementation Plan document.
address the housing needs of existing Austin residents the critically important foundation to meet Austin’s
and households while also housing Austin’s growing housing needs. It also notes that “to articulate Several other plans and reports have been developed
population. The Blueprint’s purpose is to “align the vision and achieve success... it is necessary since the adoption of the Blueprint including:
resources, ensure a unified strategic direction, and to have clear, specific steps, including identified Uprooted: Residential Displacement in Austin’s
facilitate community partnerships to achieve a resources necessary to achieve the specific Gentrifying Neighborhoods and What Can Be Done
shared vision of housing affordability.”1 Based on goals.” It directs the City Manager to develop an About It, The People’s Plan, the Anti-Displacement
extensive community feedback and outreach, the implementation plan for the Strategic Housing Taskforce Recommendations, the Mayor’s Task Force
Blueprint sets out five core “community values” that Blueprint that includes action steps, short-term on Institutional Racism and Systemic Inequalities,
should guide the City’s housing affordability strategy, priorities, a process and timeline for reporting to the Analysis of Impediments to Fair Housing
together with individual strategies that contribute to Council, resource needs, and sources of funding Choice, and the Action Plan to End Homelessness.
achieving each recommendation. These community for recommendations. It also recommends refining Recommendations and strategies identified in these
values are: geographic goals for housing production and reports have been considered and typically fall into
preservation, and utilizing an “atlas of existing and one or more of the five community values identified
• Community Value I: Prevent Households from Being historic conditions” to assist in defining important during the community engagement process which
Priced Out of Austin geographies and monitoring change. informed the development of the Blueprint.
• Community Value II: Foster Equitable, Integrated, • Resolution 20170413-025 acknowledges that The implementation plan recognizes that there is no
and Diverse Communities past corridor plans have been developed single strategy that can bring the Blueprint’s goals to
without affordable housing goals or strategies fruition, and that the goals set by the Blueprint are
• Community Value III: Invest in Housing for Those intentionally ambitious. It aims to show how the City
Most in Need for preservation in place ahead of time, resulting
in significant loss of existing affordable housing. can most effectively focus its policy, program, funding,
• Community Value IV: Create New and Affordable Therefore, it specifically requests use of the and staffing efforts to help meet the goals in the next
Housing Choices for All Austinites in All Parts of Corridor Housing Preservation Tool developed by two, five, and 10 years. Ultimately, committing to the
Austin the University of Texas to “assess current conditions strategies and actions in the Blueprint in the short-
and set corridor-specific numeric goals for the term will help ensure that Austin remains a diverse,
• Community Value V: Help Austinites Reduce creation and preservation of affordable housing for vibrant, inclusive, and sustainable community for many
Household Costs corridors throughout Austin, beginning with those years to come.
To achieve these community values, the Blueprint corridors that will receive funding through the 2016
establishes a number of geographic and numerical Mobility Bond.”
goals for housing preservation and production over Homestead Oaks (top) and Mueller (bottom) are existing
This Strategic Housing Blueprint Implementation projects that informed strategies in this plan (source: City of
the 10-year period between 2018 and 2027, including (SHBI) Plan and its companion document, the SHBI Austin).
a need for 60,000 new or preserved housing units Atlas of Existing and Historical Conditions, establish
affordable to households earning 80% or less of specific action steps, short-term priorities, and
the area’s Median Family Income (MFI), and 75,000 geographically-specific goals for meeting Austin’s
additional housing units affordable to households housing needs. This document, the Implementation
earning 81% MFI and above. It also sets forth 63 total Plan, includes detailed action steps for achieving all
policy and program strategies that the City should seek of the 63 Strategic Housing Blueprint Strategies. The
to implement during the 10 years following adoption Atlas of Existing and Historical Conditions establishes
of the Blueprint. geographic methodologies for allocating the Blueprint-
Upon adoption of the Strategic Housing Blueprint, the proposed 60,000 new and preserved affordable
City Council also adopted two resolutions directing the housing units across the City and within each Council
City Manager to develop further detail implementation district. It includes an Opportunity Index that defines
steps required to achieve the vision embodied in the “high-opportunity” areas; a Displacement Risk index
Blueprint: Council Resolutions 20170413-024 and that uses University of Texas-provided data to examine
20170413-025. areas undergoing gentrification, and an Environmental
Index that examines areas of environmental risk for
affordable housing development. Key conclusions
from the Atlas, including geographic goals for
1 Austin Strategic Housing Blueprint, 2017, p. 3.
2 Austin Strategic Housing Blueprint Implementation: Implementation Plan 3
IMPLEMENTATION PLAN
This plan will outline strategies to meet Austin’s housing goals
4 Austin Strategic Housing Blueprint Implementation: Implementation Plan in all areas of Austin, like these units at the Plaza Saltillo Lofts. 5
(source: City of Austin).
