City Council, District 9
Make Austin affordable again. I am working to keep the working and creative classes in Austin. We must also demand that our taxing entities collaborate. Another reason why our property taxes are so high is because of our five taxing entities. We have the City of Austin, Travis County, AISD, ACC, and Central Health and they do not collaborate with each other. These taxing entities are doubling dipping.
The city has very little oversight over where our tax dollars are going. In 2012, taxpayers authorized Central Health to give UT-Dell Medical Center $32 million a year to help cover the cost of health care for the poor. We are a giving community, but that money did not go to the poor. Instead, that money paid for the Dean’s faculty salaries, fundraising, and admissions.
We need to incentivize local landlords (both commercial and residential) to give longer leases. This is not rent control, this is rent stabilization. We need to protect renters from steep, unexpected rent increases. Affordability is a nation-wide issue. 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 by Frontline: Poverty, Politics, and Profit, outlines how pervasive this problem is.
Also, our incentives to developers to build affordable housing is weak. Austin offers developers, who build affordable housing into their units, an additional floor. Often building an additional floor is too expensive and developers opt to pay the fee in leu. 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. Real estate is market driven, especially in Texas, where there is very little protection offered to renters and buyers. This is why Code Next could never really offer affordable housing. Code Next is a market driven plan in a market driven state. Now, that said, we do need to change our land codes to accommodate our new residents. By 2030, it is estimated that the population of Austin will be three million. Doing nothing is not an option and doing nothing will most definitely make this city unlivable.
That said, we can make Austin more affordable by revisiting lease-to-purchase options. 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.
Although Austin tried and failed, we can look to Cleveland to get it done right. Cleveland has the largest lease-to-purchase network, and the program is working. Over 80 percent of those who participated in the program have transitioned into homeownership. This is how the program 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 the Cleveland Housing Network 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 can keep the home purchase price low because the LIHTC credits allow it to buy the home without going into significant debt. Again, while I think that lease-to-purchase programs have significant positives, the city must be diligent and transparent.