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Planning Commission recommends major PUD east of Austin

Thursday, January 21, 2016 by Jack Craver

The Planning Commission recommended last week that City Council members approve a planned unit development for a massive mixed-use project in an unincorporated area of Travis County, about 10 miles east of the airport – where, if approved, the effort could span both sides of Pearce Lane.

The panel unanimously gave the nod to the recommendation from city staff for the 1,604-acre Sun Chase PUD, which is made up of four municipal utility districts that were created in anticipation of the project in 2012. The consent agreement between the city and the developer, Qualico CR LP, which created the MUDs, required the developer to provide a number of amenities. These include hundreds of acres of public parkland, promises for energy-efficient buildings, donations of two parcels of land to the Del Valle Independent School District and certain measures to keep at least 10 percent of the new housing “affordable.”

“We believe that this proposal can result in superior development along a major thoroughfare in Southeast Travis County,” Wendy Rhoades, of the Planning and Zoning Department, told commissioners.

The conditions placed on the project to provide affordable housing are largely the same as those imposed on the Pilot Knob PUD that Council approved in November. Indeed, under those conditions, 10 percent of the owner-occupied units will be sold to those living at 80 percent of the area’s median income, and 10 percent of the rental units will be reserved for those living at 60 percent of that threshold for at least 40 years.

In addition, the developer will make a financial contribution to the city’s affordable housing program. That money will come from the assessments that residents of the new community will give the MUD board as repayment for the bonds that the board issued to finance infrastructure. Qualico will direct 2 percent of the revenue it receives, up to a maximum of $1.8 million, to the housing trust.

The commission added two of its own “clarifications” to the recommendation after some members of the panel expressed skepticism about the city’s ability to ensure that units intended to be low-cost would in fact remain so.

Commissioner Tom Nuckols, in particular, was puzzled by the developer’s assurance that a certain percentage of units could be sold at a certain price.

“People in Austin have been known to offer more than the asking price for a house and basically get in a bidding war,” he said. “Is there a mechanism to prevent that here?”

Richard Suttle, the agent for Qualico, said the idea was to have houses that would be affordable to people of lower income levels, but he conceded that they hadn’t figured out how to prevent the prices from being driven up by bids.

“Nobody has figured out affordable housing yet,” he said.

But Suttle, of local firm Armbrust & Brown, added that the intent of the contribution to the city housing authority was that the authority would use that money specifically for helping people find affordable housing within the Sun Chase community, not elsewhere. The city could do that three ways, he explained. It could assist with down payments for new homeowners, it could create a “clearinghouse” to identify qualified buyers for the new homes, or it could in fact buy a stake in the lot with the intent of preserving it at affordable prices in the long-term.

“It seems to me the best way to provide long-term affordability is to use that $1.8 million either for the authority or a land trust to buy those lots, and then they stay affordable in perpetuity,” said Nuckols.

However, Commissioner Nuria Zaragoza suggested the commission might be constrained in its ability to demand more affordability measures because of the terms of the MUD agreement. She suggested that the city should have been more aggressive in its demands before the issue reached the commission.

“In my mind, it seems like a stronger stance on affordability could have been taken during the initial negotiations,” Zaragoza said. She proposed that the Planning Commission recommend the PUD but add two clarifications that the $1.8 million be devoted entirely to housing within the PUD and that affordable housing units be interspersed throughout the site, rather than concentrated in one area.

In November, Council dealt with similar questions about affordability in discussions over Pilot Knob. When that developer, also represented by Suttle, proposed waiving development fees as a way to lower housing costs, Council instead voted to require the developer to pay the fees and for those fees to be directed to the housing authority, rather than to the departments that typically collect the money, such as the water utility and the city inspector.

Zaragoza said that she hoped Council could find a different solution for Sun Chase.

“Really, no new resource was extracted or found (with Pilot Knob),” she said. “It was just a displacement of funds, and in my mind, as much as we believe in affordability, that shouldn’t come at the expense of the utility customers.”

Despite the concerns about promoting affordable housing, no members of the commission suggested that the project shouldn’t go forward. Nor did any residents come before the commission to voice opposition to the project.

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