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Thursday, December 8, 2016 by Jo Clifton

Grove affordable housing plan explained

If approved on third reading, the new plan for affordable housing for the Grove at Shoal Creek will not only increase the amount of affordable housing available but will also save Austin Water more than $5.3 million over 20 years. These changes are due in large part to a lawsuit filed by local activist Brian Rodgers related to the Pilot Knob planned unit development.

The new plan will cost the city an estimated $10.2 million, but none of that money will come from the water utility.

The city, along with developer ARG Bull Creek Ltd., had intended to use water and wastewater fee waivers to help finance the affordable housing at the Grove, just as it had tried to do at the Pilot Knob PUD. That approach was planned before Rodgers filed suit against the city over Council's handling of the approval of the Pilot Knob PUD.

In that case, a court struck down the plan because Council's agenda posting for discussion of the matter did not meet Texas Open Meetings Act standards. However, Rodgers also argued in his lawsuit that the city had broken state laws when Council voted to redirect Austin Water fees to fund affordable housing outside the city.

Although the judge did not rule on the arguments on use of water/wastewater funds because Rodgers won the open meetings issue, the city was forced to consider that he might have prevailed on that argument, too. Rodgers also told the Austin Monitor that he would sue the city again if it tried the same strategy at the Grove.

At Tuesday's special called Council meeting, Austin Neighborhood Housing and Community Development Assistant Director Rebecca Giello explained the details of the new agreement between the Bull Creek Road Coalition, developer ARG and the city.

As originally planned, the Grove would have offered 108 affordable units, with 5 percent of the total number of ownership units being affordable and 10 percent of rental units falling in the affordable category. The new plan includes 138 total affordable units, with 72 rental units available to families earning 60 percent of median family income and another 20 units for families earning 80 percent MFI, Giello said.

The new plan also includes a total of 46 units available for ownership. Of those, 36 would be set aside for families earning 80 percent MFI and another 10 units would be available for families earning up to 120 percent MFI. The change in the agreement includes the addition of the 20 rental units and the 10 ownership units.

The developer hired Community Wheelhouse, which provides financing and consulting services for affordable housing, to help find a way to fund affordable housing within the PUD that uses property tax money – not water and wastewater fee waivers – to ensure the project will have the mix of housing the city wants.

Council last June adopted a resolution directing that any increased tax revenue from the Grove property be put into the city's Affordable Housing Trust Fund. So, the city would still be waiving development fees of approximately $3 million and would also use future tax increment funds to help the developer build affordable housing for an estimated total of $10.2 million.

Council Member Sheri Gallo asked Giello whether it would be possible to use some of the 2013 affordable housing bond money to help pay for the affordable housing.

"It would break from precedent to earmark funds outside the standard process" for making decisions about affordable housing, Giello said, but Council could do that.

Council Member Greg Casar wanted to know if it would be possible to use money provided in a future bond election to help pay for the affordable housing. Giello indicated that the agreement with the developer would be written so that Council could decide to use funds from sources other than the Affordable Housing Trust Fund.

Third reading on this project is set for Dec. 15, the final Council meeting of the year.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

City of Austin Neighborhood Housing and Community Development Department: This city department provides housing and community development services for Austinites. To that end, they administer programs, provide grant services, and work with non-profit and agencies to provide housing for eligible residents. The department also provides small business development services.

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