https://www.austinchronicle.com/daily/news/2017-09-14/tovo-and-casar-unfiltered-on-codenext/

Tovo and Casar Unfiltered on CodeNEXT

By Nick Barbaro and Michael King, September 14, 2017, 7:00am, Newsdesk

If you’re here, it’s because you’ve sought out the full transcription of the Chronicle’s CodeNEXT conversation with Mayor Pro Tem Kathie Tovo and Council Member Greg Casar, found below.

Reaction to the Draft 2 Preview

Council Member Greg Casar: I’m happy to start with that. A lot of the answers we got yesterday to our questions were, wait until next week [release of the second draft], which is fine. But something that I thought was useful for me in trying to judge how worthwhile the changes are between Draft 1 and Draft 2, and whether or not CodeNEXT lives up to my expectations, wasn’t necessarily the changes that were presented between the two drafts, but actually the later modeling and forecasting portions of the presentation. Because, for so many people that I talk to, in my own district and across the city, in the end – while there is some importance to whether a setback is at 15 feet or 20 feet or 25 feet – what folks really want to know is not just this individual zoning case, but in this actual citywide rewrite, is what the citywide impacts – good, bad, or otherwise – are or could be.

So I think it was really important for us to see that there is real work being done, to show how many more folks we can get near transit so we can have a better bus system, hopefully a real rail system. We saw in the first presentation (not in this one), how redevelopment would happen, could gentrification be slowed or accelerated, through this process. They promised us, through our questioning, where is new housing going to be – where it would be anticipated if we leave the code exactly as it is, and where could it go under the next CodeNEXT drafts. And I think it would be very illustrative to see where that housing would go under Draft 1 and under Draft 2, so that we understand how changes – how individual changes to building form and building types, and to the mapping – actually shift the forecast. Because ultimately for me, this whole process is really an important opportunity for us to change the course that we’re on, because I think that most folks don’t think the course that we’re on is a good one, and to change it for the better.

That’s knowing that folks have tried really hard, and have done really important work up to this point, and not casting any aspersions on past efforts; but knowing that this has to be an effort to make things better, in the ways that our constituents in the [2014] 10-1 election, have asked us to. I think that’s really hard … when things can get so heated on a particular zoning case in a particular neighborhood about the specific height of a building. We have a rare opportunity for us, in talking about CodeNEXT – it’s important to know what those short-term impacts are, but really to know, with a whole rezoning of the city, that so much will be mid-term impacts and long-term impacts, and for us to be thinking about what kind of a city that we want, 15 or 20 or 30 years from now, and to be talking about those citywide goals.

I feel like in the early CodeNEXT conversations, it was really frustrating to me because it was difficult to talk about those things. But I think the presentation yesterday, near the end, helped lend a hand towards better understanding what those are, and I think it will be really interesting to see how those change between Drafts 1 and 2, so we can know what changes to the code and mapping yield us: better or worse public transportation options, better or worse economic segregation, better or worse housing supply in high-opportunity areas vs. gentrifying areas. I think that level of conversation will really help all of us on the dais. As Council Member [Delia] Garza always says when she goes to Town Halls about CodeNEXT, people are asking, How will this impact the rent in the future, more than really specific questions like, What’s FAR, or R2 vs. R4?

Those things are important, because FAR [floor-to-area ratio], for example, while it clearly changes the aesthetics of the building, it also changes where things are more buildable. That’s what interested me more about yesterday’s presentation than being told, I’ll learn more things next week.

Mayor Pro Tem Kathie Tovo: For me, let me just say about the code revisions: It was hard to get a sense of really what’s coming – that was pretty clear – but it does seem that there are some basic assumptions that haven’t changed. One of them is that “market desirability” is continuing to shape the mapping, which I think is inappropriate. That was, I thought, and unfortunate continuation. We’ll have to see, when the map comes out, and the actual text comes out, whether that is really prevalent throughout the maps, and the way things got mapped. We can talk more about why I think that is such a concern, in another question.

In terms of what sound like micro-level issues, but are major issues – it sounds like they have taken into consideration issues about compatibility and McMansions, and smoothing things out across the city, which I think is a good thing. It does seem to me that we’re still not looking at a code that is going to be mapping the corridors and the activity centers, which was part of the main intent of the whole process. If I’m right about that – and we won’t know until next week – that’s something of a disappointment.

The analysis we had from [consultant] John Fregonese is an interesting one. We’ve had several, so I’m not clear how this analysis differs from the ones that we got earlier. The first one we got showed a 25% displacement rate – redevelopment rate, for example, in “T4” [Transect 4] neighborhoods, like the ones that have been mapped in Bouldin Creek and Heritage [neighborhoods], and in some areas around under-enrolled schools in East Austin. We continue to have analyses, but the metrics keep changing, and the methodology changes. I have to say, that was an interesting discussion yesterday, and I think it raises a lot of questions – but I’m not any closer to understanding that analysis than I was earlier.

What is also a question in my mind – and I raised it in yesterday’s session – we had a significant amount of staff work go into a [housing] capacity study, here at the city. It was most recently updated in 2012 or 2014 (I’ve forgotten which). It looked at neighborhood planning areas pretty closely, and released a 25-page report looking at different variables, and getting really specific about rates of growth in neighborhood by neighborhood – and estimating not just the number of units that could be built under the existing zoning, but also the population numbers neighborhood by neighborhood – applying different metrics to different neighborhoods, based on what was on the ground, and costs, and so on – a variety of variables. I’ve asked a couple of times now, how does the analysis you’re doing (as our consultants) interact with that work done earlier?