Community Value I: PREVENT Displacement Risk
HOUSEHOLDS FROM BEING PRICED OUT 183A
OF AUSTIN
45
As the Austin region continues to experience • Adding income-restricted housing for low- 130
population and employment growth, housing income and moderate-income residents. This
in the city near jobs and services has become “addition” of income-restricted housing can 1
183
increasingly unaffordable. Solutions are needed be accomplished in several ways: through
to prevent current low- and moderate-income new development of affordable housing;
households from being displaced by rising rents through acquisition and preservation of
and taxes, and to preserve housing opportunities market-rate affordable housing; or through
360
for low- to moderate-income households over preservation of expiring income-restricted 35
the long term. The map below draws on data housing units that will become market-rate
from the University of Texas study, Uprooted: without intervention. 290
Residential Displacement in Austin’s Gentrifying
Neighborhoods, and What Can Be Done About It, • Keeping existing renters and homeowners
to define the areas of greatest displacement risk in place through strategic investments and
in the City of Austin as of 2018. supportive programs. 71
The Blueprint and other recent studies, • Providing an adequate supply of housing for 183
including the Anti-Displacement Task Force all residents at all income levels. As noted in
360
recommendations and the Uprooted study, the Blueprint, when there is a lack of housing
1 130
recognize that the problem of displacement units relative to demand for housing, prices
is multifaceted. Ultimately, displacement for all types of housing rise.2 Therefore,
prevention strategies must include: providing an adequate supply of housing for 290
35
290
high- and moderate-income households will
71
help address ongoing price increases that
affect low and moderate-income households
as well. 45 71
The strategies defined in this Community
Value include making strategic investments
in gentrifying areas, including affordability
preservation near Mobility Bond corridors 183
35
and other areas of public investment; growing
the financial tools available to the City for 130
affordability preservation; and expanding
resources available to homeowners and renters at
risk of being displaced.
N 0 5
High Displacement Risk Areas
2 Miriam Zuk and Karen Chapple, Housing Production, Miles
Future Displacement Risk Areas
Filtering and Displacement: Untangling the Relationships,”
Source: Mueller, Elizabeth; Heather K. Way, and
Institute of Governmental Studies Research Brief (Berkeley:
Jake Wegmann. UT Austin Gentrification Study.
UC Berkeley), 2016. 2018. Downloaded May 25, 2018.
6 Austin Strategic Housing Blueprint Implementation: Implementation Plan 7
Objective I.1: EXPAND THE in order to make policy changes that result in Action I.1.B: COMBINE COMMUNITY Objective I.2: SUPPORT
increased production capacity for shared-equity LAND TRUST WITH LAND DEVELOPMENT
USE OF COMMUNITY LAND ownership units. The Request for Information CODE CHANGES THAT ALLOW FOR A
LEGISLATION FOR A FLAT
TRUSTS AND OTHER FORMS OF should request the history of units the local RANGE OF HOUSING TYPES. DOLLAR HOMESTEAD
organizations have created, the level of subsidy
SHARED EQUITY OWNERSHIP required per unit, and the current status of these This action largely depends on devoting additional EXEMPTION FOR ALL TAXING
Between rental and conventional homeownership, units. The RFI should also request an understanding resources to shared-equity development, combined ENTITIES
shared equity ownership ensures that homes remain of capacity-building, lending, and community with Land Development Code changes that allow for
multi-family development. These actions are largely Current state law only allows cities to offer a
affordable to lower-income households on a long-term education needs to scale up shared-equity housing
covered in other portions of this Implementation homestead exemption equaling a percentage
basis. One form of this, community land trusts, enables for homeownership, rental, and limited-equity
Plan. However, one notable need is the creation of the appraised value of a property, which
eligible households to purchase a home and lease co-operatives in Austin over the next 10 years.
of a separate zoning category for cooperative disproportionately benefits owners of high-value
the land underneath it (Figure 9). By taking the cost It should also specifically ask for projections
developments rather than including these with group homes while offering little relief to owners of low-value
of the land out of the real estate transaction, homes around how many mortgage-ready households at
homes. This change to the Land Development Code homes. A flat dollar-amount homestead exemption
in a community land trust are much more affordable the 60%, 80%, and 120% median family income
would open up opportunities for limited-equity would offer more substantial relief to homeowners
than houses on the open real estate market.3 (MFI) levels could be provided with shared-equity
cooperative development throughout the City. For who are most in need.
