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Protests possible over planned Homestead Preservation District

Thursday, December 18, 2008 by Kimberly Reeves

Council members expect to see some type of protest at today’s City Council hearing on the Central East Austin Homestead Preservation District, a dispute that some are attributing to a misunderstanding about just how the preservation district would function.


The distress traces back to Travis County, where Commissioner Ron Davis raised concerns about local neighborhood associations not being contacted on the issue. While it was too late to contact Davis directly on Wednesday night, a review of the meeting transcript indicated he might have thought the land bank would require some type of confiscation of property, which is not the case.


Council Member Randi Shade confirmed Council members expected some amount of opposition to the homestead preservation district, which was passed in January 2007. Shade said it was her understanding that some community opposition might be brewing.


“There may be some confusion,” Shade admitted. “I don’t know if there needs to be some education.”


During a presentation at Commissioners Court last month, Margaret Shaw of the Neighborhood Housing and Community Development Department assured Davis the creation of a homestead preservation district would make no difference to someone already living in the district. It also would not affect the taxes of existing homeowners.


The city does want to expand the land bank citywide and use the incremental tax funding from participating entities – possibly a combination of city, county, healthcare district and school district – to purchase additional property, which the land bank would pledge to keep affordable for a longer term than most property purchases.


The level of participation will be determined by each participating entity. However, as both city and county officials admitted, the homestead preservation district will require deferring some amount of taxes in the future, depending on the level of participation. And the property belonging to the land bank would be on the tax rolls at a reduced value.


“That means you and anybody else – all the other taxpayers in Travis County – have to pick up the tab,” said Davis, adding that he did and had supported affordable housing. “Right now we are in a recessionary period. We don’t know what’s going to happen in this economic downturn right now. And I think anything that we do, we’ve got to be very, very cautious, looking at the economic situation across the nation.”


Commissioner Sarah Eckhardt, on the other hand, said she was cautiously optimistic about the land bank and TIF as possible tools to preserve affordable housing. Even Eckhardt, however, had questions that needed further research.


Commissioner Gerald Daugherty, always the most conservative on the Court when it comes to fiscal manners, said it would be wisest to defer any decision on participating in the homestead district, given the current economic climate. He also was willing to defer the decision to a time when his successor, Karen Huber, had a chance to review the proposal. Huber will join the Commissioners Court on Jan. 1.


Harvey Davis, of the county’s affordable housing expert, noted that the use of a preservation district – especially one within the city boundaries – would be a shift for the county. Davis said the county had the documentation on the proposal for less than a month and had formulated questions that needed to be worked through with the city.


The city is aiming for each jurisdiction to take a vote before the end of the year. That gives Travis County two meetings before Jan. 1 to resolve its concerns. Or the commissioners could choose to wait for Huber to join the Court for a decision.


Shaw stressed to commissioners that there would be no issuance of debt associated with the district but the city would be using money from the TIF to finance affordable housing projects within the district.


According to Council Member Lee Leffingwell, the Council had originally planned to wait for the county to decide what level of TIF to enact. However, the county’s failure to act leaves the ball in the city’s court. Shade said Wednesday that the city’s legal advisors had indicated that the Council did not have to arrive at a specific number but could give a range of TIF percentages that would be acceptable.

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