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Affordable housing at TODs could be pricey for city

Monday, March 17, 2008 by Austin Monitor

Representatives of several Council offices got a briefing last week on the station-area plans for the areas immediately surrounding the MLK stop and Saltillo Plaza stop on Capital Metro’s commuter rail line. The Council created a new zoning category, TOD (transit-oriented development) to encourage high-density, mixed-use development around those transit stops and several zoning cases relating to the Saltillo Plaza and MLK station area plans are tentatively on this Thursday’s Council agenda.


“We are talking about making changes to neighborhood plans,” said Sonia Lopez with the Neighborhood Planning and Zoning department. “We’re not doing development projects. We’re developing a framework strategy for future development, given that the vast majority of the development in the TODs is in private hands. We don’t know what’s going to be built.” Lopez and consultant Keith Liden with PB Placemaking briefed Council Member Brewster McCracken and some Council staffers last week during the time reserved for the Council’s Land Use and Transportation Subcommittee.


McCracken had concerns about the level of housing affordability within the TODs. “It will be a challenge to meet the affordable housing goals that we have,” Margaret Shaw, the Acting Director of Neighborhood Housing, told the panel. “The density bonuses and height bonuses only get us so far. For every 10 percent of MFI you’re buying down, it’s going to cost us about $25,000 per unit. We know that the density bonuses alone are not going to get us there.”


She cited a consultant’s report recommending that the city use publicly owned land within the TODs and low-income tax credits to help promote affordability. “There will be additional subsidies that will need to be involved,” Shaw said. “This is pretty standard for a lot of the affordability that we see. A typical deal like this is going to have about seven layers of financing to reach that level of affordability.”


McCracken told staffers he would be pushing for detailed strategies up-front to promote housing affordability within the TOD areas. “I personally believe that a lesson we’ve learned from the Mueller neighborhood is that when we required 25 percent (affordable housing), we hustled to figure out how to implement it. I think if we don’t build in a hard and fast requirement of 25 percent, that will not give us the burning platform that requires us to be serious about creating a financing strategy,” he said. “I’m going to only support 25 percent, knowing that it’s going to require financial (involvement). I would rather see us get this right, rather than see a flurry of projects come with 10 percent affordable at 80 percent MFI (median family income). I think in general, ‘do what we did at Mueller’ is a good mantra for this organization…which is have an implementation plan, tax increment financing, and our public values loaded in at the outset.”


McCracken also said he would look for ways to facilitate the development of necessary infrastructure in those areas around the transit stops that will likely see a significant increase in density. In other neighborhoods where policy changes have driven substantial increases, he said, the city had run into problems. “We need to create a tax increment financing district,” he said to help pay for new, larger underground water mains. “We’ve learned a lesson from UNO (the University Neighborhood Overlay), that our current method of doing business is broken. One of the lessons we’ve learned is that some properties are not going to redevelop…and that we have a drop from an 18 inch water line to a 6-inch line…and we had no strategy for that,” he said. “We need to take what they’ve learned and do that on the front end.”


The Planning Commission heard the same report Tuesday evening. Public comment on the MLK and Saltillo Plaza TODs echoed many of the comments heard earlier in regards to development and affordable housing. Commissioners requested more information from staff on several aspects of the program and postponed making a decision on the hearings until March 25.

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