City Council, District 9
We need to protect renters from steep unexpected rent increases. Affordability is a nation-wide issue. Austin is not the only city pushing residents out. Austin, and other cities, are promoting density and encouraging developers to build affordable housing. With little oversight and lack of transparency, there is a high potential for corruption. A special on PBS Poverty, Politics, and Profit: Frontline, outlines how pervasive this problem is. What Austin offers to developers who build affordable housing into their units is an extra floor. Often building the extra floor is too expensive and developers opt to pay the fine. Under this current program, only 1,450 units of affordable housing will be built over the next decade. If we want to meet the needs of the city, that number needs to be around 60,000 (Austin Monitor, 2018). We need to revisit Lease-to-Purchase programs, but we need to do so carefully, fiscally, and with complete transparency. During the nineties, Austin had a lease-to-purchase program called SCIP (Scattered Cooperative Infill Program). Pamela Franklin was the only resident who qualified for the program over the fifteen year period. When she tried to purchase her home, the city denied that the program had ever existed. When the city was proven wrong, they still tried to deny her the purchase of her home over a technicality. Pamela Franklin had her day in court and won. (Austin American Statesman, 2014). Cleveland has the largest lease-to-purchase network and the program seems to be working. Over 80 percent of those who participated in the program have transitioned into homeownership. This is how it works. The Cleveland Housing Network (CHN) uses Low-Income Housing Tax Credits (LIHTC) to attract equity investors who, in exchange for the 15-year tax credits, help CHN to buy single-family rental properties. CHN then offers these homes for rent at an affordable price. At the end of the 15-years, renters who have successfully made it through the program are then able to purchase the home below the market value, usually for less than $20,000. The organization is able to keep the home purchase price low because the LIHTC credits allow it to buy the home without going into significant debt. Another successful program is Rent-to-Buy Program in the U.K. The program is designed to give renters affordable rent, save for a deposit, and then either buy the new home or a different home at a later date. Non-profits carry the bulk of the low-cost rental housing and bid for a share of government funded low-cost loans to build 10,000 new homes within two years. This program is aimed at the middle class. Single people earning up to $50,000 or couples earning up $100,000 are eligible to participate in a program that will offer fixed rents at 20 percent below the market value. At the end of the fifteen year program, the tenant can refused to buy or use the equity to buy at another property. (Center for American Progress). Again, while I think that lease-to-purchase have some major positives, the city and the citizens must be diligent and clear, there has to be full transparency.