Dedicating additional resources to the program could homeownership over the next 10 years if adequate
help expand it. Combining the land trust tool with funding and resources were available. more information on this zoning category and potential
Action I.2.A: SUPPORT LEGISLATION TO
regulatory changes through Land Development Code ways to promote cooperative development, see Action
• Devote resources to shared-equity ownership IV.12.A. These changes should be focused in High- ALTER HOMESTEAD EXEMPTION RULES AT
changes that allow for a range of multifamily housing THE STATE LEVEL.
types, such as mid-density housing, could result in programs (see Action III.2.A for details), using the opportunity areas4; areas of significant investment,
greater homeownership opportunities at an even Request for Information to help determine how such as the 2016 Mobility Bond Corridors; planned As housing values and property tax rates in Austin
lower cost to prospective income-eligible buyers. these resources should be allocated. transit investments; and areas with high displacement rise to meet state-mandated expenditures, such
risk. as increased school district contributions, the tax
Action I.1.A: DEDICATE ADDITIONAL • When allocating public land to affordable housing burden on low- and moderate-income households
projects through the proposed “priority use” has correspondingly increased. This tax burden
RESOURCES TO SHARED EQUITY
process (see Action III.5.A for details), incorporate a may provoke rising displacement among low- and
OWNERSHIP PROGRAMS.
preference for shared-equity ownership projects on moderate-income households.
Like any affordable housing development, shared- appropriate development sites.
equity ownership properties require an initial Currently, according to state law, all Texas homeowners
subsidy, in the form of public dollars, discounted receive a flat $25,000 homestead exemption on their
public land, low-interest loans, or other resources school taxes, and then local taxing entities are able to
to achieve affordability. Shared-equity ownership, provide an additional exemption as a percentage of
especially in a multi-unit building, can be a more appraised value. In addition, seniors of age 65+ and
efficient use of public dollars and land than traditional persons with disabilities receive a “ceiling” on their
affordable housing, because one initial subsidy can school taxes, after which these taxes do not increase
last permanently or for 99 years. In contrast, the unless the home is substantially renovated or altered.
affordability restrictions for City-subsidized units expire Stakeholders suggested opportunities to alter these
after 40 years, which then requires new investment to laws with legislation in order to relieve the rising tax
replace these units; some properties funded without burden on low- and moderate-income Austinites,
City subsidy may become market-rate after just 15 including:
years. In order to define a final amount of resources
to dedicate toward shared-equity ownership, the City • Allow local taxing jurisdictions to offer a flat
should: homestead exemption rather than an exemption
based on a percentage of property value. A flat
• Issue a Request for Information to local exemption would proportionally provide added
organizations that further shared-equity ownership benefits to low- and moderate-income homeowners
4 “High-opportunity areas” are defined in the Atlas of Exist- but would remain a fair and equitable system for
3 Stakeholders in the Shared Housing Blueprint Implementa- ing and Historical Conditions, which is a companion piece to providing exemptions.
tion process also noted that shared-equity homes are more this Strategic Housing Blueprint Implementation Plan. The
affordable to residents over time because they have lower definition of high-opportunity areas in the Atlas is based on • Allow inheritance of the school tax “ceiling” for the
property taxes and often benefit from common maintenance data from Opportunity360, a national database of opportu- descendants of senior citizen homeowners, if the
strategies. nity metrics developed by Enterprise Community Partners. descendants are income-qualified at 80% MFI or
below. This would help to preserve generational
8 Austin Strategic Housing Blueprint Implementation: Implementation Plan housing in Austin neighborhoods. 9
Objective I.3: SUPPORT • Enter into agreements, for a period of no more companies, and minority- or women-owned Objective I.4: PREVENT
than 10 years, for refunds of municipal sales tax on businesses can apply to receive a ten-year (rather
LEGISLATION OR OTHER sales made in the zone; than five-year) abatement. DISPLACEMENT OF LOW-
MECHANISMS TO CREATE A • Enter into agreements abating municipal property Stakeholders in Austin noted that an NEZ program
AND MODERATE-INCOME
PRESERVATION PROPERTY TAX taxes on property in the zone subject to the that allows property tax abatements focused on HOMEOWNERS
ABATEMENT duration limits of Section 312.204, Tax Code maintaining affordability in existing properties should Buying a home in Austin during a time of rising
(generally, agreements must have a duration of include a habitability check of any rehabilitated housing prices is out of reach for most low-income
Austin needs a tool that can mitigate the pressure 10 years or less). The tax abatement may only be property to ensure it is up to standards and meets families, and being able to continue to afford property
on its existing housing stock, which is causing rent granted on the difference in value between the program requirements. The program will also need taxes, especially in central Austin, has become very
increases and displacing low-income renters to outside initial year of the agreement and future tax years to include rules that ensure that community benefits challenging. That means it is even more critical to
the city. A Preservation Property Tax Abatement (incremental value). and affordability are preserved if the property is sold. prevent displacement of existing low- and moderate-
geared toward preserving affordability would In order to ensure that abatements can be uniformly income homeowners. The City will continue to explore
provide a City of Austin tax abatement (regardless of • Set baseline performance standards, such as applied across the City within multiple appraisal ways to help stabilize low-income homeowners, build
the age of a property) in exchange for guaranteeing the Energy Star Program as developed by the districts, and to increase the value of the incremental on the success of existing repair and weatherization
continued affordability. The City will develop a Department of Energy, to encourage the use of abatement to property owners, the City will need to programs, and pursue policies to provide assistance
strategy to implement this tool in areas most at risk of alternative building materials that address concerns work with Travis, Williamson, and Hays Counties to to homeowners with financial hardships that threaten
experiencing displacement of low-income renters. relating to the environment or to the building costs, create an agreement around implementation of the their housing.