When I’m looking at that capacity study and I see that, for example, in 2012, the analysis shows that Bouldin Creek could increase its housing stock by, say, 50%, using existing [zoning] entitlements [building rights] – they have 2,819 units, at least in those days, and they could add an additional 1,400 units in (with no changes in the zoning), increasing the population by 3,234. Allandale, at that time, had 3,536 units, and could increase it by using existing entitlements by 2,367, adding an additional almost 4,700 residents.

So you look at the numbers that the consultant is using in his analysis, and I’m looking at the capacity analysis, with these projections – and frankly these projections, I think may be higher, but I’m sure – and I can’t square them yet. Four or five months ago I asked the staff to ask me square the relationship between these different analyses and projections, and I haven’t gotten an answer back yet to that question.

So I think that’s a reasonable line of inquiry. One thing that the consultant mentioned yesterday that I think we need to probe on – I think I heard him say that he was going to spend some more time looking at redevelopment. I wasn’t clear – and I think you [Casar] asked him to come back to it, and we didn’t get those percentages listed again, but he did estimate the number of acres of vacant land and the number of acres of redevelopment. I think we need to be really clear, of the new units they’re projecting – not just where they are, but how they fit into some other things that we’re watching, like high-opportunity [wealthier] areas, like under-enrolled schools, like areas that are designated historic districts – some of the other things that I think are critical to the discussion.

We also need to know how much of that is redevelopment, and how much of that is redevelopment of existing multifamily housing – which is likely much more affordable than what would ever come in its place. I believe I heard him say they’re going to spend some more time on that, but that is something we absolutely have to know.

On “Conflicting Narratives” about CodeNEXT

Austin Chronicle: There are narratives regarding CodeNEXT and planning decisions generally: 1) that current code and policies are too restrictive … causing sprawl instead of the density that most people agree that we need, and reducing affordability by restricting housing supply; 2) the more we encourage density in existing neighborhoods, the more land costs go up, and the more we’re forcing out existing residents, and the existing “small ‘a’” affordable units are getting torn down to build much more expensive condos, and other units that aren’t family-friendly. Is there any way CodeNEXT can address both of those problems, or does it have to be one against the other? Conversely, could it instead become just a translation of current policy into a new, cleaner language that makes it easier to do the development work that they need to do, but it’s policy-neutral?

KT: The expectation is certainly that the code would do some of the former, in making the code cleaner, more consistent where it’s internally raising contradictions, it would simplify them and try to bring it to a place where it’s more easily understood. That was my understanding of what we were doing. It was also my understanding of what we were doing, that it would take Imagine Austin [the city’s adopted 2012 comprehensive plan] and project that out across the city – which is largely looking at our corridors, and activity centers. And part of Imagine Austin was to append all those neighborhood plans and kind of follow those along. To me, it’s diverged much from that original intent.

I have concerns, absolutely, in that second category [displacing current residents by imposing density on neighborhoods]. As I look, and study, and read, and talk to people, it is really clear that if we rezone much of our central city and Central East Austin – so that lots that can currently accommodate two units can suddenly accommodate as many as eight – that will certainly drive up land values.

Almost every day – in fact, just today, I had a constituent who came to City Hall, to tell jokes and to share some information, but also wanted me to know, he’s being pushed out of Bouldin Creek. He’s a retired school employee, he’s been there for decades, and is struggling to hang on to a neighborhood that used to be really affordable. So it’s absolutely a concern of ours. There’s very little we can do to intervene in a market that’s driving up housing costs, and I think it’s foolish to promise that our land development code is going to suddenly create lower land values. It just isn’t. But I think we can absolutely exacerbate and accelerate a system of displacement, if we go in and start up-zoning people’s properties in dramatic ways.

And what we also need to be very conscious about – it doesn’t just cause displacement in those most central neighborhoods. It likely will cause a domino effect, and cause rings of displacement, as former Central Austin residents move out a little bit, and displace people in those communities. To the extent that we’re making new planning decisions within CodeNEXT, I think they should address some of the challenges we’re having, and displacement is already one; demolitions is already one. We don’t seem to be introducing new tools for combating those. What I think we see instead, the consultants looked at maps where demolitions are occurring, and said, if these demolitions are going to occur, let’s get more units in place of the ones that are going away, instead of saying, are there planning tools we can introduce that would help slow down the rate of demolitions, and the displacement that is characteristic of the market.

Combating Market Forces

AC: You believe the market is being allowed to drive the code rewrite process?

KT: I think there’s too strong of a relationship there, yes. And I think we really run the risk of increasing the number of people who are moving out of their communities. There are other consequences of that; one of them is that we’re not just replacing the housing with higher cost housing, we’re replacing it, likely, with smaller units. Those are very unlikely to house families with children, and that’s been a longtime trend with this city – that families with kids are moving out of the central city. It’s had an impact on our neighborhood schools, and in some of areas where our neighborhood schools are in trouble [from underenrollment], you can see the up-zonings that are proposed around it, and those are not going to help us address that situation. Metz [Elementary] is one, Sanchez another – if you look at some of those schools that have been targeted by the school district as under-enrolled, if you look at those initial maps, they’re proposing up-zoning single-family housing to what would likely be smaller units at a higher density.

