The Austin Chronicle

New Homestead Exemption Proposal

By Michael King, June 3, 2015, 2:00pm, Newsdesk

In a plan first posted Wednesday on the City Council’s message board, Mayor Steve Adler floated a revised version of the proposed 6% property tax homestead exemption – featuring a 5% exemption and a separate 1% equivalent (about $700,000) in funding to be dedicated “to programs that directly assist renters in our community.”

The new version is explicitly aimed at blunting the criticism from some quarters (including on the dais) that a homestead exemption primarily benefits homeowners, and in proportion to the value of their homes. Adler and District 4 Council Member Greg Casar laid out the proposal at Wednesday’s Council work session, with Adler arguing that the city needs to take a variety of approaches to the “affordability crisis” to assist “all sectors of the community,” and more specifically to avoid aiding one group of residents at the expense of another.

The exemption is on the agenda for Thursday’s regular Council meeting, with its specific terms still to be specified – if the exemption is to take effect for FY 2016, under state law it needs to be approved by June 30, even though a FY2016 budget proposal won’t be available until late summer. Council discussed the latest version (seen as the first phase of an eventual 20% exemption) at length in Wednesday morning’s work session. It appeared that a majority found reason to support the new proposal (subject to Thursday discussion and tweaking), although a couple of CM’s – prominently D8 CM Ellen Troxclair and D6 CM Don Zimmerman – objected to its limitations and argued in support of an immediate 20% exemption.

The Adler/Casar proposal, as posted in the Council Message Board, follows here:

Modified Homestead Exemption Proposal

Post by Steve Adler Wed Jun 03, 2015 8:58 am

Following conversations with Council members, including at work sessions, CM Casar and I will lay out a modified homestead exemption proposal that continues this council’s efforts to address fairness and affordability. Such a proposal would show this council’s continued ability to work together, and combined, the two elements roughly cost the same as for a 6% exemption. However, this proposal provides that council approve a 5% homestead exemption at this Thursday’s meeting, and at next week’s meeting, we consider a resolution affirming the council's commitment during the budget process to dedicate 1/5 of the incremental cost of that 5% homestead exemption (paid for with a rate increase) to programs that directly assist vulnerable renters in our community. Combined, these two elements would roughly equal the incremental cost of a 6% exemption. At this time, we believe the most effective program would be our existing Tenant Based Rental Assistance Program, however the specific programs to be funded would be identified through the budget process and the eventual funding level for such a program or programs is not necessarily capped with this initial commitment.

We believe a homeowner’s exemption and this type of assistance for renters in need are but two of the many tools we must use to address our affordability crisis. We cannot look at any one of these tools in isolation, but rather must view such tools as a part of a continued effort to help all people across our community who are dealing with our city’s affordability crisis. Not every tool will help every person, but each tool will advance our fairness and affordability focus.

This council looks forward to working with city staff and our community to identify and implement other tools to address fairness and affordability, such as:

- restructuring the drainage fee,

- challenging commercial appraisals,

- enabling homestead preservation districts,

- increasing the supply of housing,

- making changes to the permitting process and rewriting the land development code to facilitate construction of more housing that is affordable, and

- creating a substantial fund to preserve currently affordable housing units, among many other possible tools.

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