Public Notice: Affordability Amended

Earlier this month, researchers from UT's School of Law released a damning report on a 2015 change to the Texas Local Government Code allegedly intended to increase affordable housing. Instead, the report finds, it's been a bonanza for private for-profit developers, producing apartments that are often as expensive as market-rate units while undermining local tax revenues.

According to the report, code Section 303.042(f) is "delivering property tax breaks to apartment developers of close to $1 million a year per property on average." These projects also get a 100% sales tax exemption on construction materials for an additional one-time tax break averaging $1.3 million per project.

Led by UT law prof Heather Way, the report team found that tax revenue losses under these public/private partnerships far outstrip their marginal returns. That's because loopholes allow projects to "end up largely targeting middle-income renters making 100-115% of the area median income [AMI] – a group of renters adequately served by the market." In fact, the report notes that Texas has a surplus of units for households making 80% to 100% of the area median income, even in the state's most populous counties. (Travis County's median family income for four people is currently $97,600 – nearly double the salary of a starting AISD teacher and probably not what most folks have in mind when they think of a household in need.)

If you're up for 63 pages of teeth-gnashing, you can read the full report here. Meanwhile, a few highlights:

• Just 2% of units in properties built under this section to date are restricted to renters making less than 60% AMI.

• While a certain number of units are supposed to be reserved for renters making below 80% AMI, there's no limit on the rents they can charge, so almost half the projects have no reduced-rent units at all, and on average they charge 63% more than they should.

• At some surveyed projects, leasing agents insisted they had no income restrictions or income screening for any units.

• Moreover, "the 80% AMI restriction in the statute is not required to be adjusted for household size," meaning managers can count studio apartments as if they're meant to be occupied by a four-person family. So even an "affordable" unit "actually ends up targeting households making up to 100%-115% AMI for the efficiency and one-bedroom units (which is where the vast majority and often all of the income-restricted units in [these] deals are concentrated)."

• In Austin, for example, an individual making $76,000, renting an efficiency for $2,000 a month, could count as an affordable unit, and qualify a project for a 100% tax abatement.

• One Austin project showed an 80% MFI "affordable" rent of $1,563 per month – over $350 more than the median rent at comparable properties within a three-mile radius.

• Very few properties accept tenants with rental vouchers from local housing authorities, whose largest client groups are predominantly Black and Hispanic. (Austin tried to ban this practice, but it was overturned.)

• The leasehold interests on these public-private partnerships can be easily flipped to a new buyer without the consent of the local public partner, making it "a highly liquid asset attractive to private equity investors."

If you're wondering where this craziness originated, it was a last-minute floor amendment by then-Sen. Craig Estes, R-Wichita Falls, who mistakenly assured colleagues that this obscurely worded change would apply only to nonprofit developers. The language came from a lobbyist for the NRP Group, an Ohio-based for-profit developer that has since been involved in roughly a third of the developments built under the amendment (both of the deals approved by the Austin Housing Authority to date are NRP projects). As the Houston Chronicle reports, NRP made a $10 million profit on its sale of a single tax-­exempt project in San Antonio, barely a year after its completion.

On a more positive note, the report also offers 10 excellent common-sense legislative recommendations that would largely fix this mess. But will the 87th Texas Legis­lat­ure care enough to act? Stay tuned.

Be Counted

I'm sure you've registered to vote, and sent in your census form, but maybe you know someone else who hasn't. We're down to the deadline for both efforts, and they're both crucial – see more info elsewhere in this section but briefly:

• Pending legal or congressional action, Sept. 30 is the last day for the 2020 Census count; for more info, and to fill out the questionnaire, visit ATXCensus2020.com.

• Monday, Oct. 5, is the last day to register to vote in the Nov. 3 election. See p.13 of this week's paper ("Travis County Voter Registration Deadline Is Oct. 5"), or attend a COVID-19 safe Voter Registration Drive this Saturday, Sept. 26, 11am-2pm at the NAACP Austin Branch, 1709 E. 12th.

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The Cool House Tour is an annual event produced by Austin Energy Green Building and Texas Solar Energy Society, showcasing homes "built to high standards of energy efficiency, sustainability, comfort and regional design." This year's edition is an interactive webinar featuring an urban accessory dwelling, a rural homestead, and an affordable multifamily community, with the owners and building professionals sharing their experiences, offering tips on sustainable design and construction, and answering questions live. Tickets are $10 ($15 Continuing Education; $5 students) at www.coolhousetour.com. The tour is 2-4pm, Sunday, Sept. 27.

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Party for the Parks at Home is this year's version of the annual fundraiser for the Austin Parks Foundation – a special to-go menu from the chefs at Emmer & Rye, paired with a cocktail "Funbox," and a livestream program featuring Jackie Venson and special guests. The livestream is free, but buy tickets for $125 or $175 for the food and funbox, and to support our city's parks, trails, and green spaces – it's a tough year for APF, which is usually the primary beneficiary of the canceled ACL Festival. Get tickets now at party.austinparks.org; the event is 7:30pm Wednesday, Sept. 30.