maintenance, or energy consumption. NEZ model.
Action I.3.A: UTILIZE TEXAS’
The City of Fort Worth has successfully used the Action I.4.A: THE CITY WILL CONTINUE
NEIGHBORHOOD EMPOWERMENT NHCD provided a memo and report responsive to
NEZ model to promote redevelopment through tax TO EXPLORE WAYS TO HELP STABILIZE
ZONE (NEZ) MODEL TO IMPLEMENT Resolution No. 20170928-050 recommending an initial
abatements; their experience can provide a guide LOW-INCOME HOMEOWNERS.
A PRESERVATION PROPERTY TAX funding allocation for a pilot NEZ program in the FY
for Austin’s proposed Preservation Property Tax 2019-2020 budget. If Council decides to move forward, Low-income homeowners are at risk of being priced
ABATEMENT FOR RENTAL PROPERTIES.
Abatement.6 Their tiered program offers benefits the next step would be to allocate financial resources, out of their neighborhoods as property taxes rise
ABATEMENT WOULD BE GRANTED including waivers of municipal fees, as well as a after which program guidelines and monitoring and redevelopment pressure increases. Innovative
IN RETURN FOR ONGOING RENTAL five-year tax abatement on incremental value for standards can be developed for a pilot program. opportunities to reduce redevelopment pressure on
AFFORDABILITY RESTRICTIONS IN rehabilitations of multifamily properties based on the currently affordable homes include the following:
AREAS MOST AT RISK OF EXPERIENCING following criteria:
DISPLACEMENT OF LOW-INCOME • Neighborhood Stabilization Loan Program: This
RENTERS. • Capital Investment: Rehabilitation costs must equal program would assist vulnerable low-income
or exceed 30% of the assessed value or $200,000, homeowners by providing long-term, low-interest
Texas state law provides that “a municipality may whichever is greater. loans to low-income homeowners who are paying
create a neighborhood empowerment zone covering a
for more than 30 percent of their income on
part of the municipality if the municipality determines • Affordability: Property must incorporate 20%
housing. The loans could be forgivable in exchange
the creation of the zone would promote: (1) the affordable units, half of which must be affordable
for the homeowner agreeing to a longer-term
creation of affordable housing, including manufactured to households making 80% of the median family
affordability restriction, ensuring that the home
housing, in the zone; (2) an increase in economic income (MFI), and half of which must be affordable
would be sold to another low-income owner and
development in the zone; (3) an increase in the quality to households at 60% of MFI.
remain owner-occupied. This recommendation
of social services, education, or public safety provided
• Accessibility: Property must incorporate 5% of is more extensively described in the University
to residents of the zone; or (4) the rehabilitation of
units that comply with Americans with Disabilities of Texas Study, Uprooted, on page 67, and is also
affordable housing in the zone.”5 Within designated
Act (ADA) accessibility standards and 2% of units included in the Anti-Displacement Task Force draft
NEZ areas, cities may:
that are fully accessible to residents with sensory recommendations.