GC: It’s low-income folks and moderate-income folks that are being hit the hardest by the housing crisis in our community and in the city, and other cities are experiencing similar market forces all over the country. When you talk about the “two narratives,” I sort of feel like an orphan – I don’t feel like I or many of my colleagues easily fit or live in either of those two narrative worlds. Of course we want to help people who are struggling with these issues now, and all policy changes have pros and cons all across the city, for different people. My focus has been, knowing we can’t just do the development code changes and expect to help with this issue. We have a really broad area of concern, and a much smaller area of control. We have to work to pass bigger affordable housing bonds, Council Member Renteria and I sponsored a linkage fee idea [“linking” affordable housing fees to new construction, blocked by the 2017 Legislature]. In our housing committee, we’re going to talk about TIFs [tax increment financing], and PIDs [public improvement districts], and figuring out how to bring back homestead preservation districts, despite what happened at the Legislature.

There are areas we can help with this, and the land development code has to be one. I want to work on this in such a way, so that in 10, or 15, or 20 years, to have a chance of being a more economically integrated place than we are right now – to even have that opportunity. The path that we’re on now, seems to be largely demolitions of single-family homes being replaced by larger single-family homes, and gentrification of our multifamily units – not largely from multifamily being torn down, although that does happen and we need to have policies to slow that from happening and I have championed those policies – but remodeling, and up-filtering, and rents going up in multifamily, is what has gentrified and displaced so many constituents from District 3 [near Southeast] to District 4 [North Central] and from District 4 up and out of the city.

I remember knocking on doors in my first campaign, and asking folks if they were registered to vote, and they would say they were registered to vote – but our database showed they were registered to vote in District 3. And I was hearing from those same residents, that if the rent were to go up $100, it’s not that you would have to sell your house – it’s that you have nothing. You’ve got nothing. So figuring how it is we can work on some of the really critical short-term issues, but also plan our city in a way that we can create a better chance that we are better off in 10 or 15 years. Because right now, I don’t think we’re on a path to being better off. That’s the reason why I think just codifying the status quo, in cleaner language, is a missed opportunity.

Fregonese said it yesterday: There were about 2,800 single-family home demolitions between 2012, and right around now. And 2,100 or more were a single-family home being torn down and replaced by a larger single-family home. That is a pathway toward a city – be it in five years, or 10 years, or 15 years, that is the trend, that is what is occurring – where low-income residents are being pushed out of their apartments by rising rents because the population is growing here by in-migration and reproduction and all the things that have caused population growth here for over a century.

For me, I want to focus the conversation on what can make things better, on that front? What can create opportunities for us to be more economically integrated? That means not just a supply of more market-rate housing, but also a greater supply of income-restricted housing, greater funding streams, hopefully, in things like TIFs for more publicly subsidized housing, and more public housing. I think we need more of all of those things, and to think about economic equity as we do that. Because even if there is housing capacity, in some of our higher opportunity neighborhoods, what I’m interested in – and I expressed this yesterday during the presentation – is not just what the housing capacity is, but what will actually happen, what will actually get built.

I agree that regulation is important for combating market forces in order to produce better outcomes, even if we can’t control the outcome. I agree that we have to have a higher minimum wage than we have; I agree that there should be regulation in some places where there’s too much parking and it’s bad for us, and there should be regulations where there’s too little parking in places where it’s bad for us. That means that it’s necessary for us to have some sense of what market forces are doing, and to be aware of them as we can possibly be, so that our policy decisions get us to the best outcome that we can get us to. So I don’t think that the code should be market-driven – maybe some of the city staff and consultants think that, but many of them I’ve spoken with don’t believe that it should be market-driven, but that they should be paying attention to what the market is doing as they craft their recommendations. For them not to do that, I think, would be negligent.

Currently, the market seems to be creating more expensive housing by remodel, more by reconstruction, and not distributing population growth very equitably. If you look at our maps, for example, population growth currently is largely outside the city. … There’s not a lot of clarity on how well we’re doing changing those things in this process, and that’s sort of been my consistent drumbeat, and that of other council members.

We’ve asked for a housing analysis on each draft of the code – we get them, but by then they’ve already come up with another draft. We want to see what will change. For me, I think we have to change from the current path, on to something better. Not just on affordability and integration – but I think that’s really critical – but also continuing to think about our environment, continuing to think about how we get a better bus system and hopefully a rail system – and those things are really tied into the land development code. Passing a land development code doesn’t build bus stops, but it helps.

Unintended Consequences

KT: I want to jump into one part that was now a long part ago. You talked about opportunities outside the land development code, and I think that’s where actually we’re going to have more success in creating housing that is actually affordable for people. I don’t believe, as I said, that up-zoning lots of properties is actually going to create affordable housing. The ADU [accessory dwelling unit or “granny flat”] discussion may be instructive here. It’s still early, and so the data is not out, but three different people, including one staff member, have indicated over the last week one of the things that we need to watch with ADUs. One of the things our Council did was intended to help property owners stay in their houses; that was an income stream that was going to help them. There were also discussions on Council that that was going to produce affordable housing – I think we even had a couple of nonprofits come and say this was going to produce affordable housing.

