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Onion Creek buyouts complicated by costs

Friday, December 18, 2015 by Vicky Garza

The Austin real estate market is too hot.

The city would like to speed up the Onion Creek home buyouts in order to move residents out of the floodplain as soon as possible, but it faces one major constraint – a lack of available homes in the Austin area. This makes it hard for the city to find comparable properties to which it can relocate people who accept a buyout offer.

As of Dec. 8, there were only nine comparable houses selling for under $220,000 within the Austin Independent School District, said Alex Gale, assistant director of the Office of Real Estate Services, during a presentation to the Public Utilities Committee on Wednesday. A comparable home must be a house that is 1,000 square feet or greater, has three or more bedrooms and two or more bathrooms, and is not located in the 100-year floodplain.

“We need to find an equal to or better neighborhood and location, but also take into consideration the needs of the family,” said Gale. “So, if they have children that are in AISD, we try to keep them within AISD. If they’re an elderly person that has hospitals nearby, or a bus route, we try to find them a bus route and hospitals – or keep them within the same area.”

“But it just seems like an impossible task to do,” said City Council Member Don Zimmerman. “It’s just common sense that if I’m in an area prone to flooding, my property is worthless. For a comparable property, it’s worth less than an area that’s not in a flood zone.”

Gale said that the goal of the original timeline is to have all of the buyout offers out within 12 months and, as of now, he thinks the city will be ahead of schedule. However, acceleration of the timeline – so that all offers are out within six months – would increase the project cost by $6 million to $10 million if all properties participate, said Gale, because the city would have to move residents into comparable homes that are more expensive.

Affordability is also a major consideration with this option. “We don’t want to place them into a situation where they are not going to be successful in owning that home,” said Gale, pointing out that the annual property taxes are significantly higher for a $300,000 home ($6,888) than for a $125,000 home ($2,870).

Another option is to expand the relocation search area, said Gale, which is currently within 10 miles of the project area in Austin.

Despite the constraint of the housing market, the project was 72 percent complete as of Dec. 8, with 243 properties left to acquire, according to a presentation by Mapi Vigil, managing engineer in the city’s Watershed Department.

Vigil also gave an update on the funding status of the various components of the buyout project. For buyouts in the 25-year floodplain area, which received $35.5 million in certificates of obligation authorized by Council in June 2014, $28.2 million has been spent to purchase 123 properties, which leaves a balance of $7.3 million to purchase the 27 remaining properties in that area.

For buyouts in the 100-year floodplain area, which received $60 million in certificates of obligation authorized by Council in September 2014 and a grant of up to $1 million from the Federal Emergency Management Agency, $13.1 million has been spent to purchase 19 properties, which leaves a balance of $47.9 million to purchase the remaining 194 properties in that area.

Additionally, the city has had a partnership with the U.S. Army Corps of Engineers since 1999 that includes ecosystem restoration and construction of recreation components in the Onion Creek area. For that project, $62 million was allocated to buy out the 483 properties in the area. As of Dec. 9, 461 have been acquired and $9.3 million remained available for the remaining 22 buyouts.

The Public Utilities Committee also received a briefing on the 2015 Halloween Flood Recovery efforts from representatives of the Office of Homeland Security and Emergency Management, FEMA and the Federal Small Business Administration.

The area has received disaster declarations at the city and state levels, as well as a Disaster Declaration for Individual Assistance by President Barack Obama, and FEMA has authorized over $4 million in assistance. The Austin Code Department’s damage assessment teams have determined that 716 homes and businesses in Austin and Travis County were damaged and eligible for federal assistance.

“As we’ve been working on our assistance to individuals, one of our great concerns was making sure that the people knew that they could get assistance,” said Scott Swearengin, HSEM assistant director.

To make sure everyone in the Onion Creek area is aware of the assistance available to them, caseworkers from the city’s Health and Human Services Department have been contacting residents who have requested its assistance, and representatives from FEMA have been going door to door with tablets since Dec. 4 to try to get people to register online.

Additionally, said Swearengin, staff is working with AISD to provide information to students to take to their parents before the holiday break. He said the federal disaster recovery centers located at the Dove Springs Recreation Center and Elroy Community Library will take a short break for the holidays, and they will get the schedule out as soon as the dates are finalized.

Photo by Steve made available through a Creative Commons license.

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