Tuesday, July 12, 2016 by Jo Clifton

Mueller homeowners reach agreement with TCAD

The Travis Central Appraisal District has reached an agreement with the owners of three affordable homes in the Mueller development who sued the district claiming their appraisals were too high because they were not allowed sell their homes at market value.

Those homes are generally reserved for families earning 80 percent of the median family income in Austin. Many of those homeowners were worried that they might have to sell their homes because they could not afford to pay the taxes under the increased appraisals.

That’s good news for 188 other owners of affordable housing in the Mueller development because they will all have an opportunity to get their appraisals lowered also, according to Kelly Weiss of the Community Wheelhouse, which oversees Mueller’s mortgages.

In order to reach a settlement, the Mueller Foundation has entered into a memorandum of understanding with TCAD and is rewriting the agreements it has with residents living in Mueller’s affordable housing.

Laura Rodriguez, who purchased her affordable home in December 2013 for about $185,000, was the first to reach a settlement with TCAD. According to court documents, Rodriguez signed a purchase option and right of first refusal with the Mueller Foundation, which would only allow her to recoup the purchase price plus 2 percent per year when she sells the house. For 2015, that amount would have been $188,700.

However, because the Mueller Foundation sold some homes at the market rate instead of at the affordable rate, TCAD raised appraisals for all homes after a certain period of time to the market rate. But the Mueller Foundation has now agreed to keep all of the affordable housing at the affordable rate if the homeowners agree.

Under the agreed judgment worked out by Rodriguez’s attorneys — Mike McKetta of Graves, Dougherty, Hearon and Moody and Lorri Michel of Michel Gray LLP — and the appraisal district’s attorney, Judith Hargrove of Hargrove and Evans, Rodriguez’s home will now be appraised at $188,719.

Hargrove told the Austin Monitor, “The problem from TCAD’s perspective was that the purchase option did not really limit the new sale price of the home. They could sell it for anything, so TCAD was appraising at market value. So the amended purchase option is actually limiting the potential sales price of the property.”

Hargrove said, “We are all very, very glad that this was resolved to the benefit of all parties, including the homeowners themselves — that was always our main regret, that Mueller and TCAD were not able to resolve the big picture, that the homeowners were suffering. But now because we sat down at the table and came up with a solution that did allow the recognition of the limited prices based on their actually being limited, then the homeowners are benefitting and we’re very happy about that. It’s really a good deal for everyone.”

Patti Summerville, executive director of the Mueller Foundation, sent the following statement: “This process has proven the nationally recognized Mueller Affordable Homes Program is working as intended. Through this settlement, I think everyone realizes this original and ambitious affordable housing model created by national experts to sustain affordability beyond the initial home purchase has worked, but it has required some tweaks along the way.

“We’re pleased with the result and we’re moving forward to place more deserving and qualified families into quality homes in the heart of Austin,” she concluded.

Photo by Peter French made available through a Creative Commons license.

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Key Players & Topics In This Article

affordable housing: This general term refers to housing that is affordable to Austinites, with or without subsidy.

Mueller: The Mueller Development is a Planned Unit Development built on the site of Austin's former airport.

Travis Central Appraisal District: The tax appraisal district for Travis County.

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