We had an opportunity to place some kind of income restrictions on it, and did not; we also had an opportunity to do something to encourage the preservation of that existing house. (I’m not sure that really came up in our conversations, but it should have.) But anecdotally, what I’ve heard from several people over the last couple of weeks – most recently, last night on one of the neighborhood listservs – what you see happening now is not just people adding an ADU in the back of their property; you see people scraping the existing structure and building two structures, and because we increased the size [allowed], that’s a more economically feasible opportunity now, and they’re condo-ing each of the structures. So where we thought we were helping existing property owners stay in their neighborhoods, and create some funding stream for them, and add density in a way that is appropriate in some of those existing neighborhoods, what we have actually potentially is add a tool that – it’s not to say that we shouldn’t have moved in that direction, just that we need to proceed very carefully and have a really good analysis before we adopt big changes in our code.

GC: I would just say that we still have on the books the opportunity for income-restricting an ADU. It was never utilized, except by nonprofits who were already naturally doing some of that. I think in this code rewrite we have a real opportunity to set that up in a way that works. I think we should have missing-middle housing types, because experience here and across the country shows that attached housing is cheaper than detached housing, when you compare apples to apples. Brand-new attached housing isn’t going to be cheaper than some really old housing in a lower-cost part of town, but the fact of the matter is attached housing in an apples-to-apples comparison is cheaper, and we need to figure how to get that on the ground, appropriately, if we’re thinking about how to give ourselves a chance, in the future.

But the market is not going to produce 50% MFI [median family income] or 60% MFI units in high-opportunity areas. It’s just not going to do that. I don’t believe that some guy in a bank in Sweden wants that to happen. But one thing I think that is a positive so far from this code, is that there are people talking about how it is that we can income-restrict one of those [ADU] units, and potentially have an opportunity for existing homeowners, who are moderate income, to be able to have a permanent unit on that lot, and a place to live, and then, if they move or sell it, maintain some level of income-restricted affordability, as opposed to that unit being scraped and replaced by one unit, or being scraped and being replaced by two, and neither of them being income-restricted.

So that was an idea that was kicked off in the first draft, that I think was a good one, but my frustration with it was that it seemed very restrictive in the mapping.

Missed Opportunities

KT: I think I even had an amendment that didn’t go anywhere, planning to income-restrict them.

I would say the other missed opportunity there, in a last-minute compromise, ADUs were only applied to SF3 [single-family 3] tracts – so you have whole Council districts that have none. That is something else we need to watch going forward. But my point about mentioning the ADU is that I think it’s instructive, as we think of changing whatever T3 and T4 [“Transect” zones] become, because the same thing could be writ large in a lot of areas. For example, somebody had on the Hyde Park listserv last night, the two units are now selling together for $1.2 million. That has quite likely replaced much more affordable housing, and we’re seeing that as a mechanism for displacement.

Let me mention some of the other opportunities that have sort of come and gone through our Council. We have very few tools – very few tools – here in Texas, to promote affordable housing. When we do something like Plaza Saltillo, where there was an absolute commitment, quite documented, for 25% affordable housing, and then we have a shift in that [to 15% at time for Council approval] – we need to push back as a Council. We need to push back. Then we were told that requiring 12 of those units to be family-friendly was going to kill the deal.

A couple of weeks ago, we had the Habitat for Humanity discussion, and there was pushback about a line in there that a majority of those units be family-friendly. We have to use the opportunities we have; we just have to do better about that. Certainly I think we agree on the affordable housing bonds; I think we need to use that as an opportunity to create affordable housing. And we need to mandate onsite affordability. That’s not something our current code does, and that’s not something that’s proposed in the draft before us.

Some of the comments I submitted to the staff as part of the affordable housing and density bonus, two main things: one is, we absolutely should require onsite affordability, and if you can’t create that affordable housing there on that site, then there ought to be an exception process that you have to come to Council for a decision. It ought to be a public conversation, about why that’s not possible, or feasible for that project. Because that is the way we’re going to get housing, in different parts of town, that is income-restricted. The other is using city-owned lands, which I’ve been a leader on.

AC: Is there enough of that land to make a difference?

KT: I think we have some really good possibilities, on vacant land. We need both the financing, and the political will to get started on it. The other challenge with the affordable housing/density bonus program, that is put through the first draft, is really the question of entitlements. I don’t believe we should have a code before us that is increasing entitlements without having some kind of community benefits attached. If you have the ability right now, to do two units on your site, and we want to have some kind of process – and I’m not sure the land development code is the right way to do it – but if we’re going to have a process that would allow that property owner to do three [units], there ought to be some kind of community benefit attached to that. Maybe that third unit should be affordable, at some level. Maybe not at 50% MFI, but maybe at 80%. I don’t agree with widespread increases in entitlements, by right – I think they should all be attached to a density bonus.

AC: Yet the new code seems like it’s on the way to increasing entitlements widely, because we think there should be more density – that that in itself is a benefit. As it is now, you have to pay into an affordable housing fund, or give some other benefit, in order to get those. Is that change a problem?

GC: I think we need to make the best deal for affordable housing that we can make. I and other people on the dais, and so many people I talk to, say it’s hard to know what level of MFI and how many units to do on any given tract – we aren’t trained real-estate economists and that’s not our job. It’s not what we were elected to do, and it’s not what we campaigned on. We need to get the most income-restricted units to the people who need them the most, and in the best parts of town that we can get them in. That’s what we supposedly pay all these consultants all this money to help us do.

