Council Recap: Taking It (For) the Streets

New impact fee plan makes its first trip to the dais

City Council took care of its business in relatively short order Thu., Nov. 12, as it gave preliminary approval to a new universal Street Impact Fee program, selected a investigative firm to conduct an audit at the Austin Police Department, and delayed a vote on the relocation of the Downtown Austin Community Court.

Photo by John Anderson

In a discussion that took up the largest portion of the meeting, Council approved on first reading the impact fee plan, which has been in the works for several years, that would ask developers to help pay for new road infrastructure within six miles of the site of their projects. The fee will be calculated based on development density (number of dwelling units or square footage) and will vary between 17 service sectors mapped throughout the city; state law dictates how the fees are assessed and how the revenue can be used (specifically on roadway construction and maintenance).

The fees are calibrated to encourage denser housing types that more efficiently utilize land and existing infrastructure. For example, a single-family home built in Sector J (Old East Austin) would require a $2,440 fee, but a “medium-scale multifamily” building constructed in the same area would only pay a $1,088 fee. Developers will also be able to reduce the fee by taking steps to meet mobility and housing goals established by Council – such as building near transit, reducing the amount of parking at their development, or including income-restricted housing.

Still, the program has drawn the contrasting reactions usually seen on Council when it debates housing. The fees would help the city pay for infrastructure as its population continues to grow even during economic downturns, but development fees in Austin (which have increased in recent years) are already seen by many builders as a barrier to creating housing the city needs.

As Council Member Ann Kitchen put it, when developers don’t pay to improve the roadways they rely on to serve their new buildings, it’s the city’s taxbase (usually in the form of infrastructure bonds) that must foot the bill. “We have to remember that there are costs related to street impacts,” Kitchen said. “If a housing developer is not paying those fees or costs, then the community has to pick those up in some way to address impact on street infrastructure.”

But some of Kitchen’s colleagues fear that imposing another fee may further constrict the supply of new housing in the Austin real estate market – especially of the smaller-scale “missing middle” housing that is in short supply. That impacts not just the housing supply now but the city’s revenues over time: “If a fee upfront inhibits development,” CM Jimmy Flannigan said, “it also inhibits the long term perpetual tax we might collect from that development.”

Concerned about the increase in fees, CM Natasha Harper-Madison asked that staff determine if any other development fees could be reduced or eliminated to offset the new street impact fee. If approved on final readings in December, the program would go into effect in late 2021 or early 2022, after a one-year grace period.

Council also approved awarding a contract not to exceed $1.3 million to Kroll Associates Inc., a consulting firm based in New York City, to conduct an audit into the recruitment, training, and promotion of personnel at APD. Approval of the contract comes nearly one year after Council approved a resolution calling for the audit. It is unclear when the audit will begin or is expected to complete, or how exactly Kroll will interact with other ongoing audits – such as the citizen review of video materials used within the police academy.

Finally, Council agreed to postpone a vote on leasing an East Austin site at 1719 E. Second Street as the new home for the DACC. CM Pio Renteria, whose District 3 includes the site, said his constituents had not been sufficiently engaged on the subject and would fight the move if approved on Thursday. “It doesn’t have the community support right now,” Renteria said. “We’re going to have to go through another year of fighting if we do this without any input from the neighborhood.”

Interim Real Estate Officer Alex Gale said postponing the vote to Dec. 3 would likely not adversely impact negotiations with the property owner, so Council voted unanimously (with Mayor Steve Adler gone for the day) to delay the decision. Having outgrown its original space on East Sixth Street years ago, the DACC, a key component of the city’s response to homelessness, has been operating temporarily out of the Terrazas Branch Library on E. Cesar Chavez, which is shuttered during the pandemic.

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City Council, Street Impact Fee, Austin Police Department, Downtown Austin Community Court, Kroll Associates Inc., Ann Kitchen, Jimmy Flanigan, Pio Renteria, Natasha Harper-Madison, Alex Gale, Austin Police Department audit

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