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Scheduling delays affordable housing approval

Tuesday, November 25, 2014 by Elizabeth Pagano

An affordable housing project in North Austin will have to wait a little longer for official city approval. Though the Austin Housing Finance Corporation board of directors seemed poised to approve the project last Thursday, a procedural absurdity held up that approval for another month.

At the most recent City Council meeting, Council Member Laura Morrison had pointed questions about the order of operations involved to approve the project. Specifically, she took issue with the fact that the public hearing was scheduled to take place after an agreement with the Cesar Chavez Foundation had already been approved.

Cesar Chavez Foundation Executive Vice President Alfredo Izmajtovich was on hand to discuss the project, which his company has proposed at 1034 Clayton Lane. He said that in his 24 years of working with affordable housing, he has never seen anyone come to a hearing.

“Typically, what happens is: They have the hearing, no one shows up … and there’s not really much input,” said Izmajtovich. “But if people had questions, or wanted to understand further, we would discuss those items at that time and resolve them if there are any issues.”

“I realize that it’s probably pro forma, and there is probably nothing that would come up, but it’s just too much of a charade in my book to take action,” said Morrison. “I want to make sure that I don’t take action on something before I get public input, and clearly there is not going to be public input.”

The AHFC board voted 6-0 to postpone the item until Dec. 11, with Mayor Lee Leffingwell absent. The project will consist of 56 two-bedroom units, 32 three-bedroom units, 16 four-bedroom units, a children’s playground and a swimming pool. As originally proposed, 78 out of the 104 units are affordable — at or below 60 percent of Area Median Income, or AMI. Of the 78 affordable units, 24 units will be at or below 50 percent of AMI.

Included in the current proposal are 20 market-rate units. Izmajtovich said his organization was “going to try to convert those to affordable housing.”

He said the foundation was committed to making the switch to affordable housing, but the Texas Department of Housing and Community Affairs had the final approval on that change. Izmajtovich said that they also planned to include five permanent supportive housing units that were not in the original plan.

Earlier, Mayor Pro Tem Sheryl Cole asked about the fact that the Cesar Chavez Foundation was not currently operating in Austin. She also worked to establish that supporting the project would be a fiscally prudent move for the city.

Neighborhood Housing and Community Development Director Betsy Spencer explained that it would be the foundation’s first project in the city, though it did have projects in some other Texas cities and currently operate in California, Arizona and New Mexico.

“They own and operate about 4,000 apartment units, and they have done so for about 30 years,” said Spencer. “They have a very solid track record.”

Izmajtovich explained that the foundation would move forward with the project even if the city did not partner with it in order to make it fully tax exempt. He also assured Cole that the city would have no liability if they were to default on their loans, and the city could exit the partnership at any time.

Cole also pointed out that making the project totally tax exempt would add up to $1.6 million in lost tax revenue over 15 years from all the taxing jurisdictions.

Izmajtovich responded that this number did not take into account the fact that the group planned to pay back an estimated $427,280 to the Austin Housing and Finance Corporation.

“On the basis of cash-per-unit, it’s a very, very good transaction for the City of Austin in terms of creating affordable housing,” said Izmajtovich, who added that the project qualified for 50 percent tax abatement without the city’s help.

Ending Community Homelessness Coalition Executive Director Ann Howard also spoke about the project.

When asked whether she was concerned that the project was located in a low-opportunity area, Howard said, “I am concerned that tonight there are families sleeping outside and in cars. It’s not perfect, but we need housing.”

Howard said that although she didn’t know the foundation, it had a good track record, and she needed partners in building permanent supportive housing.

“We need housing,” said Howard. “And they’re offering it to us.”

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