So I think we should be achieving affordable units where we can, and especially I’m interested in the 60% [MFIs] and below units. I want to achieve economic integration, and maybe that means putting them in the same building, maybe that means having a building that’s on some public lands getting financed and funded so that we can have 50-50 buildings. I want buildings where low-income folks, who are lower-powered economically also, will have the opportunity and ability to live. One of the challenges of affordable housing is, you might have someone who is lower-income, but who might not have low levels of economic power – like someone who may be on the way up, who doesn’t need the unit as badly. And I want to make sure that the units that we are getting are friendly to folks who need the units the most as well. I want to my best, to have an educated guess that we can get to the best outcome we can get to.

So I don’t know, on my own, just on a piece of paper – this street, on this floor, is worth 70% MFI, and the second or third one is worth 60%. But that’s what we have paid for our consultants to help us do – to figure out, okay, when will people build, and what regulations can we put in place for us to get both the market-rate housing supply and the income-restricted housing supply, that we need both of. Getting both helps, in my view, not just the fiscal health of the city, not just the environmental health of the city, but the low- and moderate-income people who get screwed the hardest in the housing crisis.

KT: So it’s not clear to me whether you’re agreeing with me about the on-site affordability, or disagreeing with me. I think if we want to create affordable units in different parts of town, at some point we have to stop letting people pay into a fee-in-lieu [that is, an affordable housing fund instead of creating on-site affordable units]. It’s never enough money to create the housing, and it’s not going to create it – almost never – in that same neighborhood, and allow those families to access the resources of those high-opportunity areas. I have seen this conversation so many times, from a decade ago when the Downtown plan started, there is always a pushback against requiring, or at least setting an expectation, that there will be on-site [affordable] housing. It happened in the planned unit development ordinance, it happened in the Downtown density bonus ordinance. There’s always going to be a pushback – “We need more calibration,” “It’s going to kill the project,” or “People will opt not to do those extra three floors” – it’s just the same argument rehashed over and over and over again. At some point we just have to say, we’re serious about this.

Frankly, it came up when we were talking about HealthSouth [a former healthcare building on city land Downtown, currently proposed for conversion to housing] – a slight version of it: “We could sell it, and maybe create good [affordable] housing somewhere else.” At some point we just have to say, for example, “We’re going to require those 25% of affordable units at Plaza Saltillo.”

GC: I want to get the units.

KT: On-site?

GC: I want to get the units on-site, if those are the best units. You’re saying, if we get so little fee-in-lieu that it’s not worth it, then we shouldn’t do it. I agree.

KT: No, no. I’m not saying let’s forgo the fee – a fee is better than [nothing], if that’s all we can get the votes for. But the fee is never commensurate to the cost of actually building those units. Even at 10%, the fee-in-lieu is never going to be enough to build 10% of those units [elsewhere].

GC: And the question on the money is, can we leverage – can we use that money to leverage more money to be able to produce the units. For me, I like the idea of having units in the skyscraper, if the options are having units in the skyscraper vs. a small pittance of money. But I think that a lot of families would prefer to live in some missing-middle housing or an apartment complex near their school, than in the skyscraper. The challenge you’ve described is, would we rather take units in the skyscraper or a pittance of money? That answer is clear. But if the only option is, should we take a pittance of money – I agree, we shouldn’t take a pittance of money. But if, in the end, we can get affordable units that folks really want to live in, especially families that need the most help – then there’s a real decision-point to be made there, and that’s not the place where we’re having the conversation right now.

KT: And if we’re talking about the skyscraper, then yeah, I would probably support putting that money nearby. But that’s never the conversation we’re having. That’s a good reason to have an exception process, right?

GC: In the end, the goal should be to pass something where we have a reasonable expectation – not because we agree with market forces – but a reasonable expectation that we are pushing on market forces that wouldn’t otherwise do this, to produce both the market-rate housing units that we need, and as many income-restricted units at lower levels of MFI as we can get. And that likely isn’t just the land development code, but having to pass a land development code with the right density bonus programs, with the right set-asides of money to buy down units, and do all of that work, and have public land that is actually available. Just the density bonus program, in and of itself – we’re talking right now of significantly increasing the number of density bonus program units that we could get, through CodeNEXT, and it’s still a drop in the bucket of the number of units that we need.

So it’s clear that we need a land development code that enables us to get more economically dispersed affordable units, and more of them, but this [CodeNEXT] isn’t going to be the thing that does it, in and of itself. And, I think that one of our rare opportunities in high-opportunity neighborhoods is, instead of a single-family unit being torn down and replaced by one shiny, big new unit or two shiny, big new units, is to figure out how we do a missing-middle housing type with an income-restricted unit there, where we can reasonably expect that that will indeed happen. We had on the books for a really long time, and income-restricted ADU ordinance in our land development code, that folks just didn’t use. We should find one that really works, because I want those income-restricted units to appear – which I think is a reasonable thing to do.

“Intoxication about the Numbers”

KT: I think we have a couple of striking examples in Austin that we need to be mindful of. One is, the East Riverside corridor. We went through and rezoned that whole area, there were some significant entitlements built into that rezoning – lessening of compatibilities and I think some increased height – and a density bonus program on top of that. A lot of the new development that is coming online, if it is accessing the density bonus program – a lot of it is happening without accessing the density bonus program – but even when they are, we have displaced thousands of Austin families from that area of town. And even when you have developers who are accessing the density bonus program, you’ve got families at 80% MFI, where once you had families that were making 60%, sometimes 30% MFI.