• Waive or adopt fees related to the construction and impairments.
inspection of buildings;
• Tiered Ten-Year Option Based on Local Hiring:
Properties that incorporate the above benefits
and additionally hire local residents, locally-owned
6 More information on Fort Worth’s NEZ program avail-
5 Texas Local Government Code 12.A.378, https://statutes.
able here: http://fortworthgov.granicus.com/MetaViewer.
capitol.texas.gov/Docs/LG/htm/LG.378.htm.
php?view_id=5&clip_id=2173&meta_id=259523
10 Austin Strategic Housing Blueprint Implementation: Implementation Plan 11
Action I.4.B: ASSIST 600 LOW-INCOME program have needs beyond the $75,000 upper may apply with the permission of their landlords. For Homeowners who fall behind on their property taxes
HOUSEHOLDS PER YEAR WITH HOME limit on loan value. larger multifamily properties, Austin Energy offers in Austin are concentrated most heavily in Austin’s
REPAIR PROGRAMS, WITH THE OBJECTIVE rebates on a variety of energy-efficiency measures, gentrifying zip codes. Of the 956 homeowners in Austin
• G.O. Repair!: The program provides up to $15,000 including ceiling insulation, cool roofs, efficient HVAC with a homestead exemption and two or more years
TO HELP PRESERVE EXISTING HOUSING of assistance per home, per year to address
STOCK. upgrades, efficient water heaters, efficient lighting of delinquent taxes, the heaviest concentration is in
substandard housing conditions of low- and fixtures, and more. Central East Austin and the neighborhoods just south
The Blueprint’s original 10-year goal stated that the moderate-income homeowners within the city of Ben White on the westside of IH‐35... Thirty percent
City should “assist 600 low-income households per limits. Applicants must not exceed 80% MFI, own Many of the recommendations in Action I.4.B may of the homeowners with property tax delinquencies
year” with home repair programs. Currently, between the property as their principal place of residence. be helpful in growing the success of home repair have a senior exemption on their homestead, while the
City programs that are funded by General Obligation programs. Some opportunities to work with Austin other 70 percent have a homestead exemption but not
bonds and Austin Energy weatherization programs, this • Austin Energy Weatherization Programs: The City Energy to ensure that weatherization programs remain
works through the Austin Home Repair Coalition to a senior exemption.
goal is being met. However, stakeholders expressed successful may include:
that there is a need for continued dedication of ensure that homeowners who enter Austin Energy’s The University of Texas report suggests a combination
adequate resources to home repair programs, and weatherization programs and are eligible for City • Weatherization Assistance Program: Austin Energy of solutions, including:
for a potential re-evaluation of whether programs are assistance receive a referral, and vice versa. Austin already refers homeowners who are eligible for
currently meeting residents’ needs. Energy offers weatherization and energy-efficiency their Weatherization Assistance Program, but • Establishing a Homestead Preservation Center
repairs to residents earning up to 200% of the need more intensive home repairs, to the City’s where homeowners in financial distress could learn
There are a variety of home repair programs available federal poverty line, or approximately 30% MFI. home repair programs. The City should ensure about the tools and financial options available to
in Austin, including the following programs that exist as that participants in its home repair programs them, or funding a non-profit to provide these
of 2018: • Private Lateral Program: Homeowners who have are also aware of Austin Energy’s weatherization services. Needed services would include conducting
received a notification from Austin Water that they program in return. In addition, the City should outreach and enrolling residents in appropriate
• Architectural Barrier Removal (ABR) Program: have a defect in their wastewater private lateral line work with Austin Energy to monitor the number of programs.
This program provides up to $15,000 in home can receive assistance for repairs. households across the City earning 200% or less of
improvements. Seniors and persons with disabilities federal poverty guidelines and home values in the • Adopting a Neighborhood Stabilization Loan
who make less than 80% of MFI, and who have In order to ensure that these programs are meeting Program to providing long-term, forgivable loans
residents’ needs and that funding is distributed neighborhoods where they live. As home values
difficulty entering, leaving, or moving about their rise, this may be useful information to determine in gentrifying areas to households that need
homes, are eligible to receive adaptive home correctly across programs, the City should work with ongoing support to meet their property tax bills.
the Austin Home Repair Coalition before the adoption whether the $250,000 maximum value for homes
repairs such as wheelchair ramps, handrails, grab that can receive services remains appropriate. Stakeholders suggested that in addition to City
bars, and door widening. of the next Consolidated Plan in 2020 to monitor funding, there might be opportunities for this
needs of their clients and craft a plan that responds • Multifamily Rebates: There may be opportunities to type of program to include a non-profit arm that
• Emergency Home Repair Program: Funded to households’ needs. The Consolidated Plan and work with Austin Energy to ensure that multifamily could accept donations to support homeowner
through the Austin Housing Finance Corporation associated Action Plans and NOFAs will indicate what property owners are aware of these rebates. Uptake stabilization.
