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New affordable housing language proposed for pending South Shore PUD

Monday, November 9, 2009 by Josh Rosenblatt

A proposal to approve third reading of the South Shore District Planned Unit Development (PUD) ordinance was postponed by City Council Thursday, meaning Grayco Town Lake Investments will have to wait at least another month to find out how the city wants to divide up millions of dollars in affordable housing funds the developer has offered to sweeten the deal.


The Council approved zoning for the PUD on first reading in mid-October, with two members, Mayor Lee Leffingwell and Laura Morrison, voting no. But questions about affordable housing options remained. At Thursday’s Council meeting, Council Member Sheryl Cole proposed postponing the Council’s third reading and directing staff to include alternate language in the ordinance that would address the issue.


Under Cole’s proposal, Grayco would be responsible for $3,148,000 in affordable housing related funds. The package includes a combination of fees and the construction of affordable units on site in the amount of $3,058,000, along with funding to help relocate displaced residents in the amount of $90,000.


“We made a concerted effort to study our options with the affordable housing component of the PUD,” Cole told In Fact Daily, “and what we tried to do is place some funding under three different options.” Each of these options would receive an equal share of the $3,058,000.


The first third would be dedicated to the building of on-site units affordable to a family living on 60 percent of median family income (MFI). The second third would be paid as a fee to the Austin Housing Finance Corporation, to be used to provide affordable housing (with priority on owner-occupied units) in the area defined in the East Riverside/Oltorf Combined Neighborhood Plan.


“We are losing affordable housing units with this development,” Cole said, “so it’s important that they be replaced in the general vicinity.”


The remaining third will be paid as a fee to the Austin Housing Finance Corporation to provide affordable housing throughout the city, wherever it sees fit, with priority placed on providing homes for senior citizens.


The Council voted unanimously to approve Cole’s motion to postpone the ordinance with direction, but not before Council Member Chris Riley added a friendly amendment. Riley said that in addition to Cole’s proposals, he’d like the Council to consider alternate language that would keep the affordable housing funds in the Riverside area.


Under Riley’s proposal, Grayco’s funds would be split two ways rather than three, with half the money going toward the construction of on-site units affordable to a family living on 60 percent MFI and the other half paid as a fee to AHFC to provide affordable housing in the East Riverside/Oltorf Combined Neighborhood Plan area, with priority placed on owner-occupied homes.  


“The ideal solution,” Riley said, “would be to keep funds right there within the neighborhood. There may be extraordinary need at this time that might justify taking some of those funds to be used for purposes outside the neighborhood, but I think we need to have some more conversation about that. So if we have these two alternatives, it will give us more time to engage in the conversation.”


After Mayor Leffingwell playfully mocked Riley for proposing a “friendly amendment to do something completely different,” the Council voted to direct staff to finalize the zoning ordinance with Cole’s and Riley’s new language by Nov. 16 and to postpone third reading until Dec. 17.

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