So this notion of creating eight units on what was once a single-family tract is going to be the answer to affordability, or is going to create affordable housing, is problematic. Number one, that housing is not going to be cheaper – and at what cost? I look at this, and there’s a sense of intoxication about the numbers: How many units are we going to create. I would say to you, if you look at the other capacity studies – if all you’re interested in is units, you can look and see, we already have the ability to have that number of units. Let’s look at how and why it can happen organically. Or are there tweaks we can make to the ADU ordinance, or some of the other things that allow for that density to happen in coexistence with the structures, and the people, and the families who are already living in those communities? So we don’t have the East Riverside planning exercise writ large, and so many thousands of families are displaced.

Existing Affordable Housing

AC: Did the city have available to it sufficient tools to prevent that process? Are we asking the code or even the Council to do things it just doesn’t have the power to do?

KT: We are up against market forces that are just difficult to shift the gear on. But there are certain things that we do, maybe for all the right reasons, that can exacerbate the situation, and that may be one where we did – where the increase in entitlements furthered the rate of development, absolutely. I think that’s instructive for this [CodeNEXT] process. The alternative could have been to really step up our ability to help out the property owners who have aging multifamily structures that might have been in need of renovation.

That’s something, as a Council, we’ve passed quite a few resolutions – at this point, I have a few myself – asking, how can we really address the question of the aging multifamily stock. We have something like 60,000 affordable units in this city that are not subsidized. If you look at where the opportunity is for affordable housing, that is where the opportunity is. We have talked for a long time about a “strike fund”; the mayor is working on one from private sources. There is no reason we can’t step up our efforts as a city to really get proactive in doing that. A portion of new bond funds, when we go out for bonds, should be allocated to the purchase of, or for the support of property owners who want to hang on to their housing but need to be upgraded. We certainly don’t want people living in substandard housing, but we need to be creative in the way we reach out to those property owners and allow them to upgrade their property, because often it’s when their property is degraded that they’re more likely to sell and have it redeveloped.

And when it redevelops – and I think about this, as I think about the “T4” [Draft 1 Code category] and whatever that will become – the intoxication about numbers doesn’t really allow us to think about what kinds of units we’re encouraging to be built. This is an opportunity to really look at that challenge of families with children moving out of Downtown, and ask: What are some tools can we adopt in our code that will increase the likelihood that when developers are coming before Council about a multifamily project, you’re more likely to see two and three bedrooms instead of efficiencies and one-bedroom [units].

In the South Lamar planning area, as that area has redeveloped, you’ve got an increasing number of units. They’ve increased the number of units, but decreased the population. What were multi-bedroom units are being replaced by efficiencies and one-bedroom condos. So you’ve not just replaced lower-income residents with higher-income residents, you’ve replaced units that could accommodate families, with units that mostly can’t – or are more challenging, less appealing to families.

GC: So many of the families that are living in District 4, and also northeast, District 1 – that’s where you have schools being built and they’re already planning to build new ones – figuring out how we can discourage replacing old multifamily with newer, more expensive multifamily is critical. Even if we can’t mandate that in the land development code, we should set up as many disincentives to doing that as we can. The wholesale demolition of them is not good, and also just the up-filtering of rents and the displacement of those families also needs to be slowed. Creating opportunities for folks – some of these apartments are located in places where, if there are not lots of options for people to live even closer to the Downtown core, eventually speculators will realize this is the next best place to locate higher-income earners.

So in this land development code, we need to focus on how is it that we can make sure that population is not being pushed, over the next 10 or 15 years, into some our existing low-income neighborhoods, and to buy us the time to be really aggressive, which I think we are doing, everything we can to get really aggressive at buying some of those properties; we’re getting renovation funds for some of those properties, to lock in their affordability. But the path that we’re on, as far as I can tell, because it’s already happened in so many of the lower portions of the my District, it’s starting to happen even north of 183, is for those apartment complexes to gentrify. That’s the path we’re on now, and I want to change that path, the best that we can – knowing that I can’t just ask five people [on Council] to raise their hands and vote on something that says, All landlords must reinvest in these properties and keep the rents as low as they can.

If we could take that vote, we definitely would have done that [laughing] – but what are the votes that we can take that would most facilitate that? Some portion of that is creating housing opportunities inside of the [city] core that are not on top of existing lower-income [housing].

KT: I think we both share an interest in helping people stay within their neighborhoods, whether they’re people in your district or people in mine. The divergence here may be that you seem to be suggesting that up-zoning central neighborhoods helps stave off the pressures on your neighborhoods. I see that those rising property values of those central neighborhoods are going to drive central and Central East Austinites further out. It will create, as I said, those rings of displacement. I think a strategy of displacement, whatever neighborhoods we’re talking about, is not one we should take as a city. I think that’s the kind of a [draft] code that we have in front of us right now.

GC: We should make it less economically attractive to tear down old multifamily [housing]. I agree with that. I’ve said that, as have other folks who agree with me on some of these issues. But there are lots of little houses that used to be $50,000, and then they were $150,000, and then they were $450,000, and now they’re $700,000. That’s the current trend, the current path that we’re on, so I’m working on trying to find ways that we can make that issue better. How can we address the fact that whether it’s torn down, or just remodeled, or added on to, those buildings are getting more expensive. The same thing can happen to our multifamily housing stock. I don’t want to incentivize it being torn down, but I also don’t want to incentivize the rents going up because that is the next closest apartment building that hasn’t gentrified yet.

