On COVID-19 Relief and Housing, Council Does What It Can

Waiting for the approved $15 million


Members of the live music industry gathered rallied outside City Hall in support of the SAVES resolution (Photo by David Brendan Hall)

City Council wants the $15 million in relief funding it approved two weeks ago to help businesses survive through the pandemic, resulting recession, and beyond. Following approval of the Save Austin's Vital Economic Sectors resolution, staff created guidelines for the three programs within the SAVES fund to help with short-term relief. But Mayor Steve Adler, with support from the rest of Council, directed staff to expend the money in ways that are geared toward supporting long-term sustainability for businesses.

Instead of just helping a music venue pay rent for the next few months, Adler said, a venue owner could be assigned an attorney or a certified public accountant – paid for with SAVES money – to work out a better lease agreement with their landlord. A CPA could help reduce costs and make surviving the pandemic more likely. "If we give money to somebody and help them make it the next four months, but they close in eight months or 12 months, we will have failed," Adler explained. "The goal here is to not kind of spread the peanut butter thin and wantonly. It is to marshal the resources toward true survivability of the industry."

“If we give money to somebody and help them make it the next four months, but they close in eight months or 12 months, we will have failed.” – Mayor Steve Adler

Council also approved a resolution from Council Member Kathie Tovo that establishes a $2.3 million business preservation fund with money ­pulled from the Austin Trans­port­a­tion Department. While the SAVES guidelines are refined, staff can begin doling out this financial relief immediately. At a future meeting, Council will approve guidelines for how businesses should be selected; CMs again stressed that the need will far outweigh available city resources. An amendment from Adler allows the criteria for the live music venue fund selection process to narrow if the city receives more than 50 applications.

In zoning, two East­side cases demonstrated the limits on Council's ability to approve new affordable housing in rapidly gentrifying areas – even with a majority willing to make compromises to do that.

Council was set to take the final votes on a request to rezone 508 Kemp St. in Montopolis from SF-3 to SF-6. The developer, Drenner Group, proposed building 33 townhomes on the lot, 17 of which would be income-restricted housing. But neighboring homeowners filed a valid petition against the request, requiring nine Council votes to grant the rezoning. They couldn't get there; instead, CMs voted to postpone the case to Oct. 29 so Drenner Group could continue working with the neighborhood.

Opposition organized by Community Not Commodity and Communities of Color United claimed the "luxury condos" at the site would be unaffordable for Montopolis residents vulnerable to displacement. The current proposal includes 16 market-rate for-sale townhomes, but also 17 townhomes priced at $140,000 for those at 60% of Austin's median family income ($58,550 a year for four people) and $234,000 for families at 80% MFI ($78,100). The current median home value in the 78741 ZIP code is $335,209. Drenner Group has negotiated a restrictive covenant with Habitat for Humanity to build and market the affordable units. Drenner Group first sought rezoning to build a 100% market rate development, but after finding no support for that on Council, it developed the current proposal.

If a compromise isn't agreed to on Oct. 29, Drenner Group's Leah Bojo told Council, the developer would likely abandon rezoning. Mayor Pro Tem Delia Garza emphasized this: "[The developer] needs no approval from Council to build 10 units that would probably sell for $800,000," she said. "Or they can build affordable units. I would have preferred affordable units."

In a similar case at 3500 Pecan Springs, Council approved upzoning to SF-6 for Thrower Design to build 21 townhomes, with one affordable unit, on a 2.4-acre lot. That was after Council rejected a motion from CM Jimmy Flannigan to allow 25 townhomes, with two income-restricted. Unlike the Kemp case, the developer did not have a restrictive covenant in place to ensure the affordable unit would be built, but speaking for his firm, Ron Thrower guaranteed Council it would get built – even if he had to buy it himself.

Neighbors also had a valid petition filed, and Council was again unable to muster the nine votes needed to overcome it. After Flannigan's motion failed, CM Leslie Pool asked for a vote on 18 townhomes with no affordable units – what the neighbors preferred – and promised to advocate at the Capitol for state-law changes that would increase the city's power to require (rather than just incentivize) affordability in new projects. "We could get two affordable housing units without having to spend any of our affordable housing bonds or any other money," Flannigan said. "These are always hard choices, but this is one of those rubber-meets-the-road moments where we have to ask ourselves if we really mean it when we say we want to build affordable housing." Flannigan was the sole vote against the final compromise proposed by Pool.

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