In a proposal they say can help “promote economic growth in a way that is sensitive” to community needs, council members Raul Alvarez and Danny Thomas this week unveiled a plan for what they call a Community Preservation and Revitalization Zone in East Austin, combining tax incentives for desired development with provisions designed to forestall gentrification.
Under the proposal, within the CP&R Zone – bounded by I-35, Manor Road, U.S. 183, and Riverside and Ben White – developers could qualify for property tax rebates for mixed-use projects that met (as yet undetermined) design guidelines and that were compliant with East Austin’s adopted neighborhood plans. Also, employers could likewise receive rebates for providing jobs to residents of the CP&R Zone. For mixed-use projects, the amount of the rebate – from 30% to 85% of total city property tax – would depend on the amount of commercial space in the project, though developers would have to guarantee that 10% of the residential units would be affordable (at 65% of median family income, rather than the 80% threshold used elsewhere in the city, given East Austin’s lower average incomes). For commercial-only projects, the rebate would depend on the number of jobs. As outlined by Alvarez and Thomas, a project that created 30,000 square feet of commercial space, or 100 jobs, would be eligible for the largest rebate.
But some of that largesse would be recaptured by the CP&R Zone plan’s other requirement – that incentive recipients contribute funds equal to 10% of their pre-rebate tax bill to a new Homeowner’s Assistance Fund. That assistance would take the form of utility payment vouchers for residents who’ve lived within the zone for at least 10 years and whose income is 50% or less of Austin’s MFI. Those vouchers are intended to offset the effect of rising property taxes (or at least the city’s portion of that tax bill); the proposal as outlined pegs the minimum cost of this program at around $60,000 a year, which would require five projects to be approved for CP&R participation.
Reaction from Alvarez and Thomas’ colleagues and elsewhere has been intrigued, but tentative. The council is slated this week to give city staff the go-ahead to flesh out the CP&R proposal and bring back the results in early 2005.
This article appears in October 8 • 2004.