and administered by Austin Area Urban League, types of repairs are eligible and will set a total cost cap may be especially appropriate and/or required for
this program provides repairs for low-income per household for repairs that may vary each year. properties that receive other preservation-oriented • Adopting the Senior Volunteer Tax Break and
homeowners who are facing a life-threatening subsidies, such as the potential Preservation creating a program to support senior volunteer
condition, or a health and safety hazard. Action I.4.C: BUILD ON THE time. Under Texas tax law, seniors (65+) may receive
Property Tax Exemptions described in Action I.3.A,
SUCCESS OF EXISTING REPAIR AND a credit of $7.25 for every volunteer hour worked
• Homeowner Rehabilitation Loan Program (HRLP): or properties acquired through the Strike Fund as
WEATHERIZATION PROGRAMS. described in Objective II.1. toward their property taxes within a qualifying local
This loan program allows recipients to make larger program established by a taxing jurisdiction.8
repairs needed to bring their homes up to code Existing home repair programs in Austin as of 2018 are
described in Action I.4.B and include the Architectural Action I.4.D: PURSUE POLICIES TO
and make their homes safe, livable, and healthy. Stakeholders in the Strategic Housing Blueprint
Barrier Removal Program, the Emergency Home PROVIDE ASSISTANCE TO HOMEOWNERS
Services include repairs to foundation, roof, Implementation focus groups also suggested additional
plumbing, HVAC, electrical; major interior and Repair Program, the Private Lateral Program, and the WITH FINANCIAL HARDSHIPS THAT options, such as tailored tax abatements, to help
exterior repairs; complete rehabilitation of home, Homeowner Rehabilitation Loan Program. THREATEN THEIR HOUSING alleviate residents’ tax burdens. However, abatement
or reconstruction if needed. Loan terms are: loan Energy efficiency and weatherization can also According to Uprooted: Residential Displacement in options have drawbacks for a variety of reasons,
amount between $15,000 and $75,000; these be important tools in reducing housing costs for Austin’s Gentrifying Neighborhoods and What Can Be according to the University of Texas study:
loans are fully forgivable with terms up to 10 years, homeowners and renters. For small properties, Austin Done About It, published in September 2018 by the
meaning that owners who continue living in their University of Texas:7 • The City could increase local City of Austin senior
Energy offers a no-cost Weatherization Assistance citizen homestead exemptions from the current
home make no payments. However, homeowners program that serves households earning 200% or less
must repay the loan on a pro rata basis if they sell of the federal poverty guidelines and with home values
their home prior to the loan payoff date. City staff of $250,000 or less. Properties with 4 units or fewer 8 Texas Tax Code 31-035, https://codes.findlaw.com/tx/tax-
note that many homeowners applying for this are eligible; owner-occupants may apply, and renters 7 https://sites.utexas.edu/gentrificationproject/ code/tax-sect-31-035.html.
12 Austin Strategic Housing Blueprint Implementation: Implementation Plan 13value of $85,500 to values more on par with other Objective I.5: PRESERVE single-family housing. In areas with high land prices, Objective I.6: COORDINATE
Texas cities (e.g. Houston at $160,000; Dallas at mid-density residential offers lower costs by dividing
$90,000). However, this proposal has one major AND CREATE OWNERSHIP the cost of land across multiple units. The City should PRESERVATION STRATEGIES
disadvantage -- the exemption would apply to OPTIONS FOR HOUSEHOLDS AT work to adopt Land Development Code changes that WITH INFRASTRUCTURE
seniors of all income levels because the City is assist in achieving the numerical development goals
unable to adopt an income requirement under
80-120% MFI established for each Council district in Objective
INVESTMENTS
state law, and would therefore be likely to increase In response to City Council direction to provide IV.1. These changes should add new capacity to Proactive preservation strategies can be particularly
tax burdens on young residents, families, and recommendations on strategies to create more develop at least 20,000 more mid-density residential helpful if undertaken early and in coordination with
multifamily rental properties (which would be homeownership options for households earning from units than would be allowed under the current Land infrastructure improvements. These activities can
passed along to renters). 80% to 120% MFI, staff and stakeholders developed Development Code. often lead to increases in property values and rents;
a list of potential strategies to support households in therefore, working with building owners early in
• The City could also freeze City property taxes for this income range, including exploring the potential for Action I.5.C: EXPAND THE CITY’S the process to help preserve the affordability of
seniors, but this has the same disadvantages as the funding sources for this income category, potentially S.M.A.R.T. HOUSING PROGRAM FOR properties will help stabilize neighborhoods and allow
increased senior homestead exemption. having higher income limits in future General HIGHER INCOMES. existing tenants to remain in their communities.
