Council Members Look to Tax Previously Exempted Waterfront Homes

Correcting the "Mistake on the Lake" could fund city initiatives

Waterfront properties (red) along the 23-mile stretch of the Colorado west of the Austin city limits – now Lake Austin – were annexed by the city in the 1890s but have not paid property taxes since. (Source: City of Austin)

The city of Austin could have millions more dollars to fund its efforts to end homelessness – after discovering wealthy homeowners of waterfront property on Lake Austin have avoided paying city taxes for more than a century.

As reported in the Statesman last week, more than 400 properties on the banks of the Colorado were exempted from taxes when the shoreline was annexed in the late 1800s (long before the dams that form today's Lake Austin and Lady Bird Lake were built) to protect the city's drinking water supply. Those parcels were, over time, developed and provided with city services, but the tax exemption was codified in 1986 by an ill-conceived, and apparently misunderstood, city ordinance.

Council Member Greg Casar and several other CMs seek to repeal that 1986 ordinance and add the homes back to Austin's tax rolls; Item 89 on the June 20 agenda would also direct City Manager Spencer Cronk to find ways to earmark the new revenue – estimated to be around $3 million at the current tax rate – for initiatives aimed at ending homelessness in the city and improving child care services.

Casar told the Chronicle on Monday that his ordinance is intended to correct what he and his co-sponsors are calling the "mistake on the lake." The riverfront "has been a tax haven since the 1890s," he said. Lakeshore residents "vote in city elections, and all we are saying now is [these] 401 properties, which have been acknowledged for decades as the kind that the city taxes everywhere else, are going to be taxed as well."

Although Council was alerted to the loophole earlier this year, staff advised waiting to repeal it, pending current litigation (which led to the discovery of the longstanding exemption). City staff expect the homes to be added to the tax rolls by fiscal 2021 at the latest, but possibly in time for the setting of the fiscal 2020 tax rate in September.

Proposed changes in the panhandling and “no sit, no lie” ordinances “run counter to our efforts to build a safer community for UT students.” – UT Police Chief David Carter

In related news, Council on June 6 held a lengthy discussion on Casar's effort to decriminalize unavoidable behaviors tied to homelessness: asking people for money, sitting on a sidewalk, or sleeping outside or in one's car. Currently, police officers can issue citations if those actions are observed, regardless of how obstructive or endangering they may or may not be. Stakeholders including the Downtown Austin Alliance, the Greater Austin Crime Commission, and the Austin Chamber of Commerce have framed Casar's proposal as a threat to public safety and health, as has University of Texas Police Chief David Carter, who wrote to Council that the changes "run counter to our efforts to build a safer community for UT students."

From the dais, Mayor Steve Adler offered amendments, agreed to by Casar, to the proposed new rules, redefining "solicitation" as "aggressive confrontation," so officers still would have means to address threatening or endangering behavior. Like­wise, the proposed new "no sit/no lie" and camping rules would cover someone camping "recklessly"in a public space, or rendering public property "impassable" in a way that makes use of the space "hazardous."

In accepting Adler's amendments, Casar agreed there would be "potential value" in clarifying that Council would not decriminalize threatening or harassing behavior. Austin Police Chief Brian Manley confirmed the proposals would not strip officers of that authority, but said the community would need to provide clarity on how his officers should respond to various situations they could encounter. What should the police do if someone is camping outside a business, but not causing a disturbance or posing an obstruction? How important is a person's subjective discomfort or fear when encountering people on the street? Adler asked the community to come back with its thoughts on that matter on June 20.

Representatives from the Ending Com­mun­ity Homelessness Coalition (ECHO) said current "no sit/no lie" and panhandling ordinances must be modified, because when the homeless are cited, they often fail to appear in court, which leads to a warrant issued for their arrest, which ECHO Executive Director Ann Howard said landlords can "viciously" use to justify denying a lease. Going farther, Emily Gerrick, an attorney with the Texas Fair Defense Project, said current ordinances were an "unconstitutional, ineffective, and inhumane" barrier to helping people transition out of homelessness. Gerrick and allies in the Homes Not Handcuffs coalition include those with lived experience; Steven James Potter said he's been homeless for years, and that Casar's proposal would offer "sanctuary and a little bit of hope." Potter also noted that increasingly, those he encounters are not always suffering from mental health issues, but are rather the victims of "a simple economic issue" – the rising cost of housing in Austin.

As the city commits to ending homelessness, the numbers of those who need immediate temporary shelter are growing. CM Ann Kitchen brought a resolution, approved unanimously, directing city staff to purchase property for a 50- to 100-bed shelter, with an estimated annual operations cost of $2.5 million. Council also approved $1 million to close a funding gap at the Salvation Army's new Rathgeber Center and enable that 212-bed shelter for families and children to open at full capacity.

More contentious was the late-night discussion of the iconic Butler Pitch and Putt, run by the Kinser family for 70 years; Lee Kinser's bid to renew that contract was disqualified due to an omitted signature. Supporters rallied at City Hall to urge Council to restart the bidding process, expressing fears that new operators would change the course's "character." Anna Morales with Pecan Grove Golf Partners, the group recommended by staff and the Parks and Recreation Board, said she had no intention of changing the course beyond maintenance and improvement. "Butler is in a state of disrepair," Morales told Council. "It needs love and attention." Kitchen, whose District 5 includes the course, and CM Jimmy Flannigan clashed over the issue, which was ultimately postponed to June 20 – or perhaps June 19, when Council will hold an additional special called meeting to dispense with non-controversial items as it prepares for its summer break.

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Austin City Council, Lake Austin, Austin-American Statesman, Greg Casar, ending homelessness, Downtown Austin Alliance, Greater Austin Crime Commission, Austin Chamber of Commerce, David Carter, Steve Adler, Brian Manley, Ending Community Homelessness Coalition, Ann Howard, Emily Gerrick, Texas Fair Defense Project, Homes Not Handcuffs, Steven James Potter, Ann Kitchen, Salvation Army, Rathgeber Center

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