So I don’t know that I would counter that, except to say that I agree that we should not over-entitle low-income housing, or moderate-income housing.

KT: I don’t know why we would over-entitle any kind of housing – I think that holds true for single-family housing as well as multifamily housing. It holds true for all of it; I don’t think we should be over-entitling any of it, knowing that the result is, it’s going to drive up those prices.

The Right Level of Entitlements

AC: The question is, what level of entitlements is right?

GC: But I think the question is – we could take the example of a house being scraped and all of a sudden you have four units. My preference would be for us to figure out how we can get an income-restricted unit along with the market-rate units. I think we need both, a higher supply of income-restricted and non-income restricted. The challenge is, if we stay on the current path in which, of the 2,800 single-family demolitions, 2,100 of them is just a bigger single-family house, how is that addressing the problem, in and of itself. What are we doing now? How is our current land development code helping with that? I see it hurting that – I see the current land development code enabling that current single-family home, if it’s torn down, in almost every instance it’s being replaced by a more expensive, bigger single-family house that’s inhabited by fewer people, creating fewer opportunities for people to live in that neighborhood than could otherwise happen, and having people continue to bid up the price of that house, and whoever loses that – the second-richest person can go bid up the price of another one. That’s not a great system.

I’m new to this, everybody knows that. I am just trying to, with the opportunity and responsibility to me and to us, saying, how can we change the current trend, toward something better? … Having as honest a conversation that we can have, that the changes that we make are not going to fix everything, are not going to be pros and wins for everyone. But paralysis, and sticking with what we’ve got right now, seems like a pretty bad option. Can we make things worse? Yeah. Can we make things better? That’s what we were elected to try to do.

So having an earnest conversation about this, is critical. Not ever saying, we’re going to solve affordability by having missing-middle housing in West Austin (whatever somebody says at the podium [before Council]). But if we can create opportunities to make things better than we’re at right now, is what we’re looking to do – understanding that, that single-family being torn down and being replaced by a more expensive one, or that single-family house remaining exactly as it is, while its price continues to go up – that is the status quo, and what we are doing is trying to influence that status quo.

If that single-family house is entitled to have an ADU, it might be replaced by a house with an ADU, and if it’s in Bouldin, we’re probably not going to expect that either one is going to be cheap. But thinking about that this is a 10, 15, 20-year exercise – looking out 10, 15, 20 years from now, what kind of city do we think we’re going to have, while at the same time being very conscious of the effects it’s going to have between here and there.

AC: Do either of you think the code rewrite is moving in the right direction?

KT: I don’t have the solution to what the consultants have identified, of the smaller single-family house being replaced by a larger single-family house. I don’t have the solution for how we turn that situation around. But I also don’t believe in going in and exacerbating that issue by suddenly giving that property the opportunity to do eight units. We could adopt caps on size – that would be one thing. Instead just saying, let’s have a maximum size in certain areas. All of the areas I represent have the opportunity to do an ADU already, and my district has the highest number of renters – it’s 72%, or something like that.

What’s interesting to me about this conversation is that there seems to be a lot of interest in increasing the density in Central Austin and Central East Austin, when they already have the highest density of every district, Greg, with the exception of yours. And if you look at individual neighborhoods, there are high degrees of missing-middle housing. It’s never clear to me: We use that term without defining it – are we talking about the form of the housing, or are we talking about the people. But we have both in Central Austin. We have multifamily, coexisting with single-family, coexisting with single-family that’s been converted into multi-units. When you have that mix already occurring in neighborhoods, why go in and change the zoning in such a way that it’s going to potentially increase displacement?

Why not look at some of the areas that don’t currently have the opportunity to do an ADU, and look to making changes there? If we pick up most of the units in Downtown, and along the corridors – if you look at the success of the VMU [Vertical Mixed-Use development] program, that actually has created a fair number of units, including on-site affordable ones. When we’re talking about increasing the net of our units by something like 3,000, and you’re deep in the interior of the neighborhood trying to seek those units – it doesn’t seem to me the best strategy, both in terms of the number of units that you’re trying to create, as well as the loss of social cohesion and existing residents.

The way that was envisioned – corridors, activity centers, try to create areas where at least people would have jobs closer so that hopefully not everybody is coming Downtown. That Growth Concept Map was done, I think, pretty intentionally. Also, asking neighborhoods to take a look at their neighborhood plan, and see – most of them did, when going through their neighborhood planning process, identify areas where they wanted to see increased density, and a lot of those Future Land Use Maps reflect that. It’s worth having the conversation.

Going Forward

AC: We’re having this rational conversation, and Council will continue to do that. But on the political side, what we hear from people, on the one hand, is that land use codes are structurally and historically used as a tool of of racial and economic segregation, and we need to change them dramatically, or we’re just ratifying that segregation. On the other hand, what we also hear, is that this entire CodeNEXT project is just a RECA-driven plot to bulldoze Central City neighborhoods. How do we get from these narrow details of specific zoning to the very larger conversation, of what kind of city do we want to live in?

GC: I think it’s really helpful – and I hope I’m not a person who’s intoxicated by the numbers – …

KT: I don’t know but, there’s a lot of it going around.

GC: It’s helpful to look at materials like those that they gave us yesterday – for us [on Council] to model the kind of debate that we want to have. I certainly haven’t been perfect on the dais over the two-and-a-half years I’ve been there; I keep on learning how to do it better. On this issue, that can get so heated, I really want to be able to model about the fact that this is the kind of conversation that is going to be not only really critical for the city, but it’s a long-term project, and it can bring some incremental change, depending what sort of decisions we make.