Obligation Bond elections, incorporating Land Separate recommendations on improving developer
• The City could adopt a tax abatement program for Action I.6.A: WORK WITH BUILDING
Development Code changes, and expanding the City’s participation in the S.M.A.R.T. Housing Program
low-income single-family homeowners using the
S.M.A.R.T. Housing Program for higher incomes, among OWNERS EARLY IN THE PROCESS TO
Neighborhood Empowerment Zone mechanism are included in Actions IV.3.A, IV.6.A, and IV.7.A.
others. (Assuming 0% down, an interest rate of 3.62%, Expanding the S.M.A.R.T. Housing program to
HELP PRESERVE AFFORDABILITY OF
described in Action I.3.A; however, this abatement
and an annual effective property tax rate of 2.5%, an incentivize units for moderate-income households PROPERTIES.
could only address taxes on the increase in property
affordable home purchase price at 80% MFI for a 4 at 80 - 120% MFI could be an opportunity to expand The City and its public-sector partners have already
value each year, meaning that the program
person household would be approximately $225,000 production. However, these higher-income units might planned and begun preliminary engineering for
might cost more to administer than the benefits
and at 120% MFI would be $348,000. These estimates receive a lower level of incentive than more deeply a number of major infrastructure improvements,
it provides to residents. The abatement would
could change based on the underlying assumptions affordable units in order to ensure that market rate including roadway improvements through the City’s
also have to expire after 10 years, per state law,
and interest rates). developers still see an advantage to meeting the needs 2016 Mobility Bond and transit investments laid out
so it would not provide a permanent solution for
homeowners. Action I.5.A: EXPLORE HIGHER INCOME of lower-income residents. For example, developments in Capital Metro’s Connections 2025 plan. Working
incorporating only 80 - 120% MFI units might receive with owners of existing housing near all major City
LIMITS IN FUTURE GENERAL OBLIGATION
rapid permitting but not capital recovery fee waivers, infrastructure investments to provide incentives
BOND ELECTIONS. or another tiered system. for affordability preservation will help maintain
Stakeholders in the SHBI focus groups thought that existing market-rate affordable housing, so that
housing incentives for 80 - 120% MFI households Stakeholders felt that the first priority for NHCD it is not demolished for new housing or does not
should receive primary support from regulatory and City stakeholders should be ensuring that the experience significant changes in price. The University
programs such as the City’s density bonus programs, S.M.A.R.T. Housing program is working as designed and of Texas Corridor Housing Preservation Tool can
rather than from bonds or other financial resources. authorized as described in Actions IV.3.A, IV.6.A, and help to pinpoint areas where currently affordable
However, as housing prices continue to increase IV.7.A; once issues with the program’s core functions properties are at risk; the Strategic Housing Blueprint
in the City of Austin compared to the metro area, have been corrected, NHCD can consider and provide Implementation consultant team has used this tool for
stakeholders agreed that NHCD should continue recommendations on how to expand the program for the 2016 Mobility Bond Corridors to establish numeric
to monitor the situation by conducting an annual 80 - 120% MFI households. goals for production and preservation of affordable
evaluation of median home prices and rental costs in units within ½ mile of these corridors (see Action
the City against MFI income levels. I.8.A).
Action I.5.B: : INCORPORATE LAND Preserving affordable units generally works best in
DEVELOPMENT CODE CHANGES THAT areas that have rising but not maximum development
ENCOURAGE MID-DENSITY RESIDENTIAL pressure, and a strong presence of existing market
DEVELOPMENT. rate and subsidized affordable properties. The Corridor
Analysis included in the Atlas of Existing and Historical
Households at 80-120% MFI would benefit from having Conditions assesses the development pressure and
access to a wider range of mid-density housing choices the number of vulnerable affordable units along
consisting of three to six total units. These mid-density 2016 Mobility Bond Corridors, using the University
residential choices offer housing units that match Mid-density residential can take a variety of forms, including of Texas Corridor Housing Preservation Tool. The
a neighborhood context, while allowing for denser townhomes, three or four plexes, or small multifamily devel- Strategic Housing Blueprint Implementation team
infill and creating more overall housing units than opments (image source: City of Austin).
14 Austin Strategic Housing Blueprint Implementation: Implementation Plan 15has recommended production and preservation goals Objective I.7: USE including, but not limited to healthy food options in Action I.7.B: INCREASE COORDINATION
within ¼ mile of these corridors based on the results of east Austin; BETWEEN RELEVANT CITY DEPARTMENTS
the Corridor Analysis (see Action 1.8.A for additional INCENTIVES TO SUPPORT THE TO IDENTIFY POTENTIAL INCENTIVES FOR
• Development of vibrant, mixed-use commercial
details). This analytical technique can be replicated PRODUCTION OF LIVING WAGE corridors; THE CREATION OF MORE LIVING WAGE
in the future for other corridors and sites of major
public investment using the Corridor Manual, which is
JOBS JOBS.
