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Bill would allow East Austin land bank without Travis County participation

Wednesday, April 10, 2013 by Michael Kanin

A bill from state Rep. Eddie Rodriguez, D-Austin, would allow the long and hotly debated creation of a homestead preservation district in East Austin to move forward without funding participation from Travis County. If approved, the measure would circumvent – for the moment – repeated objections to the district, primarily from Pct. 4 County Commissioner Ron Davis.

 

Austin City Council members are set to endorse Rodriguez’ bill on Thursday. Council Member Mike Martinez is the lead sponsor on the Council resolution. He described what Rodriguez’ bill would do at Tuesday’s work session.

 

“Arguably, we’ve lost tons of opportunities since 2005 with people having to move out because of escalating property taxes,” Martinez said. “This would allow the city to move forward without agreement from the county. And while I understand the resistance because we want as many funding partners (as possible) to have the biggest impact, I think at this point we have to get this thing up and running and demonstrate to the county that it can work, that it is a viable tool.”

 

If funded, a homestead preservation district would use tax increment financing – a pool of money derived from the increase in tax revenue that accompanies an increase in property values – to purchase land that could be set aside for affordable housing. Future homeowners would own the structures on the property, with the district holding the land underneath it.

 

That concept, called a land bank, has drawn Davis’ concern. As part of the latest round of county deliberations about the issue, Davis told his colleagues that his concern about a previous Rodriguez attempt to create the district “has come up under the guise of providing property tax relief for longtime tax paying residents of East Austin who are predominantly black. This bill appears to facilitate a land grab by the City of Austin Community Development Corporation, which is the facilitator of gentrification.”

 

Though he did not refer specifically to Davis, Martinez told In Fact Daily that concerns about the district are “unfounded fears.” Davis did not return a call requesting comment.

 

The Texas Legislature created a homestead preservation district that extends south from roughly the Cherrywood neighborhood, east from I-35, west from Springdale Road, and north from the Colorado River. However, lingering concerns from county officials coupled with the fact that current rules demand that Travis contribute some portion of the funds to create a district, have rendered it effectively moot.

 

Rodriguez’ legislation would remove the county from the equation by simply altering district rules to allow the city to fund the district without help from the county because, as Martinez put it, “they have not stepped forward to participate.”

 

The altered version of the homestead district financing plan would include only a portion of the city’s segment of resident tax bills. Though Martinez points out that all taxing entities – including the county – would remain eligible to participate in the program, the initial financial set-up would not include other such entities as any of the local independent school districts.

 

At Tuesday’s work session, the idea that the city would be the only party financially involved prompted remarks from Austin Mayor Lee Leffingwell. “There were extensive discussions about why we wanted county and city participation and I just think that if we decide to go forward with it, that we ought to have those discussions again.”

 

Martinez told In Fact Daily that he understood concerns about the fairness of the set up – particularly those of former City Manager Toby Futrell, whom Martinez says was wary of only funding the district with city dollars. Still, he noted a need to get the district on its feet to prevent further neighborhood erosion, thanks to gentrification.

 

Thursday’s resolution would only extend city support for Rodriguez’ effort to move around county politics. It would not commit anyone to approval of the district.

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