It’s helpful for us to be able to look at, okay, if we can make some of these changes citywide, what are the citywide impacts on community needs. To be able to look at: So under existing zoning, this is how many people we can expect to be able to live near transit, and if we have different versions of the code, these are the kinds of changes that we think we can make. Is that a worthwhile tradeoff for some of these changes in parking regulations, or some of these changes in setbacks, or the number of units? Does the rent distribution of units that we can anticipate over a 10-year period, is that enough?

But it’s been hard, sometimes, to model that conversation and get out of just the debate on an individual issue, until we can get this better picture, which I think is starting to come. (They [consultants] had a really long list of “left to do.”) I think that we can have that conversation, and get people out of their camps a little bit more, and model a conversation around, what kind of vision we have for the city. Of course we need to have to go into the localized context as well: Did you do this one right or wrong in this neighborhood? We need to do that, too. But having a whole land development code rewrite, and having the opportunity to shift some of the direction of the city is a critical opportunity to make this not like another zoning case, and instead, talk about higher level, rational, policy-making decisions – and still have time after that to spend time on individual impacts.

No matter what, there will be some folks who stay staked out wherever they are, by the way. (People who have been council members told me I should get that tattooed somewhere.) But I think there is a middle place, where there are enough folks that can grasp and understand that these are some of the Council’s goals. The injustices of the past can’t be solved through the land development code rewrite, and frankly, I would rather have developers lose their shirts if they can’t provide lower rents and can’t find people to fill up their units so easily.

That’s clear and true when you chat with folks on the dais: that we’re trying to do our best, and that change is difficult, but as far as I can tell, change is necessary from what the path is currently. My hope is that from conversations like this – not being intoxicated by the numbers, to 123,000 [units] or 160,000, but instead saying, if our plans are laid out in things like Imagine Austin, for us to have a diversity of housing types, and income-restricted units in more places, and enough housing that we aren’t hurting the people who have the least economic power in the system, and we want to be able to have a better bus system – that we can have a conversation there first, and understand how the different dials that we change up in the land development code help or hurt those situations.

Affordability doesn’t win above all things. It’s critical, but we also have to protect the environment, and we have to have air that we can breathe, and Barton Springs is obviously critical in this community, and we have to think about our infrastructure. … There’s all this other stuff there too. If affordability ranked above all, maybe we’d have a very different set of regulations. So we have to be working on affordability and integration, but we have to be thinking about these other things, too.

KT: I see the different narrative streams a little differently, but certainly it’s absolutely true that zoning and land use has absolutely been a tool of racial segregation in this city. When we’re talking about land use changes, that is absolutely something we need to confront. Do I believe that the land use code is going to reverse or mitigate that history? I think we’re limited in terms of what the land use code can do. We have to do everything we can to promote integration – economic integration, racial integration – absolutely.

GC: See, we agree.

KT: And there’s probably unanimity [on the dais] that displacement is a bad thing. I think we have different notions of what may or may not cause that, and that’s where we need to focus our efforts. I would also say that we’re in unique position as a Council, because we’ve never approved a neighborhood plan together. To be rewriting the land development code without that experience, is just an unusual kind of thing. We owe it to one another and we owe it to the city to really make sure we’re as well-informed about the different areas across the city as we need to be to make these decisions. With the change to a district-based system, we’re all more familiar with our own areas than with others. There’s been the suggestion that in my area, for example, standard lot sizes are different than in other areas – a standard lot size is a standard lot size.

We really have to have more discussions about what really is the best path moving forward for the city as a whole, but also with the real intent of keeping people in their neighborhoods, and keeping those neighborhoods as intact as possible. But because of that history of racial segregation, and the city turning its back on certain parts of our community – including and especially East Austin – has kept the city from intervening in acts of major gentrification and displacement in our African-American community. We need to learn from that experience and make sure that we’re committed to better decisions.

Prospects for Approval

AC: Is CodeNEXT going to pass through Council on a unanimous vote – that you can find a plan that everyone is going to agree on?

GC: I don’t know. We don’t have as many unanimous votes as previous Councils.

KT: I think there’s a path to a unanimous vote to adopt this code, but it’s going to have to be a different product than what’s in front of us. It can still be a good plan, but it will take some work, and take some different directions. At this point, absolutely not.

GC: No, not now.

KT: More important than a unanimous vote – the community, I haven’t been to a meeting where there haven’t been extremely upset, very unhappy people. Hundreds of them, who feel really stressed out, but also misled by the process and some of the commitments that were made. It’s important to me that we end up with a good product, but it’s also important that it not become an extraordinarily divisive moment in Austin’s history. We have an opportunity, but we’re really going to have to shift gears.

GC: On this issue, in my district there are many people who are stressed out about how their kids are ever going to be able to afford a place to live here, how they’re going to be able to afford to live here. We face such huge challenges on these issues. We’re going to have very stressed-out people if we don’t do something, if we do something one way, if we do something another way. I’m willing to accept that, but I just want to make sure that we pass the best thing that we can. That means listening really closely to my colleagues. It’s helpful for us to have some sense of deadlines, just so that we keep on it; but I think we need to listen closely to one another and elevate the conversation as much as we can.

AC: So no predictions about timing?

GC: I’ve stopped making predictions.