• Leverage of public investments to improve positive The Economic Development Policy has identified
provided as an appendix to this Implementation Plan. Incentives should be focused on improving the
health outcomes for low-income Austinites incentives for the creation of more living wage jobs
economic conditions of current lower income
Tools for affordability preservation in areas near unemployed or underemployed residents to spur These objectives are entirely consistent with the through an extensive stakeholder engagement process
infrastructure projects include: opportunities that enable them to better afford to approach to incentives outlined in the Strategic in 2017 and has produced a set of recommendations
live in Austin. Increasing the number of “living wage” Housing Blueprint. EDD has provided detailed to update the incentives policy with a focus on creating
• Affordable Central Texas “Affordable Housing those jobs. For more information, see Action I.7.A.
jobs (jobs that pay a high enough wage for a person Economic Development Guiding Principles, a Chapter
Conservancy” Fund: The Affordable Housing
to meet the basic living expenses for an area) would 380 Policy Framework with which the City can create
Conservancy fund is operated by Affordable Central In the future, EDD plans to coordinate with Purchasing
enable residents who currently work in minimum niche programs to achieve priority goals and the
Texas, a non-profit that is not affiliated with the and other agencies to further the development of
wage jobs to earn enough to meet the cost of living in Business Expansion Program Portfolio Guidelines as
City. Currently, this fund is focused on acquiring and minority- and women-owned business participation
Austin. The living wage for City of Austin employees the first program to be rolled out. The second priority
preserving market rate multifamily rental properties and small businesses in the City of Austin, including
was $15.00 per hour as of October 2018. Greater program for rollout will be a Locational Enhancement
where rents are currently affordable to families at provision of direct business coaching and enhanced
coordination with relevant city departments should Program that will seek to address place-based
60-120% MFI. For more information and next steps, public-sector contracting opportunities.
be pursued to identify potential incentives for the challenges with incentive tools. The Chapter 380
see Objective II.1.
creation of more living wage jobs. Policy requirements include all construction work
• Preservation Property Tax Abatement: The City must comply with the City’s living or prevailing wage
can grant property owners who agree to maintain Action I.7.A: FOCUS INCENTIVES ON guidelines. The Business Expansion Program Guidelines
affordability a tax abatement on the incremental IMPROVING THE ECONOMIC CONDITIONS focus on supporting local businesses that provide jobs,
value increase of their property for up to 10 years. OF LOWER INCOME UNEMPLOYED OR community benefits and pay at least or above industry
This abatement will likely be most valuable once UNDEREMPLOYED RESIDENTS. average wages (as defined by the Bureau of Labor
the infrastructure improvements are completed, The City of Austin’s Economic Development Statistics and Occupational Wage data) for full-time
because that is when property values will increase Department (EDD) recently completed a review of employees. A sub-category of the Business Expansion
most rapidly. Therefore, timing these agreements their incentives policy and have produced a set of Program includes incentivizing businesses that focus
appropriately will be essential; there may be recommendations for revising the City’s incentives on the hiring, retention and career growth of hard-to-
opportunities to begin the 10-year abatement policy for future economic development. The new employ individuals or those with economic or socio-
period when the infrastructure investment is proposed Economic Development policy recommends economic barriers. In addition, incentives are available
officially completed or placed in service. For more that incentive programs focus on: for relocations of businesses into Austin; these require
information and next steps, see Action I.3.A. businesses to provide direct community benefits and
• Creating living or prevailing wage jobs, with meet program criteria/requirements. The programs
• Tax Increment Financing (TIF): Creating Tax equitable benefits; also offer additional bonus points and/or additional
Increment Reinvestment Zones, or tax increment incentive allocations to those businesses who offer
financing (TIF) districts, around major infrastructure • Addressing lack of job opportunities for the affordability and transportation-related solutions, such
investments allows the City to capture the traditionally hard-to-employ; as a housing stipend for their employees to help meet
increased property value generated by these cost of living pressures and encouraging alternative
investments and redirect it for affordable housing. • Incentivizing the creation of middle-skill jobs for
existing residents; modes of transportation and flexible work hours,
TIF funds may be used for Funding could also be among many other community-supportive bonuses.
utilized for other preservation efforts such as home • Supporting small, local, creative, cultural and
repair, forgivable loans to owners of substandard heritage businesses that suffer from lack of access NHCD should coordinate and support EDD to the
properties to improve their condition if they keep to affordable space and financial stability; extent needed to implement the new proposed
the property affordable, or other preservation Economic Development Policy and its associated
options based on local conditions and needs. For • Identifying and responding to specific issues programs once it is formally adopted and
more information and next steps, see Action III.6.A. (beyond those outlined above), such as: implemented.
• Increased access to goods and services in
communities that are traditionally underinvested,
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