Mueller and Travis Central Appraisal District Sing Kumbaya

Agreement in dispute over affordable housing tax appraisals

Apparently dodging the courtroom, the Mueller Foundation and the Travis Central Appraisal District have (via mediation) tentatively resolved their disagreement over property tax appraisals on homes in the Mueller Neighborhood’s Affordable Homes Program.

Mueller Housing (Courtesy of City of Austin)

Pending ratification from affected homeowners, both sides are calling the agreement a “win-win” for the homeowners and the taxing district. Patti Summerville, executive director of the Mueller Foundation, told the Chronicle Monday that following three days of meetings among the parties – prior to a scheduled June 20 trial of the first lawsuit filed by Mueller homeowners – the mediation bore fruit, with an agreement that will allow the continuation of the Mueller program, which guarantees that 25% of the development’s homes are maintained at affordable prices. (A parallel program includes rental units.) “All of us were in the room together,” said Summerville, “and we were all determined to do whatever we could to work this out.”

Attorney Judith Hargrove, representing TCAD in the dispute, expressed similar sentiments. “We were finally able to sit down, really listen to each other, and see the situation from each other's perspective. That enabled us to resolve the disagreement to everyone’s satisfaction.”

Under the program’s basic terms, homeowners in the program (who have qualified by earning 80% or less of local median family incomes) are eligible for Foundation-subsidized housing prices. Should they choose to sell the homes, under the Foundation’s first-refusal purchase option they can accrue only an annual 2% in equity over their original purchase price. However, over several years the Foundation had then resold some of the homes at Mueller’s spiking market values to help underwrite the overall program. As a result, TCAD had ruled that all the homes, sold or not, had to be appraised at those unrestricted market values – even though none of that additional income had gone to the homeowner. Several homeowners had appealed the ruling and been denied – and a few had filed suit, with more in the legal queue. (More than 300 current homeowners were potentially affected by TCAD’s ruling.)

Under the parties' Memorandum of Agreement, the Foundation will issue new purchase option agreements that more precisely define the sale restrictions, and there will be stricter restrictions on the number of homes the Foundation can release from the program for market-value sales. Summerville noted that continuing to subsidize the affordable homes will be more expensive, but said the Foundation “is determined to sustain the affordability at that level” throughout the life of the homes. (Nationwide, many affordable housing programs establish affordable prices only for the initial purchase.)

In a release, Summerville said of the agreement, “We’re pleased with the result and we’re moving forward to place more deserving and qualified families into quality homes in the heart of Austin.” For more on the story, see Thursday’s print edition.

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KEYWORDS FOR THIS POST

Mueller Neighborhood, Travis Central Appraisal District, property taxes, Mueller Foundation

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